Impact investing refers to investments that are made with the pre-meditated notion that their investments will not only achieve financial returns, but social ones as well. This type of investing deals primarily with Social Enterprise because the investment decisions integrate the component of social responsibility. With this high emphasis on social responsibility, impact investors have lower financial return obligations and expectations in comparison to commercial enterprise investors. Impact Investing can range from the traditional venture and equity investments, to grants and program-related investments.
According to The Huffington Post, Impact investing has 4 primary goals:
1. Make an impact in solving a pressing problem of our time,
2. Generate compelling returns for investors,
3. Generate growth for economies, and
4. Generate prosperity for developed and developing nations