ABSTRACT
A critical challenge in determining where to invest is identifying specific organizations, projects, and initiatives that align with investors’ investment objectives. Alignment on the social impact mission is the starting point for ensuring that investors’ objectives are in alignment with the expected outcomes of the investment. In addition to alignment on desired social impact, investors should investigate the degree to which the investee can meet investors’ other objectives regarding the role investors expect to play and the resources investors plan to invest. Although many investments promise positive financial returns, the returns may be lower or the investments more risky than similar market investments. Grants and donations are commonly used structures for investments that take the form of monetary gifts to non-profit organizations. Fund managers invest in social enterprises or other social purpose organizations using the collective capital from investors. For significant investments, investors can investigate alignment in greater depth through direct discussions and negotiations and possibly detailed written documentation.
