Use Impact Investing to Create a Lasting Legacy

Tab 1

November 14, 2016

Our experts discuss how impact investing can complement charitable giving and may magnify the legacy of your family or foundation.

With philanthropy planning for the 2016 and 2017 tax years on the minds of many, now may be the perfect time to consider impact investments. These types of investments in companies, organizations and funds reach beyond a sole focus on financial returns and aim to generate a social and environmental effect as well.

Jonathan Firestein, Managing Director of Private Capital and Impact Investing for Ascent Private Capital Management, and Brooks Rarden, Managing Director of Investments for The Private Client Reserve, discuss how impact investing creates opportunities for both philanthropic giving and generating returns.

Why impact investing? 

Firestein: Traditionally, social impact has been achieved through philanthropy: the giving of money and time to nonprofits, foundations and social service organizations. More recently, forward-thinking private wealth owners and foundations have also sought to complement their philanthropic activities by investing for impact.

Tab 2

November 14, 2016

The holistic practice of impact investing may be new to many, but many of the investment strategies that are generally considered impactful have been around for decades. Impact investors embrace acting today, rather than waiting for a passing of generations, to establish the pool of capital targeted for impact. As an impact investor, you can exert influence while you’re still alive and, with earnings from your investments, potentially increase the future impact you can make.

Rarden: The holidays are a time when families gather together and people think about philanthropy. That makes this a great time to decide, as a family, what kind of legacy and social impact you want to make on causes that are important to you.


What kinds of impact investments might you consider? 


Rarden: There are many avenues where you can make an impact, from simply investing in companies that conduct business in a particular way, to advanced impact funds that are dedicated to investing in a specific area of focus. Impact investors can target specific social and environmental sectors in the pursuit of financial returns, positive impact and measurable results.


Firestein: Impact investments can be made in all corners of the world: in frontier and emerging markets, developed economies and local neighborhoods. Opportunities to invest for impact are present in social and environmental sectors and across all asset classes — allowing for traditional portfolio construction utilizing asset allocation and diversification to potentially reduce risk.

Tab 3

November 14, 2016

Social impact investment categories include health and wellness, education, microfinance, affordable housing and small business development. Environmental impact investment options include natural resource conservation, sustainable agriculture, water and sanitation, clean energy production and environmentally conscious real estate.


How would you go about selecting impact investments as part of a financial and philanthropic strategy? 

Firestein: Impact investors pursue targeted social and environmental investments to complement a living legacy. Beyond the positive impact sought by the investment capital, the process can be rewarding when family members come together to discuss shared family values and opportunities to pursue investing in their passions. Impact investing planning and decision-making can also be a fruitful learning environment for younger next-generation beneficiaries of wealth. Consider asking: In what condition will we leave the world for our children? How do we want to define our legacy?

Rarden: Families can zero in on the areas they want to impact by creating a family mission statement and selecting investments that align with that mission. Once a goal has been established, it’s important to determine that both the impact and the investments are measurable. This allows the family to measure the results against the mission statement goal.

What kinds of returns
do impact investments generate?

Firestein: Returns on an impact investment come in two forms: financial and impact. Calculating financial returns achieved by an impact investment is no different than the returns from a traditional investment. Impact returns are unique to the investment, such as the number of school children who are given opportunities, the number of healthcare patients served, the acres of forests preserved for sustainable timber operations or the megawatts of alternative energy produced.

Tab 4

November 14, 2016

What should individuals consider if they are interested in impact investing? 


FIRESTEIN: You should clearly define the objectives of your impact investing effort — no matter if you are pursuing desired impact or a targeted total financial return for your portfolio. You should also consider investment merits and impact merits separately to determine a balance of appropriate investments for your portfolio.



Crafting a Legacy That Will Last



Help society or the environment through investments.







Explore options across all asset classes in frontier and emerging markets, developed economies and local neighborhoods.

Invest in a company that does business a certain way, or target specific social and environmental sectors.


Act now to see impact in your lifetime — and to benefit future generations.