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The Impact of Impact Investing: Opportunities and Challenges in Creating Positive Change

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Impact investing is gaining momentum as investors seek to create positive change while generating returns.

description: an image of a diverse group of people working together on a project, with a focus on collaboration and community building.

TGIF, Agents of Impact! Show me the impact. The pushback against impact-washing is spurring investors of all stripes to raise their game. Impact investing is gaining momentum as investors seek to create positive change while generating returns. This type of investing has the potential to address many of the world's most pressing issues, from climate change to social inequality.

Advocates of the opportunity zones (OZ) incentive are looking ahead to the next iteration of the community development resource. OZs provide tax incentives to investors who fund projects in designated low-income areas. The goal is to spur economic development and job creation in these areas. However, there is concern that the program may not benefit the communities it is intended to serve.

Stella Tai, Stewardship Investing Impact Manager at Praxis Mutual Funds interviews Lori Scott, Managing Director of Impact Credit at Enterprise Community Partners. They discuss the importance of investing in affordable housing and community development. Scott emphasizes the need for investors to work closely with community partners to ensure that investments are aligned with local needs.

From farm data that's easier to trace, to more efficient 'smart contracts', to using tokens to raise funds from a range of investors, technology is playing a key role in the growth of impact investing. These innovations are helping to make impact investing more accessible to a wider range of investors.

Jim Sorenson and Terrence Keeley discuss the opportunities and challenges of ESG and impact investing. They highlight the importance of measuring impact and the need for transparency in reporting. They also point out that impact investing is not a one-size-fits-all approach and that investors need to be clear about their goals and priorities.

Impact investing is a strategy for using your money to create or affect positive change by investing in things that will do good in the world. This can be anything from renewable energy projects to affordable housing to clean water initiatives. The goal is to generate both social and financial returns.

Eight socioeconomic pillars can support the growth of Black-owned businesses and increase opportunities for Black communities. These pillars include access to capital, education and training, and policy and advocacy. Impact investing can play a key role in supporting these pillars and promoting economic empowerment for Black communities.

Understanding these six important differences will both facilitate better conversations and help channel funds appropriately. These differences include the distinction between impact investing and philanthropy, the importance of intentionality, and the role of measurement and reporting.

Much like traditional investing, it's important to know your goals when engaging in impact investing. Investors need to be clear about what they hope to achieve and what types of investments align with their values and priorities. This requires careful research and due diligence.

impact investingpositive changeesgsocial inequalityaffordable housingcommunity developmentozstechnologytransparencysocioeconomic pillarsblack-owned businessesintentionalitymeasurementdue diligence

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