Real Impact: The New Economics of Social Change

Simon, founder and chair of the nonprofit Transform Finance, opens this fast-paced, provoking book with a crash course in impact investing, “the trillion-dollar trend most people have never heard of.” As she explains, impact investment (the Rockefeller Foundation’s term) means investing for social benefit as well as profit. Simon starkly concludes that the current, well-intentioned “free-market-plus-charity model” hasn’t effected substantive change. According to a study cited here, only 12% of foundational giving goes to social-justice causes; the rest supports education and arts organizations that largely service the already wealthy or at least economically secure. Rather than raising relatively small amounts of money expressly for charity, impact investing seeks to leverage the much larger sums in the global economy by pressuring companies to do better with their money. Simon talks frankly and critically about established philanthropic practices, stressing that wealthy donors must not wholly control the process of dispersing funds. Her bracing, hard-hitting message for big business is accompanied by advice for middle-class investors, who are encouraged to move personal accounts from big banks to community banks and clean up their stock holdings. Clear-eyed, explicit, and tinged with just the right amount of outrage, this is a clarion call that the world of well-meaning social-justice activists needs to hear. [em]Agent: Victoria Skurnick, Levine Greenberg Rostan. (Oct.) [/em]