Who Are Social Impact Investors And Why Should Businesses Care?

The amount of social impact investors who reach out to businesses is increasing. Social impact investing revolves around the idea of giving back to the world. Many companies participate in charity events and offer philanthropic aid do benefit their communities. They use the top community service ideas to give back. While these actions do benefit society, social impact investing takes it a step further in many industries. This form of investing results in directly improving social, economic and/or environmental efforts. There are numerous reasons for business owners like yourself to consider getting involved with this relatively new form of investing. Read on to learn who are social impact investors and why businesses should care.

Social Impact Investors’ Intentions

In order to answer the frequently asked question of “Who are social impact investors?”, you need to focus on their intentions. Just like with a business, intent plays a major role in creating an identity. Social impact investors focus on positively impacting society. At the same time, they want to yield a good return. While every investor hones in on different objectives, they all share the common goal of bettering the world they live in. Fortunately for you, social impact investors need businesses and organizations to reach their goals.

How Investors Measure Impact

Another key point to understanding who social impact investors are is how they measure their impact. When they invest in a business with the hope of making a difference in a positive way, they want to check in on how their capital is being used. In this case, they expect to see it being used for philanthropic purposes. Because every social impact investor puts their capital into a different type of business, their means of measuring the success of their efforts vary. For example, an investor who put their capital into a real estate agency would analyze neighborhoods’ health and access to employment in order to measure their success. Keep these measurement tools in mind when learning who are social impact investors.

Constant Financial Aid

Now that you have an idea of what social impact investors do, you need to recognize how they offer constant financial aid to businesses. Since one of your larger goals as a business owner is to avoid running out of capital, this is a crucial point to consider. Social impact investors who truly care about the well-being of their communities continue to invest in businesses and organizations that are using their capital to give back. They offer them funding to keep their businesses up and running. In turn, the businesses continue to pay it forward. More so, companies avoid dealing with business bankruptcy. For this reason, business owners should care about social impact investing.

Marketing Opportunities

You should also care about social impact investors because they can supply you with new, highly effective marketing opportunities. This is especially true for companies targeting millennials. If you are unfamiliar with marketing to millenials, learn what is a millenial first. Millennials, in particular, prefer to purchase products and services from companies that help the environment and society as a whole. They want their capital to go toward a greater cause so that they, too, can feel that they are paying it forward. With this being said, if you advertise your philanthropic efforts, you can increase your customer base and give back to society even more at the same time.

How To Convince Investors

Finally, business owners who want to reap the benefits of social impact investing need to learn how to convince investors to choose their businesses. Keep in mind that social impact investors prefer working with companies with a definable impact thesis. To convince them, your thesis needs to connect your brand to a larger problem in the world. When developing your thesis, think in a mission-driven mindset. Consider populations in need and consumer issues that need to be solved. Then, you can come up with ways to initiate positive change for consumers through your products. In turn, you will convince social impact investors that you are worth offering capital to.

Social impact investing positively effects businesses in industries across the board. Social impact investors’ intentions include impacting society and yielding good returns simultaneously. They measure their investments’ impacts using different tools and analytics that change according to the type of business. Business owners who receive capital from these investors typically continue to receive it, setting them up for financial stability. Such business owners also gain new marketing opportunities, especially for targeting millennials. Lastly, you can convince investors to provide you with capital by writing a quality social impact thesis. Businesses who care about who are social impact investors and what they do increase their profits.