Effecting change at the pace and scale the world needs today requires looking beyond traditional approaches to discover new solutions that can improve the lives of many. Impact investing is one such solution.
Impact investing seeks to generate both social change and a return on capital. It ends the old dichotomy where business was seen solely as a way to make a profit, while social progress was better achieved only through philanthropy or public policy. At Omidyar Network, we define philanthropy more broadly. We believe all individuals and institutions can contribute to the well-being of society, whether they operate as a for-profit business or a nonprofit organization. Leaving the markets out of our efforts to tackle society’s most intractable problems ignores a powerful force for identifying viable solutions that can scale to help millions.
Omidyar Network employs a flexible capital model that includes impact investments alongside traditional grants. Based on our experience, impact investments are most valuable at the earliest stages of innovation. It’s a time when outcomes are the least certain and entrepreneurs need the most help. By infusing a start up with financial and human capital, we give the entrepreneur the time and resources they need to test the market viability and social impact of their model. We have a particular focus on supporting entrepreneurs who have the potential to impact entire industry sectors, demonstrating the opportunity for others to follow.
For impact investing to reach its true potential, we must also create the conditions for these ventures to take root. From industry associations to information exchanges, our investees are working to build the necessary infrastructure for a sector to thrive. We also work with key decision makers to advocate for policy changes that encourage healthy market competition, establish appropriate regulations, and encourage an environment where entrepreneurship and innovation can thrive.
By sharing our knowledge and expertise with other investors, we are contributing to a more robust impact investing field. We are cultivating a network of thought-leaders who are breaking ground in establishing best practices and developing rigorous, common standards for measuring financial and social returns. These efforts are advancing investors’ understanding of and confidence in impact investing as a powerful means to create positive change for millions of people worldwide.