4 simple tricks to get past the impact investing bulls!?!t
With conference season upon us, impact investors will be gathering around the world in the coming weeks to tell exciting stories about how they’re using investments to solve social problems. And there’s a lot to be excited about. But as interest in impact investing takes off, and the stakes start to get real, there’s also going to be a lot of well, you know what.
I feel partly responsible for unleashing the beast of impact investing hype. So I also feel responsible for aiding you to see through it. Hopefully, these four tricks can help you find the insight amidst the bulls!?t:
- Don’t believe what people say; ask what they’re actually doing: This may seem obvious, but in impact investing world there’s a sense of loyalty to the cause that leaves many public assertions unchecked. This is especially true when asset owners have the mic. Few people at impact investing conferences have an incentive to ask a foundation president, major institutional investor, or billionaire to back up their claims. So when you're listening to one of them talk about how committed they are to impact investing, ask them to be specific about the investments they have actually made.
- Find out what happened, not what got announced: I know a lifelong banker who helped put together an impact investment fund with foundations and other impact-focused organizations. During the fund’s first year I asked him why he was so frustrated? “There was so much focus on getting the announcement right but since then no one is paying attention to getting the funds deployed. I’ve never been given a bonus to make an announcement.” Unfortunately, too many people in impact investing world similarly manage to the announcement. So when you hear someone describe the “$100MM Fund That’s Solving X” ask how much capital actually got deployed? And with what result? The answer will often surprise you.
- Listen to the doers (not the hypers or the haters): Impact investing is a theoretically powerful concept with intellectual appeal to a certain type of person (okay, I’ll admit it, nerds like me). Unfortunately many people now express authoritative opinions derived from theory rather than experience. And their advice will often lead you astray. So listen for perspectives learned from people operating in the world the way it is, not from logical projections of how the world should be. In impact investing there are only three kinds of people: hypers, haters and doers. The hypers will tell you this is easy as pie. The haters will tell you it’s impossible or immoral. The doers will reaffirm that it’s a struggle worth joining.
- Celebrate intellectual curiosity and integrity: Impact investing is hard. Listen for people with the intellectual curiosity to probe the complexities of what we do and the intellectual integrity to admit what they do not know. Find the panelist and speaker who is comfortable saying “I don’t know…but I’m excited to find out through experimentation.” And celebrate them.
Let me know if you think of other similar tricks, but I hope this is a good start. I know from experience that using them can make a conference much more useful and interesting for all of us.
So please try these out. And let us know how it goes.