The following blog post was written by Liz Haffa, a Frontier Market Scout.
Recently having finished the Frontier Market Scouts Professional Training at the Monterey Institute of International Studies, I have learned about the new and promising field of impact investing. Impact investing is a unique blend of both business and philanthropy worlds, by investing in “social enterprises” that are driven by both a profit and a “triple bottom line,” or having a positive social impact. Although impact investing is a new concept, social enterprises have been around for decades as companies created organically by good people who want to make a difference. Many of the best social enterprises are created by talented entrepreneurs who have never even heard of the term “social enterprise,” and would not self-identify as social entrepreneurs.
As a Masters of Public Administration Student, it has been interesting to see how many aspects of the corporate world can be applied to the development sector to create sustainable and responsible change. Simply bringing in aid in-kind, can leave developing countries dependant, and destroy local markets. For example, bringing in free food can detract from the local food sellers and farmers, hurting the local economy because no one will pay for food when they can receive it for free. The best social enterprises are created to fill a need or a gap in the market and by selling goods and hiring locals can actually empower communities. The fact that these enterprises do so in a way that also generates a profit has the added benefit that they will have the capacity to continue provided their goods or services, as they are not dependant on grant funding and donations as many non-profits tend to be and are able to offer livable salaries to employees. Overall, I found the last two weeks to be a very enriching experience and I hope to spread awareness about impact investing and the possibilities it can have for sustainable development!