measuring social impact: the nuts and bolts of making a difference
In late October, U.S. Labor Secretary Thomas Perez issued a ruling that now makes it easier for those who manage pension funds and 401k plans to include socially responsible investments. According to an article in ThinkAdvisor, the new guidelines counteract language issued in 2008 by the Bush administration that had warned fund managers away from such investments.
“This is a landmark ruling,” said Surya Kolluri, managing director for policy and market planning in Bank of America Merrill Lynch’s global wealth and retirement solutions business. Speaking at the recent Wharton Social Impact Conference, he predicted the new policy will catch on over time as managers become more comfortable devoting institutional dollars to social impact initiatives.
Secretary Perez’s announcement is an example of society’s increasing move toward investing for social impact in an effort to solve global challenges. Meanwhile, impact investing itself is still a fledgling field. How can individuals and companies weigh different investments and predict which will be successful? How is success measured? And is there still a role for traditional philanthropy?