It’s not just about money.
For many of us, December means reconciling our year-end charitable donations. This year, instead of just writing checks to non-profits, consider putting some of your investment money into a “social business” or social impact fund, a fund that holds shares in businesses that deliver financial returns and social good. Here’s the thinking – while you may make slightly lower returns, if meaningful social change is achieved, you can both feel good and consider the foregone gains a form of charitable giving. (After all, foregone gains are 100% tax deductible; and there’s no Schedule A limitation.)
It’s probably no surprise that as dean of one of the world’s leading business schools, I am a believer in business. In my mind, markets, and the businesses that comprise them, form the most potent and powerful social institution of our era. They create jobs that lift hundreds of thousands out of poverty each year and launch innovations like the Internet, smart phone and social media — creating unprecedented levels of market access and opportunity.
But this year, after encountering some very sobering life situations, I have come to appreciate with greater clarity the need for each of us to be more mindful in 1) how we invest our money and 2) how we invest in helping those less fortunate. Why? Because organizations funded through “giving” are typically not as sustainable or scalable as businesses focused on making a profit. Conversely, organizations designed to make money are not typically as socially-minded as NGOs. So, we need a third way.
To continue reading view the full article at Fortune.com