Impact investing: How to Spend Your Money To Create a Better World

Juliette Roy
8 min readOct 30, 2020
impact investing
Rosa Lee Harden: Rosa believes that the entire world stands a better chance if we focus on impact investing. (PHOTO: Courtesy/ ROSA LEE HARDEN)

Fair trade and changing the world starts by looking at how we spend money, from daily purchases to long term pension funds. Today on Be Your Change, we explore impact investing. The term has different meanings for different people, but ideally, we must ensure our investment has a good impact on the world. We get insights on impact investing from Rosa Lee Harden, a leader in the social impact movement and co-founder of Social Capital Markets (SOCAP). SOCAP is a large network of investors and entrepreneurs who want money to flow towards the greater good.

In this interview, we talk to Rosa Lee Harden about the meaning of impact investing, and how we can join this movement even though we don’t have a large amount of money to invest.

How did you come up with SOCAP?

More and more people want to invest their money in alignment with the greater good. About 10 years ago, my husband and I began a social entrepreneur investing firm. It started attracting people who wanted to talk about the space of impact investing. So they decided to do this at a conference — SOCAP. Across 10 years, it has grown from what we had hoped would be 200/300 people to now 3,000 people.

We have to start investing in a way that protects the planet, that protects its people. And I’m really hopeful that this movement is going to have a lot to do with that. The challenge to us is getting the word out to main Street that there is this different way of investing, that is impact investing.

You have mentioned impact investing a lot. How best would you explain it?

Impact investing is when you take your investment portfolio and instead of just thinking about how much money you’re going to make with your investment, you consider more important things. Think about what your money’s doing, and how it is behaving out in the world. You should also consider the values that the investment company holds compared to yours. You may discover that you are investing in an ammunition plant or in a company that makes products with slave laborers or things that you ideally would really object to.

Ideally, you should employ investment strategies that ensure your investment will go towards things that you approve of first. And beyond that, your investment must have an impact in that it will change the world for good. This concept was developed about 10 to 15 years ago but it is rapidly influencing people’s investment decisions. People are understanding that their money can make a difference. That is the whole essence of impact investing.

Could you give a small background on impact investing?

Impact investing started becoming popular in the 1960s, during the Vietnam War. Students demanded that universities do not invest their endowment funds into defense contractors. Some say the idea of socially responsible investing goes back 200 years when John Wesley, the founder of the Methodist movement, told his followers to not profit at their neighbors’ expense. Yet another explanation says the idea goes back even further, to biblical times!

impact investing
The history of impact investing. (SOURCE: Thomson Reuters, “History of socially responsible investing in the U.S.,August 2013)

How are people embracing the concept of impact investing?

Currently, we are in this great space where the people who are true believers and understand impact investing and social enterprise are getting to know that SOCAP exists and attend it in droves. But then it is such an esoteric field. The biggest challenge is getting the word out to the mainstream, about this different way of investing and getting them to come to SOCAP to learn how to do it.

What would you describe to be the biggest setback for impact investing?

Impact investing is not mainstream yet, but it’s moving in that direction. I think it’s because inequalities are skyrocketing. A new report by Oxfam shows the inequality gap has widened so much that the ‘world’s richest 1% gets 82% of the wealth’. People want change. One recent survey shows 79% of millennials want to invest in a way that has both a social and financial impact. Mainstream investment managers are taking note. Merrill Lynch now offers impact investment products and advice. Goldman Sachs recently bought an impact investment firm. We appreciate all this growth, but the challenge remains to have rapid growth while maintaining purity in the philosophies behind impact investing.

inequality gap
Inequality gap. According to Oxfam, the inequality gap has widened so much that the ‘world’s richest 1% gets 82% of the wealth’. (SOURCE: OXFAM/

What is your projected outcome of all your efforts?

We hope that we don’t lose the battle to ‘greenwashing’, where people say they’re doing a good thing just to sell their product when it’s really not that sustainable or that environmentally friendly. And so what we’re hoping to do is to build this momentum with integrity rather than people again just trying to make money off of it. To inspire more people to do impact investing.

People are making money. One study shows 15 billion US dollars were poured into impact investments in 2015. Venture capitalist, Sir Ronald Cohen predicts the “tipping point” for the movement will happen in 2020, when global impact assets are expected to reach $300 billion.

Is the “tipping point” a reality, according to you?

My personal thinking is that if we don’t reach a tipping point pretty soon and turn this around, we’re going to lose the battle, and we’re going to lose this earth. We have to start investing in a way that protects the planet that protects its people. I’m really hopeful that this movement is going to have a lot to do with that and moving people’s awareness, moving the needle, making that tipping point arrive where it’s just unheard of to invest in something that you don’t understand. You would say I want to be careful with how I invest because I care about the world. Impact investing is definitely the way to go.

One way we invest is by putting our money in banks. But over three dozens banks, including Wells Fargo, Bank of America and CitiBank support and finance the Dakota Access pipeline. Climate activists — and the EPA — say the pipeline will increase greenhouse gases, endanger wildlife, and affect local American Indian tribes’ source of water. In 2017, Seattle became the first city to break ties with Wells Fargo in protest.

So what do you think needs to happen right now?

I don’t know what specifics I would name but my role in it is to continue with this conference and other smaller events to continue to educate people. I also intend to get more people aware that you don’t just hand your retirement funds to some relative stranger and say just make me some money. That you can instead take that money and invest it in a credit union that supports your community. Or that you can alternatively work with someone who would give your returns in impact not just in dollars. I want to educate people so that they know that they can practice impact investing.

3 Tips to become a conscious investor and consumer

It Is Not Only About Investment

What advice do you have for anyone who might not consider themselves investors because they can’t afford $50,000 dollars to invest?

impact investing
With impact investing, the focus shouldn’t be on the size of your investment but on placing your money among people who share your values. (PHOTO/COURTESY)

Well, it’s not just about the size of the investment. It could be the $100 that you put in a credit union. You should investigate your bank. Do you appreciate its values? If you don’t, then look for a credit union or a smaller local bank that supports your local community. Figure out what your values are and find a banking institution that supports them. Don’t worry if sometimes you never have any money to invest, instead, you should find solace in knowing that at least you allowed your money to be co-mingled with the money of other like-minded people. Impact investing!

Be Mindful on How You Spend Your Money

More than just what you do with investments what do you do with your money in general matters even more. Maybe you start looking more carefully at food labels about is it organically grown? Is it locally grown? Is it grown in a way that is good for the planet? Or you look at some of your clothing options and make sure that at least a few things that you buy that you know that it came from a factory that didn’t use slave labor in any way. I think the key is to build products that don’t have a negative impact on the environment.

Find something in your life is OK in this area of my life, this is where I’m going to work to do a better job of being a conscious consumer.

As Beyourchange, we appreciate your obvious dedication to making a difference in the world. We see you are in the trench every day working at creating a better world for the future generation — towards impact investing. What are the most exciting trends you are witnessing in your community that give you hope for the future?

I am very hopeful we will not be able to turn the other way and say, “Well you know I just you know I live my life”. You can’t live your life in a society that is so blatantly disrespectful of humanity. And one of the tenets I try to live my life by is to respect the dignity of every human being. And I’m hopeful that will become a mantra in this country that we respect the dignity of every human being.

Educate Yourself

What would your parting words on impact investing be to a potential investor?

Remember, the best thing that we can do as consumers is to educate ourselves about where our money is spent. Know about your bank, know their values. Think twice when you buy a product. Are you perpetuating a bad system? Or are you supporting companies with a social impact mission? And, if you are thinking of investing, ensure you understand what is being done with your money and the impact your investment has on the world. How we spend money is a form of activism and can be a direct route to a more equal society.

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Juliette Roy

Founder Be Your Change Media. We amplify the voices of women social entrepreneurs and changemakers and provide training to start and grow your podcast.