Wealthy Get New Ways To Invest In Social Ventures
Wealthy individuals will soon have more options for investing in social ventures.
A new nonprofit venture ImpactAssets plans to launch a wealth management portal that will offer resources including a global index of the top wealth managers who invest for social impact plus financial products that individuals and wealth managers can use to make investments in social ventures.
The ImpactAssets portal will include investment vehicles like donor-advised funds, those administered by third parties to make charitable donations, plus other vehicles where individuals can make equity investments from their general investment portfolios.
“The new venture I’m launching with the Calvert Foundation is a venture to build a platform of services for the wealth management community to really be able to connect investors to this latent interest and passion that many of these entrepreneurs have,” said Ron Cordes, head of the Cordes Foundation, an ImpactAssets board member and a long-time wealth manager.
Many investing options are only available to those who have donor-advised funds.
“We’re taking what we’re doing for donor-advised funds and making it available to people on a broader scale outside of donor-advised funds,” said Elise Lufton, program manager at ImpactAssets, which will manage the new wealth management portal.
Cordes says new mechanisms to allow individuals to directly invest could unlock $2 billion for social venture investment — or just less than 2 percent of the $120 billion that Hope Consulting estimated was the “latent demand” for social investments from wealthy individuals and institutions.
“It’s almost similar to the mutual fund world 30 years ago,” Cordes said. “People knew about a number of these funds, but there was no one place to go to actually evaluate them. That’s what we’re staring to create: the connections and infrastructure (to link wealthy individuals and institutions to social ventures) and then we can begin to catalyze capital.”
The ImpactAssets portal and its related financial products will be launched in the first quarter of 2011.