Impact Investing

Wolfgang Spiess-Knafl () and Barbara Scheck ()
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Wolfgang Spiess-Knafl: European Center for Social Finance
Barbara Scheck: Munich Business School

Chapter Chapter 3 in Impact Investing, 2023, pp 51-71 from Palgrave Macmillan

Abstract: Abstract This chapter covers impact investing. It will introduce the topic and discuss the rationales of investors to allocate part of their resources to impact investing. Those rationales are different for the different groups of investors who are contributing to the capital in the impact investing market. There are different theoretical approaches to understand investment decisions. One key consideration is the interplay between financial and social return requirements. Financial returns are easily quantifiable in the form of EBITDA, net profits, or revenues. Social goals are another topic and social impact assessment will be covered in the sixth chapter. Both goals are interdependent and trade-offs can occur when capital providers with different return expectations are involved in the financing of a social enterprise. Some aspects of the social sector are also applicable in this field. Public sector funding usually comes with restrictions and has an impact on the financing structure of the organization. Similar restrictions can be observed for the different income streams. Crowding-out occurs when donors and public authorities support an organization.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:pal:psifcp:978-3-031-32183-2_3

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DOI: 10.1007/978-3-031-32183-2_3

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