I’m so glad to see a post from people working in the industry in question—thank you for taking the time, making the post and contributing to the discussion, I strong upvoted.
Impact investing comes up a lot in donor advisory, so have a few points to add:
1 I generally still advise donors not to use their philanthropic, impact maximising, allocation for impact investing. I still do not have a very thorough way of explaining how I came to this conclusion and no existing materials I know of could be sent to a HNW.
2 most large donors only give a small portion of their assets, >90% of their capital is generally invested and impact investing (II) can come from that allocation. This changes the discussion considerably. Eg from ‘II vs donating’ to ‘where are you spending your time’. We could also discuss lost returns but it seems like most II does not have sufficiently lower returns on average to worry about it from an impact perspective. Giving better will make significantly more of a difference than 5-20% more or less profit from their investments. Not always going to be true but generally seems the right view.
3 donor funds are a very different question to an individuals career, the leverage available in some impact investing careers is so high that it requires a separate investigation that I haven’t seen. I would guess that an evaluator could move 10-100x more capital for the same effort in II than in donation evaluation.
4 stepping back, effectiveness minded II might be an important consideration in designing the models orgs within top cause areas consider. If you were comparing two models for your org and one assumed limited philanthropic capital and so maximised its impact per dollar but the other assumed huge swathes of II funding and so took on a much lower impact per dollar, and tried to design a model that would be copied, build IP, be acquired by industry giant etc..
5 bio / ai safety have many opportunities for doing far more damage than good, at face value it does not seem a good fit for larger, IP-driven investment models. However, a big worry is control and trust. If top researchers and strategists in the area felt there was capacity for responsible cautious impact investing the area, that might speed up how quickly market driven approaches emerged.
I’m so glad to see a post from people working in the industry in question—thank you for taking the time, making the post and contributing to the discussion, I strong upvoted.
Impact investing comes up a lot in donor advisory, so have a few points to add:
1 I generally still advise donors not to use their philanthropic, impact maximising, allocation for impact investing. I still do not have a very thorough way of explaining how I came to this conclusion and no existing materials I know of could be sent to a HNW.
2 most large donors only give a small portion of their assets, >90% of their capital is generally invested and impact investing (II) can come from that allocation. This changes the discussion considerably. Eg from ‘II vs donating’ to ‘where are you spending your time’. We could also discuss lost returns but it seems like most II does not have sufficiently lower returns on average to worry about it from an impact perspective. Giving better will make significantly more of a difference than 5-20% more or less profit from their investments. Not always going to be true but generally seems the right view.
3 donor funds are a very different question to an individuals career, the leverage available in some impact investing careers is so high that it requires a separate investigation that I haven’t seen. I would guess that an evaluator could move 10-100x more capital for the same effort in II than in donation evaluation.
4 stepping back, effectiveness minded II might be an important consideration in designing the models orgs within top cause areas consider. If you were comparing two models for your org and one assumed limited philanthropic capital and so maximised its impact per dollar but the other assumed huge swathes of II funding and so took on a much lower impact per dollar, and tried to design a model that would be copied, build IP, be acquired by industry giant etc..
5 bio / ai safety have many opportunities for doing far more damage than good, at face value it does not seem a good fit for larger, IP-driven investment models. However, a big worry is control and trust. If top researchers and strategists in the area felt there was capacity for responsible cautious impact investing the area, that might speed up how quickly market driven approaches emerged.