My personal take is that if you can find the right impact investment, it would be much more effective than a non-profit because by the nature of their setup a non-profit can never exhibit exponential growth. I can’t find the research but I saw something which showed that non-profit giving has been pretty much exactly x.y% across the board for many years and that pie rarely changes so EA in it’s current form seems to be a lot about allocating that fixed amount of charity money to more effective charities which do the most good.
What appeals to me about impact investing is that if you find the right product/service it should be able to not only grow without any future dollars but also scale exponentially after my initial investment. e.g. if I give $50k to a company which produces a meat alternative that supplants animal products and it takes off then theoretically it could grow into a business generating billions of dollars in revenue and subsequently making a huge dent in the reduction of greenhouse gases (fewer cows needed), reduced animal suffering, and depending on your perspective revolving meat consumption a potential for great individual health in the form of reduced cancer, etc.
This is not necessarily a hypothetical because Beyond Meat and Impossible Burger are both growing massively and seem to be having an actual impact in reducing meat consumption (56% of their consumers are meat eaters who just like their food and are looking to reduce their consumption).
Anyways, that’s just one example but I think the same could be said for other arenas like solar, lumbering with sustainable practices etc.
In terms of accessing these investments, unfortunately the majority require being an accredited investor but I assume there is a way to create a fund or non-profit which invests exclusively in these opportunities which could then be held to a similar standard as EA charities in terms of evaluating their potential impact.
Great post!
This is something I’ve considered quite a bit.
My personal take is that if you can find the right impact investment, it would be much more effective than a non-profit because by the nature of their setup a non-profit can never exhibit exponential growth. I can’t find the research but I saw something which showed that non-profit giving has been pretty much exactly x.y% across the board for many years and that pie rarely changes so EA in it’s current form seems to be a lot about allocating that fixed amount of charity money to more effective charities which do the most good.
What appeals to me about impact investing is that if you find the right product/service it should be able to not only grow without any future dollars but also scale exponentially after my initial investment. e.g. if I give $50k to a company which produces a meat alternative that supplants animal products and it takes off then theoretically it could grow into a business generating billions of dollars in revenue and subsequently making a huge dent in the reduction of greenhouse gases (fewer cows needed), reduced animal suffering, and depending on your perspective revolving meat consumption a potential for great individual health in the form of reduced cancer, etc.
This is not necessarily a hypothetical because Beyond Meat and Impossible Burger are both growing massively and seem to be having an actual impact in reducing meat consumption (56% of their consumers are meat eaters who just like their food and are looking to reduce their consumption).
Anyways, that’s just one example but I think the same could be said for other arenas like solar, lumbering with sustainable practices etc.
In terms of accessing these investments, unfortunately the majority require being an accredited investor but I assume there is a way to create a fund or non-profit which invests exclusively in these opportunities which could then be held to a similar standard as EA charities in terms of evaluating their potential impact.