September 15, 2022

How NPT UK Can Help Your Clients Leverage Impact Investing

Author John Canady, Chief Executive Officer

Impact investing is an important option for philanthropists—and a burgeoning market. The Global Impact Investing Network estimated there were $715 billion in impact investment assets in 2020.

Impact investments are designed to generate positive social and environmental impact in addition to financial returns. It is an appealing strategy for donors to maximise their charitable impact and for those who want to help improve society, with opportunities for making impact investments across a variety of sectors from energy to education, healthcare to food production.

Here are some reasons why your clients may want to consider dedicating resources to impact investing as part of their philanthropic strategy.

Help achieve philanthropic goals

By investing their assets for impact, your clients can align their investment goals with their philanthropic goals, which can provide more resources to addressing social and environmental challenges. Linking your clients DAFs’ investment assets with the core purpose of their grantmaking has proven to increase donor satisfaction, and enjoyment, with the impact they are creating significantly.

Create greater financial impact

Impact investing has grown into a sophisticated investment and risk management approach, giving investors the opportunity to incorporate environmental, social and governance (ESG) considerations into their investment portfolios without having to give up potential returns. The additional level of impact created in tackling core social and environmental issues through investments helps to deepen the impact of clients’ entire philanthropic portfolios.

Engaging the next generation

Millennials and Gen Zs tend to support companies that align with their values, putting people ahead of profits. Impact investing has become an enticing option for these generations as it provides a platform to direct their investments into social and environmental impact. As your clients plan their family’s wealth transfer, allocating philanthropic capital for sustainable and impact investments might help the next generation get involved in purpose driven investment right away.

How NPT UK can help

NPT UK offers multiple impact investing options for clients. If a DAF balance is over £500k, a donor can recommend their DAF assets be managed by an impact investment manager of their choice, in line with NPT UK’s investment policy guidelines. For DAFs holding under £500k, donors may choose from NPT UK’s approved investment options, which include a number of impact and sustainable investment options.

To learn more about how your client’s donor-advised fund assets can be used for impact investing, please contact us.

About the Author

John Canady, CEO of National Philanthropic Trust UK, has 25 years of experience working across the business, nonprofit and government sectors. He specializes in creating and managing philanthropic funds for donors and family offices around the world who wish to base their philanthropy from the UK.