Impact investing — also referred to as “socially responsible investing,” “sustainable investing,” or “investing in social good”— is about investing money to support social change while potentially generating financial return. Ultimately, impact investing is a way to align your investments with the positive changes you want to see in the world.
The historically separate fields of traditional investing and philanthropic giving have become increasingly intertwined, evolving into a new investment choice — impact investing. Research shows that the demand for impact investing has grown exponentially over the last decade. Typically, investors who choose this heartfelt approach are driven more by the emotional and moral aspects of contributing to the greater social good than by a quantifiable, monetary return.
Why does impact investing matter?
Simply put, impact investing connects your money to your values. It is a way to advance social change in an innovative and effective way — within a suite of seemingly endless options for supporting the causes we most care about.
Think of impact investing like a social good toolbox — full of many different tools for various uses and purposes. All you need is someone to show you how to most effectively use these tools, so you can amplify the impact of your investment choices.
Tides is committed to impact investing centered around our core values — equality and human rights, a sustainable environment, healthy individuals and communities, and quality education — which are underscored in our 2020 Investment Policy.
For more than 40 years, Tides has empowered smart financial risk-taking in pursuit of progressive change and meaningful social impact. As stewards of charitable capital, we recognize that our responsibility includes the traditional finance goals of maximizing return, minimizing risk, and diversifying portfolios, while also driving measurable social returns that support our vision for a world of shared prosperity and social justice.
Over the years, Tides has grown into a central player in the investing-for-impact sector, demonstrated by both recent and historical milestones. Our organizational history speaks to our leadership using values-aligned donor advised funds as a tool for change. Since the 1980s — long before the term “impact investment” originated — we’ve partnered with the pioneering socially responsible investment funds of Walden Asset Management and Calvert.
More recently, we’ve produced the resource Choose Your Own Impact Adventure Guide. In addition, we’ve participated in industry member groups, such as TONIIC, and spoken as subject experts at the NEXUS Global Summit, the Nonprofit Roundtable, the University of Berkeley Masters Development Program on a CFA Society of San Francisco and Wells Fargo panel, and more.
After decades of creating innovative ways to invest in social impact, a common theme has emerged: customization and personalization. Not every impact investing toolbox is the same, and the tools within each depend on a wide variety of factors that are different for everyone, such as area of interest, success indicators, and risk tolerance, among others. We pride ourselves on our ability to tailor creative solutions for our clients, bridge gaps, and inspire our network of partners and clients to increase the amount of social change we can effect together.
For example, some investors prefer portfolios that blend capital from various sources, such as grantmaking, investments and donor advised funds, while others prefer to have a portfolio focused on a single issue that’s important to them or to invest large amounts in individual initiatives doing work they admire. Some donors may have fossil fuel-free portfolios, while others may prefer portfolios focused on gender equity, education, sustainable agriculture, or environmental preservation. It all depends on what matters to you.
What does successful impact investing look like?
Ultimately, success means something different to every one of us — there is no one size fits all when it comes to measuring impact. Whether it’s the number of incarcerated individuals who acquire a general education diploma (GED) or how many acres of land are returned to Native American tribes, our expert advisors will work with you one-on-one to determine the key indicators of your impact before finalizing any investment decisions.
With our core values at the heart of every partnership, the following stories showcase what impact investing partnerships at Tides can look like.
Education-focused partnership with Twilio.org and Edovo
Twilio.org, the social impact arm of Twilio, has a mission to fuel the communications that give hope, power, and freedom to people around the world. Tides worked with Twilio.org to develop a giving strategy that empowers it to easily provide grants to nonprofits while also investing in for-profit social enterprises. One such social enterprise is Edovo, a business that brings wireless tablets into prisons around the country to make education and communication possible for anyone incarcerated. Thanks to this creative partnership rooted in shared values, Twilio.org is using its assets to cultivate social good while Edovo expands its impact. To date, Twilio.org continues to invest in other education-focused enterprises, including Kinvolved and Cell-Ed.
Jennifer’s Farm-To-Table, Sustainability-Focused Donor Advised Fund
Jennifer Kline is a long-time client of Tides who developed a custom donor advised fund that specifically supports her passion for sustainable and ethical farm-to-table initiatives. Today, her fund has invested millions of dollars in organizations, including EcoTrust, One Acre Fund, Iroquois Valley Farms, CNote, and more, which foster opportunities for farmers and protect the environment.
Unlocking Access to Free Knowledge in Partnership with Wikimedia
Wikimedia strives to bring about a world in which every single human being can freely share in the sum of all knowledge. Tides houses Wikimedia Foundation’s Endowment in a donor advised fund structure to enable future support of Wikimedia’s various projects, including Wikipedia. Tides has supported the Wikimedia Endowment in its investment strategy, asset allocation analysis, and the development and execution of its Investment Policy. Tides also assists in processing Wikimedia’s donations throughout the year.
Environment-focused partnership with Years of Living Dangerously
The Years Project tells unseen stories of the impacts of climate change on underserved populations through an award-winning environmental documentary series called Years of Living Dangerously. Tides has supported the project through a variety of impact investments since its 2014 inception. With significant philanthropic investment, Years of Living Dangerously is better positioned to build awareness about the grave threat of climate change.
Is impact investing right for you?
When you’re considering how to most effectively support the causes you care about, the options and details can be overwhelming. To understand if impact investing is right for you, consider the following questions:
- Do you want to use your money to have an impact on the issues you are passionate about?
- Do you find comfort knowing that your money is going to values-aligned and expertly vetted organizations and social enterprises?
- Do you want to avoid the limitations of one traditional avenue of investing?
- Do you prefer to rely on someone else to responsibly manage the details of your investments?
Where will you go next?
Tides is committed to supporting your impact investing journey. We’re here to help you evaluate key factors — such as risk tolerance, investment goals, and social causes — that will shape how you invest in social change and what success looks like to you. More than anything, we remain committed to evolving with the ever-growing field of impact investing and creating promising new opportunities for mission-driven investors who want to build a world of shared prosperity and social justice with us.
→ If this sounds like a step you’re ready to take, we invite you to fill out our Partner With Us form.
→ Eager to understand more about aligning your investments with the causes you’re most passionate about? Read Investing for a Sustainable Climate, a Tides article on how we have mobilized impact investing dollars focused on environmental protection and sustainability.
→ Want to see more stories of success from people like you? Sign up for our newsletter to be the first to hear of how our partners are having an impact and opportunities for you to do the same.
Tides has been such an excellent partner in truly pushing the boundaries of what's possible in creating social impact through philanthropy. When we were looking for a partner to work with as a donor advised fund, I knew that we wanted to provide grants to nonprofits as well as investments in for-profit social enterprises. And at the time, many of my colleagues in other companies said, no that's too difficult. But when I talked to Tides, not only had they already been doing for-profit social enterprise investments, but they also were making it really easy and seamless to do that. So ever since we've been working with Tides as our donor advised fund, it has been easy and efficient to provide grants to nonprofits as well as investments in for-profit social enterprises such as Edovo.Erin Reilly Vice President of Social Impact, Twilio