Philanthropy and social investing are two approaches that aim to create positive societal change, but they operate in distinct ways.
Philanthropy traditionally involves donating to charitable causes with the primary intention of social good, without expecting a financial return. It's about giving resources, usually in the form of grants, to non-profit organizations or causes to address various social issues, from poverty alleviation to education and healthcare.
Social investing, also known as impact investing, goes beyond traditional charity. It involves making purposeful investments that not only generate financial returns but also contribute to societal well-being³. This paradigm shift allows investors to align their financial goals with their values, supporting companies, organizations, and funds that aim to solve social or environmental problems while also delivering a financial performance.
In essence, while philanthropy focuses on the direct support of social causes, social investing seeks to leverage the power of capital markets to drive systemic change and create sustainable solutions to global challenges¹². Both play crucial roles in fostering a more equitable and sustainable world.
