Here’s what you need to know about impact investing, where returns are not the only reward

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GYRO PHOTOGRAPHY | amana images | Getty ImagesGrowing rapidly within the socially responsible investing landscape is the world of so-called impact investing, which deploys your money more directly toward solving societal problems.Largely executed through direct investing platforms, this approach addresses specific problems, such as alleviating poverty in certain communities or reducing pollution.These investments are designed to generate specific, positive and measurable environmental, social and/or good governance outcomes, oftentimes with market-rate financial returns, said Michael Kramer, managing partner of Natural Investments in Kona, Hawaii. Furthermore, outcomes can have a local or a societal focus.”It’s very solution focused, very proactive — often investing in innovations, and supporting social entrepreneurs and socially focused start-ups,” he said.Channels — accredited investorsThere are a growing number of channels for impact investing; however, due to risk, many investment opportunities are available only to accredited investors.Kramer listed several major categories, including:Direct equity: investing in socially focused companies through platforms such as SoCap and Social Venture Circle, which serve as meeting places and learning communities for impact focused investors and entrepreneurs.Indirect private debt and equity funds: for example, funds investing in B-Corporations or in clean tech companies with a water orientation or a focus on …

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