Montecito Journal: “Impact Investing - Finding Passion and Purpose”

An Article By Peter L. Brill, M.D. “Impact Investing—Finding Passion and Purpose,” Montecito Journal vol. 22/issue 17 (28 April-5 May2016): 44.

I “retired” early. I began an exploration of this gift of time I had been given to myself. How could I use it wisely? I wanted to study how people did well in this new, largely unexplored stage of life, which I later called the Third Age. 

What I discovered was that people in this stage of life, beyond wanting good health, desire, passion, purpose, and joy or happiness. When I spoke to groups, I asked them if they have passion and purpose in their lives. Ten to 20 percent has passion and 20 to 30 percent had purpose. Studies suggest that having these, along with happiness, extends life some seven to eight years. Interestingly, the same yearnings and percentages seem to apply, possibly even more strongly, to people in their 20s, 30s, 40s, and 50s, even if they were working. 

To skip ahead in the story, it was not an easy task to help people find passion and purpose. For those who weren’t working, it largely led into volunteerism and philanthropy. They could have bucket lists that created a sense of adventure or making up for what they had missed, and there is certainly nothing wrong with that. But real purpose comes from a deeper connection to something larger than self-gratification and, to a certain extent, so does passion. I served on boards and committees of nonprofits, gave money, joined spiritual organizations and, with my background in organizations, even served on the executive committee of two organizations dedicated to helping nonprofits. 

My search for passion and purpose was frustrated by how little my talents were used, how little difference I could make, and how these organizations were often crippled by how much time and effort was spent just trying to raise enough money to survive. I left the world of nonprofits discouraged. And it didn't look much better in the for-profit world. Studies showed that between 80 to 90 percent of working people feel alienated from their work. No wonder young people also felt the yearning. I had all but given up. 

Conscious Capitalism

Then, through a circuitous route, I discovered the field of impact investing. But before I tell you more about why that opened the door for me to passion and purpose, I want to talk about fundamental exchange. Way back at the dawn of agriculture, one farmer had too many eggs and another had too many potatoes. They exchanged some eggs for some potatoes, and both were better off. As long as the “spirit” of that exchange is free and fair, the world is a better place for both. If someone grows oranges and corners the market, and no one can get vitamin C without an unfair exchange, it still is commerce; but, it no longer carries the same “spirit.” Goodness is goodness and exploitation is exploitation. They don't feel the same—and greed and exploitation certainly don't provide purpose through meaning, and the passion they bring also carries a kind of darkness. 

Impact investing consciously and deliberately wires, in a real way, the desire to do social good with the fair exchange. The old saying is: give a person a fish and he or she eats tonight, teach them to fish and they will eat every night. Well, help transform the fishing industry and lots of people will eat, and the ecology go the world will improve. That is impact investing. 

Microloans and Small Banks. 

Elevar Equity is a good example. We all know about microloans. Money is lent in small amounts to poor people who can start little businesses and mostly repay the money. The problem is that the small amounts to the very poorest of the poor don't commonly work to alter the path of their lives. It raises them somewhat, but soon many settle back to where they were before. At least that is what the studies seem to show. 

Elevar went one level up from the poorest of the poor. They created a fund to start banks that make loans to people to pay for tuition and to buy homes, streamlined the process so the rates could be cut significantly on the loans, and created successful banks all over India and Mexico. The repayment rate was very high and the banks made money, proving to other banks that this was a viable, new market. 

To date, some 300 million tons have been made, and the market has been transformed. The money finds its way down from the poor to the poorest because they hire them and buy their products. No government or pure philanthropic program, to my knowledge, has been this successful. All the while, investors in the fund make 18 to 20% IRR. 

Be a part of it

I have spent a year and a half studying and investing in impact investment. I am excited, because I see an open door to doing good, finding purpose, working with amazing people, all while creating passion in my life. You can play almost any role you want when doing impact investing: from board member to mentor, doing the due diligence to training CEOs. I finally was participating in a field that was truly creating significant change. 

Source: Montecito Journal