The recent Singapore Family Office meeting on "Impact Investing and Philanthropy" covered various routes that families have in setting up foundations, non-profit work and impact investing, depending on the aim and strategy of the endeavour. Many families choose to run their own foundation for a cause that is very personal and meaningful, while others strategically work on a need-based approach. While the path of foundations, endowments, donations and patronage are quite clear, impact investing proved harder to define.
According to the Global Impact Investing Network (GIIN) "impact investments are investments made into companies, organizations and funds with the intention to generate social and environmental impact alongside a financial return." Wolfgang Hafenmayer, who has worked to set up LGT Venture Philanthropy with the support of the Princely Family of Liechtenstein remarked, "It's only investments (and not donations) and only those that have no negative social and environmental externalities, but positive impact. However, the positive impact can be across all target groups - from services & products for less advantaged or bottom of the pyramid to services & products for wealthy people. Impact investments can be across all asset classes, not only PE/VC investments.
"In general, families should develop a coherent strategy on how they would like to achieve a positive societal impact across all their resources - with their business activities, their assets/investments as well as their philanthropic engagements - based on their families' values and mission. Once there is clarity around the societal impact strategy it's easier to take decisions around how to implement it together with specialists in the field. Based on my experience on working with families on these topics over the last 10 years, I see a clear trend towards more and more professionalization of that area which includes that more and more families appreciate professional advice in this more and more complex space."