Building an Impact Economy: LifeCity Returns from the White House

White_house-1309354706The American economy of the past few years has been, to say the least, chaotic. Previously accepted practices have proven disastrous, and it’s clear that fundamental changes need to occur in how we do business.

The good news is that there is currently an opportunity for a vast restructuring of the ways in which we as a country view investment opportunities. Whether you are a business seeking profitability, an investor seeking a high return, or a consumer seeking to align values with daily choices, look no further: social entrepreneurship is one of the fastest growing sectors in our economy, and impact investing could reach a 500+ billion dollar market over the next decade.

“We know this sector of the economy is growing-how fast and how much is the question,” says Elizabeth Littlefield, President and CEO of the Overseas Private Investment Corporation (OPIC). “People want to align their values with the places they work.”

On June 22nd, the White House has joined forces with the Aspen Institute to study the benefits and opportunities of what they call an “Impact Economy” in order to take advantage of the evident “relationship between national competitiveness, social impact and environmental benefit.” Entrepreneurs, investors, non-profits, foundations, administrators, and members of the private sector gathered to discuss a national strategy to support businesses whose sole goal is not only to create maximum profits for shareholders, but also positive social change.

But can philanthropy and capitalism really join forces? This was the initial question posed to panelist discussing the “State of Impact Investing” last Wednesday.

Some argue that when making an investment, social impact is irrelevant to economic return. However, the bankers, non-profits, and entrepreneurs on the panel, such as John Buley, Managing Director of Social Finance at JP Morgan, quickly responded with the notion that earning a profit while generating social impact is not only compatible, but could be our best bet in (and for) the future.

According to Adam Lowry, CEO of a socially responsible soap company called Method, “The only reason that social and environmental responsibility comes at a higher cost is because it hasn’t reached a level of scale.”

As social entrepreneurs become more plentiful and grow in demand, such businesses are by nature competitive in a capitalist society in which citizens and members of government are also committed to social and environmental progress. Clean Tech, Community Enterprise, Ethical Brands, and Affordable Housing are four categories that the Aspen Institute uses to define businesses that function as part of an Impact Economy.

LifeCity is eager to work with these and more sectors that are growing to adopt social and environmentally responsible practices. For New Orleans, we provide an infrastructure for investors, consumers, and businesses to identify the companies that are generating the greatest impact for our community and leverage their success. Like the leaders of last week’s convening, we believe that generating social and environmental impact is ultimately the best financial decision a business can make. The Director of the National Economic Council put it simply by saying that sustainability does not suggest so much a triple-bottom line, but a single bottom line that is “more reflective, richer, and long-term”.

As part of its initiative to increase job growth and support private initiative for social and environmental change, the Obama Administration has stated an interest in studying the idea of Impact Economy as part of its broader social agenda that is “focused on investing for impact, particularly how to catalyze capital to businesses that generate both financial and intentional social returns.”

One of the group of philanthropists, entrepreneurs, and investors invited to participate in the ongoing discussion about socially conscious business and investing was Elizabeth Shephard, who recently attended the Impact Economy Convening at the White House on behalf of LifeCity. Elizabeth Shephard is the Chief Sustainability Officer and founder of LifeCity. LifeCity is honored to be a part of the growing movement to buy wisely, to invest with the future in mind, and to work towards a world of social and environmental security.

For more information on social entrepreneurship and impact investing, review these links below:

Rockefeller Foundation Impact Investing Initiative

Global Impact Investment Network

Government resources

Research from JP Morgan