Select Page

Are we hardwired to make impact investing impossible? That is the question posed by Ben Metz on the Pioneers Post. In my response to what motivates us to invest for positive impact, we must consider the following: what does impact mean to each of us, what is the purpose of money and monetary rewards, and how we make decisions.

Impact is Personal

I believe impact is fair and equitable access to resources for all. By resources, I include food, clean water, shelter, education, information, energy, transportation – anything that is a resource that enables people to do the things they need to do to have a thriving, fulfilling life. More specifically, the things that had the most significant impact in my life were access to education (specifically deep literacy in financial matters), guidance from people who identified and supported potential, not just performance, and being in careers where building relationships was a daily necessity. It is no coincidence that the social venture I have created is focused on investing in earlier stage entrepreneurs with potential, building a community of investors and increasing investment literacy, and building relationships between investors and entrepreneurs. I support and serve women investors because I believe growing the community of women investors will have the most positive impact and knock-on effect on the world.

Ask a handful of people what they believe “impact” is and get a handful of different answers. Impact is personal. It depends upon personal experiences. What someone experienced in their life will influence what they believe is impact. Just take a look at how organizations and businesses are often formed. Many are solutions to problems or challenges faced by the founders themselves. Founders create impact based on their personal experience of what would have greatest impact.

In his post, Ben writes that “introducing the promise of monetary reward can actually reduce the motivation to do good – and throwing more money at the problem doesn’t yield proportionate returns.”

The issue is not “doing good and pursuing monetary reward, where one competes against the other”. It is most definitely not about one as motivation for the other. They are distinct, but complementary goals and desires. Each has its own motivation and each yields its own, complementary outcome.

The promise of monetary reward triggers an analytical part of the brain, potentially motivating a person to maximize monetary reward. However, to increase the motivation to do good, we must consider the key influencers of decisions to do good, such as feelings of fulfilment, contentment, joy, and love. For each person, these key influencers to do good are going to be different and personal.

Ben notes a study in 2000, where researchers offered subjects the opportunity to earn money for a charity at varying levels of financial reward. The study shows that monetary rewards alone do not motivate good acts. Feelings of creating fairness, emotional drivers, physiological conditions, and mindset all could have influenced the decisions to generate more money for the charity or not. How motivated each subject was to generate more money for the charity would have been influenced by their personal experiences.

The Purpose of Money and Monetary Rewards

The connection between the study’s subjects earning money for themselves and impact investing is that in order for doing good or doing purposeful work to be ongoing, it must be economically viable. To be economically viable, we must also earn money. More accurately, we must continually produce, generate, recycle, and reuse resources in order to sustain ourselves – money happens to be the measure and currency of those resources.

It gets even more complicated and interesting. Money and monetary rewards are not themselves motivators. Instead, I believe it is the purpose of money that motivates people. Dougald Hine gave a great presentation on the purpose of money, in which he describes five main purposes:

  • Subsistence – a means to stay alive or sustain one’s self
  • Security – a means to manage your future, to make the world less unpredictable
  • Luxury – if something is a luxury, then you’re not dependent upon it
  • Status – games by which people establish, hold onto, and change status
  • Accumulation – the idea that more is in and of itself better

Relating the above to investing, the purpose of money or more specifically the purpose of a financial return is:

  • to create an income to sustain one’s self or others
  • to grow financial reserves in order to manage the future or manage change or be re-invested in other ventures and projects
  • for luxury, if investing is not one’s main source of income
  • for status as a successful investor
  • simply as a way of keeping score, if you treat investing as a game

Integrated Decision-Making

Impact investing is a complex decision-making experience. We seek multiple outcomes from an impact investment – economic viability and positive impact in the unknown and uncertain future. To achieve these multiple outcomes, we require multiple inputs into the decision-making experience or process.

We all make decisions using analysis, emotion, intuition, and body. Reflect upon the biggest decisions you have made in your life – choosing a college, university or course to further your education, choosing a career path, or choosing in what city in the world to live. All of these decisions are similar to those faced in impact investing – they each come with different monetary implications and each may have impact. There is a high likelihood that you conducted some analysis and reflected upon the emotions you felt given your choices. Your physiological state and a dose of intuition likely would have affected your decision. I suspect monetary reward alone would not have been a sufficient motivator where impact is important to you.


These ideas, concepts, and approaches – that impact is personal, the purpose of money and investing, and integrated investment decision-making – will be discussed further in the book I am writing on investing in an integrated way. Chapter excerpts will be posted on this website throughout early 2013.