When most people think about creating impact, they often go straight to finances – how to invest in issues they care about by aligning their portfolios with their values. And that’s powerful. Impact investing has grown significantly in recent years, with more than $1.571 trillion USD in assets under management globally, reflecting increased investor interest in aligning portfolios with values.
But financial capital is far from the only tool for creating impact.
At Genus, we believe that impact is most meaningful – and sustainable – when it’s built on a broader foundation. That’s why we often reference the five capitals of family wealth, a concept introduced by James E. Hughes.
Traditionally used to define multi-generational wealth, these five forms of capital can also guide individuals and families in identifying the full range of resources they can use to make a difference. “We see impact as something much broader than just investment strategy,” says Grant Conroy, Portfolio Manager and Partner at Genus. “Impact is also about how you show up, who you connect with, where you spend your energy and whether your values are driving your decisions.”
It’s a powerful way to rethink how you contribute, using not just your dollars but also your time, talent, relationships, values and knowledge to drive the outcomes you care about most.
How the 5 capitals can help you make an impact
Each type of capital represents a resource you can draw on to make a meaningful difference. Some are more obvious – like money and time – while others, such as values or connections, are often overlooked. But all five are powerful in their own right. Here’s how each can be leveraged for impact that is meaningful to you and your family.
Intellectual capital: This refers to the knowledge and wisdom you’ve gained throughout your life – or collectively as a family. This could include academic successes, career growth, artistic achievements, their understanding of their finances, impact, and their ability to teach and learn from others. How you can use it for impact: Join a board, mentor others, offer your expertise to causes you believe in, or use your skills to evaluate impact opportunities more effectively.
Social capital: This includes your relationships and reputation – within your family, your community and beyond. It’s your ability to build trust, and make collective decisions with others. How you can use it for impact: Facilitate connections among like-minded people you know, advocate within your network, host a table at a fundraising event, or use your influence to rally support for a cause.
Spiritual Capital: It may not feel natural to refer to your purpose, values and beliefs as capital, but putting your worldview into action can help drive the impact you seek. Spiritual capital also involves the ability to share and sustain an intention or dream that transcends individual interests or a way of thinking that realises the bigger picture is more than just yourself. It can be thought of as a shared sense of purpose or meaning and is not necessarily faith based, but it could be. How you can use it for impact: Align your investments, actions and pursuits with your deeper sense of purpose. Find your people.
Human Capital: Your time, energy and talents are your human capital – a valuable resource we often spend creating a living and a legacy for ourselves and our families. But human capital also includes your physical and emotional well-being, as well as each family member’s ability to establish a positive sense of identity, and pursue their own happiness. How you can use it for impact: Many people work in roles that enable them to put their values into action daily. But if that’s not possible, you can also volunteer, mentor or offer capacity to support impact efforts on the ground. The opportunities are only limited by your imagination.
Financial Capital: Finally, monetary assets are what most people think of first when they consider their capital. And of course they’re an important piece of the puzzle. How you can use it for impact: We work with many of our clients to develop l'investissement à impact strategies that match their goals, but you can also engage in philanthropy and other forms of mission-aligned capital deployment such as starting your own business.
Leverage your 5 capitals through these 4 avenues of impact
Once you have an understanding of the five types of capital you have at your disposal, you can then explore the four primary avenues of creating impact with them.
- Investir – This includes impact investing, ESG investing, and any other investing along the spectre de l'investissement d'impact where financial returns are balanced against making an impact.
- Philanthropy – Donating, volunteering and board work are all examples of philanthropy. Usually, philanthropy is undertaken to make an impact, but there’s no expectation of financial return.
- Advocacy – Connecting people to make change, raising awareness of causes, lobbying through letters, conversations and public pressure, and working with authorities for change all comprise avenues of advocacy work. If you’ve ever signed a petition or written a letter to an elected representative, you’ve engaged in advocacy.
- Living your life – You can create impact in your daily actions – from recycling to biking to work, to supporting local businesses – all of which are impactful in their own way.
Measure your impact
How do you determine whether your capitals and avenues have generated the results you want? “We produce quarterly impact reports for our impact investing clients using our proprietary Net Impact ScoreTM,” Conroy says, “which gives us a quantifiable measure of the portfolio’s overall impact, weighing negative and positive investments and showing where we can improve our investment practices. And we actively advocate for more standardized measurement within the sector.”
You can align with specific Objectifs de développement durable des Nations unies, as we do, and follow their progress. You can also check the KPIs and mission statements of charitable organizations you’re involved with.
But most importantly, check in with yourself. Are you happy with the way you’re living your life? Are you finding fulfillment, purpose and meaning in the ways you’re working to make an impact? "A great example of this happened when I first moved to Vancouver,” Conroy says. “I drove for a car service that took cancer patients to and from their appointments. I think I got more out of that than I gave. After driving, it left me with a feeling of contribution – like I was actually making a difference in people’s lives.”
If what you’re doing doesn’t give you that feeling, then maybe it’s not the capital or avenue for you to be striving for impact.
Interested in making more of an impact with your financial capital? Get started today with our des services d'investissement fondés sur des valeurs.
This communication is for informational purposes only and does not constitute investment advice or an offer to buy or sell any financial product. Impact investing involves risk, and outcomes—financial or social—are not guaranteed. Past results are not indicative of future performance. Investors should consult a licensed advisor to determine whether any investment approach is appropriate for their circumstances.
Références :
Xiao, D. H. M. U. H. P. K. (n.d.). Sizing the impact Investing Market 2024. The GIIN. https://thegiin.org/publication/research/sizing-the-impact-investing-market-2024/
