Federal Reserve Bank of San Francisco

Community Development

"Impact Investing": Theory, Meet Practice


December 2011

Community Development Investment Review

The loud buzz of excitement about Impact Investing is cause for concern, but not only because the enthusiasm is ahead of the practice. The practice of so-called “impact investing” lacks clarity of purpose, definition, and results. The often-referenced J.P. Morgan research report, Impact Investments: An Emerging Asset Class, suggests that the potential market for “impact investing” is “vast.” I disagree.

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