15 May OXFAM REPORT ON IMPACT INVESTMENT: WHO IS THE INDUSTRY SERVING?
Together with Sumerian Partners, a manager of philanthropic capital for foundations, Oxfam recently released the report Impact Investment: Who are we helping? The report questions some of the common assumptions around impact investment, arguing that most articles on the topic focus on the needs and experiences of investors (supply of capital side). The Oxfam paper instead highlights the experiences and needs of downstream enterprises (demand for capital side) that work with or benefit people living in poverty that are not frequently represented in the literature.
According to the paper, the impact investment field is evolving with a one-sided view of what is possible, based on investor needs rather than on-the-ground enterprise realities. The mainstream narrative actively promotes and validates the potential of combining competitive financial returns combined with full social impact. However, as the paper points out, while most of the enterprises Oxfam or Samarian Partners have worked with have great potential to contribute to poverty alleviation, they are unlikely to ever deliver returns of the magnitude expected by the mainstream.
The aim of the paper is to highlight the experiences of enterprises contributing to poverty reduction so that they might be better served by the impact investment field. According to Oxfam, the sector is at risk of being discredited as a result of rising, unrealistic expectations about financial returns.