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June 12, 2018 at 03:30 PM
(Photo: Thinkstock)
Fidelity Charitable reported Tuesday that its donor-advised fund account holders had increased the assets invested for impact to $856 million at the end of the first quarter, a 110% year-over-year increase.
The firm also announced that it has added more impact investing options for DAF account holders.
Impact investors are part of the surging trend of purposefully making investments that help achieve certain social and environmental benefits while generating financial returns.
In a new study of affluent, charitably minded investors, Fidelity found that 77% of millennial and 72% of Gen X donors had made some type of impact investment, compared with only 30% of baby boomers and older donors who had done so.
The study said this generation gap implied a huge influx of investors who will prioritize a mission-based approach.
The report was based on a survey conducted earlier this year by the independent research firm W5 of 475 consumers with investable assets of at least $100,000 who claimed charitable giving on their most recent tax returns or donated at least $10,000 to charity.
Investors in the study said they were most interested in investing in public companies that had good environmental or social practices, with 58% indicating they would invest directly and 56% through exchange-traded funds or mutual funds.
Forty-eight percent showed a strong interest in investing in small businesses and startups that focus on social or environmental benefits, 45% in similarly focused venture capital or private funds and 42% in making loans to charitable organizations.
The study also found a robust correlation between a donor’s attitude toward charitable giving and the likelihood that they would make an impact investment. Seventy-nine percent of respondents who rated charitable giving as very important to them also said they engaged in impact investing.
Financial advisors have an important role to play with clients interested in impact investing. Forty-three percent of study participants with a financial advisor reported having had a conversation with that advisor about impact investing, most of the time initiated by the advisor.
