Doing Good and Making Money Can and Should Go Hand-in-Hand

At an impact investing meeting at the US State Department last week, I was probably the only one in the room who didn't know that only 3 percent of the world's assets/funds were engaged in what's often referred to as "social innovation" or "impact investing." It's apparently known as the "97 vs. 3" dilemma. But whatever you call it, it was news to me and an obvious shortcoming to driving sustainable change, I think.

Why are micro finance funds, NGOs and foundations the only ones playing big in this space? How will we ever get enough of these great ideas and programs to scale if we only approach them as philanthropic endeavors? Let me be clear: I have HUGE respect for the groups that were in the room. We are in fact already partners with many of them! But, despite the good intentions and great work, the truth is that philanthropy -- in the broadest sense -- can rarely make the long-term impact business can. I think of it this way -- as the president of the Kraft Foods Foundation, I have about $100 million in cash and in-kind we can invest each year. But as Kraft Foods INC, my company has literally billions to invest in the things we need to buy. Effectively directed, what is likely to have a greater impact -- millions or billions? I think the answer is obvious. But clearly this point isn't obvious enough or that 97 percent of assets wouldn't be on the sidelines of impact investing.

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