Impact Investing—What About Impact Planning?


We live in exciting times.

On the rise is a generation of young people fueled by making a difference in the world. A generation motivated to live purposeful lives, to make a difference, to do their part—however large or small. This generation has evolved beyond the Wall Street mentality that “greed is good,” and adopted the truth that “good is good,” and “doing good does not mean you cannot make money in the process.”

In fact, this generation knows that the strongest foundation in business—one built on honesty, integrity and adding value—is ultimately the best business plan because it results in the most sustainable, long-lasting business.

This generation is not “in to get out,” like swindlers of the past. They are in to be in and do good for as long as the journey lasts. After all, life is fleeting, the only thing that cannot be taken away from us are our experiences, and, let’s face it, money doesn’t buy happiness.

This is a post-9/11, post-2008 generation where nothing tangible is guaranteed and can be swept away in the blink of an eye. So, it is the intangibles—our experiences, our values, etc.—that matter most. Profits, therefore, should derive from doing good in the world. Industries, and the companies that support them, should not be built on human suffering. The result of all of this is the phenomenon known as impact investing, or socially responsible investing, the basic concept of which is investing in a way that has a positive social and/or environmental impact while still earning financial returns. It’s here, and it’s working.

Impact investing, however, still only speaks to your financial assets.

As this generation knows very well, we are all much more than our money or fiscal worth. We are the sum total of our life experiences. Those life experiences, while personal to each of us individually, equally have an impact on those around us, our friends and families, the general public and society at large, as well as our culture. There is no way of measuring this impact until we die, since it is ever evolving. Suffice to say, however, when we die each of us leaves a lasting imprint, or impact, on the world in some way. Each of us leaves a legacy.

The question is not whether you will leave an impact or legacy behind, the question is what will your impact and legacy be?

Impact Legacy

Enter your impact (or legacy) plan. Just as this young generation is being intentional and purposeful with their financial assets through impact investing, so too must they be purposeful and intentional with their non-financial assets through impact (or legacy) planning.

At Spotlight, we break down your non-financial assets into two broad categories: (i) human assets and (ii) creative/impact assets.

We all possess “human assets”—i.e., knowledge, skills, talents, passions, relationships, core values, spiritual beliefs, etc.

Creative (or Impact) assets are our public works and/or accomplishments that have an impact on a particular audience—be it a public audience or your family.

For a long time now, trusts and estates lawyers have worked to preserve your financial assets when you die—it’s called an “estate plan.” By contrast, a legacy plan preserves the totality of your life experiences and impact when you are gone. More importantly, however, a legacy plan is a proactive, forward-looking plan that helps define the impact you are looking to achieve during your lifetime and comes up with a strategy integrating the investment and growth of both your financial and non-financial assets in a way that helps you achieve your impact goals.

Instead of talking about “death and taxes,” we are talking about “life and purpose.”

Traditional investing and estate planning speak strictly to your financial assets and financial returns. Even “goals-oriented investing,” a term being increasingly used in the wealth management and financial planning industries, primarily focuses on financial goals around retirement, lifestyle, etc. Impact planning, on the other hand, speaks to who you are, what you stand for (i.e., your truth), and what you do in totality—we believe these to be your most valuable assets—and your desired impact on your family and your world.

Impact investing is a great first step towards making sure your financial assets are having a positive social and/or environmental impact aligned with your own values, but it is only a piece of the puzzle. Ultimately, impact investing needs to stem from, and be part of, a more comprehensive impact (or legacy) plan.

Questions or Comments? Interested in learning more?