Participatory Impact Investing is an approach to financial investment that emphasizes the social or environmental impact of projects invested in, as well as the meaningful participation and voice of the communities involved.
Problems and Purpose
Impact investing is investment in projects and organizations working for positive social or environmental change, whilst also generating profit. It has grown considerably in the past ten years, and alongside this growth a number of challenges have become apparent, such as funds making false claims about the benefits of their investments, and those involved in invested projects about no say about the investment process itself .
Participatory Impact Investing offers a potential solution to these challenges, through involving communities from invested projects in the investment process, thus shifting power from the hands of investors and funds by themselves.
Origins and Development
Participant Recruitment and Selection
How it Works: Process, Interaction, and Decision-Making
Participatory Impact Investing is an overall approach rather than a specific one. This means it may utilize a number of tools and techniques depending on context. For example, the Buen Vivir Fund used a collaborative design process to design the structure and processes of how the fund runs. Ten grass-roots organizations worked with investors to design a structure for the fund and those grass-roots organizations are also central to the fund's governance and day-to-day running.
Peter O'Flynn and Grace Higdon suggest that impact investing should draw methodological inspiration from the global development field, where participatory methods have been central for a number of years. They suggest approaches such as Participatory Action Research and Participatory Learning and Action can be applied to investment processes to foster deep reflection and learning over more superficial forms of engagement .
Influence, Outcomes, and Effects
Analysis and Lessons Learned
 O'Flynn, P. and Higdon, G.L. (2019). Is participatory impact investing the antidote to “impact washing”? [blog]. Institute of Development Studies. 21 September 2019. Available at: https://www.ids.ac.uk/opinions/is-participatory-impact-investing-the-antidote-to-impact-washing/ (Accessed 27 July 2020)