How Popular Is Impact Investing?
If you are into the sector and follow the news on the impact space, impact investing has definitely risen in popularity in the past few years, with new funds being raised, investments made, and also some scaling up and exits took place. With all the buzz surrounding impact investment, it’s easy to get trapped into thinking that the investing approach has or close to become mainstream. However, we don’t really know yet whether we have been successful in attracting the attention of the general public, or have we only managed to make the impact investing’s echo chamber louder.
I was curious about this, so I decided to use a few (non-scientific) internet tools to do reality check and find out how big the sector currently is. I am using five platforms/tools for this purpose: Google Search, Google Trend, Alexa Rank, Twitter, and Quora. Some of the tools, i.e., Google Search, Twitter, and Quora, give snapshots of the sector, while Google Trend and Alexa Rank provide historical data. To understand the overall context, I am also making comparisons between “impact investing” and a mainstream investing term “venture capital” as well as some other related terms such as “microfinance”, “sustainable development goals”, “social entrepreneurship”, and “venture philanthropy”. For the purpose of comparing traffic to websites and Twitter followerships, I am comparing well-known impact media organizations including ImpactAlpha and NextBillion, Global Impact Investing Network, GrameenBank, as well as impact investors like Acumen and Omidyar Network. See note¹ on the rationale of these choices.
Google Search gives a very simple snapshot of how much content on the public Internet contains the world “impact investing”. Please note that it does not mean that there are 2,970,000 million unique articles about impact investing, as many of these content are duplicates, so this absolute number does not mean much.
Things get slightly more interesting when we compare it with other terminologies:
“microfinance” — 59,700,000 results
“venture capital” — 49,000,000 results
“sustainable development goals” — 23,100,000 results
“social entrepreneurship” — 6,420,000 results
“impact investing” 2,970,000 — results
“venture philanthropy” 360,000 — results
I did not expect that microfinance topped the list, especially when compared with venture capital. SDG is a relatively new term, so its medium rank is understandable. Most surprising to me is that impact investing content is only 5% of microfinance’s, despite my (probably biased) view that microfinance is just one sector that potentially attracts capital from impact investing.
“Google Trend” has been tracking what people around the people search using Google engine since 2004. The tool does not reveal the actual number of searches, but merely showing the trend over time. It’s also important to look at the graphs not as direct indicators of cumulative popularity, but more of people’s curiosity instead.
First, we are finding out the search for the term “impact investing” itself. From the graph depicted in Image 1, it is clear that it is getting more popular, especially in the last few years.
Because the graph is showing only an index (normalized to 0–100) without showing actual number of searches, I am comparing it with the search for a mainstream investment terminology “Venture Capital”, as depicted in the graph in Image 2. Impact investing now looks almost like a flat line compared to venture capital, with a little bit of surge towards the end of 2019.
In Images 3 to 6, we are comparing it with “Sustainable Development Goals”, “Venture Philanthropy”, “Social Entrepreneurship”, and “Microfinance” respectively.
SDG has been a big hit since its introduction in 2015, and it’s adopted by nonprofits and governmental organizations as well, explaining its rapidly increasing popularity.
Venture philanthropy has declined in its popularity, despite continuous activities being conducted by organizations like Gates Foundation or Omidyar Network.
Social entrepreneurship as a term preceded impact investing, and it is popularity is steadily increasing, although not as rapid as impact investing.
Microfinance emerged into public conscience around 2006 when Dr. Yunus was awarded the Nobel Peace Prize, and it still attracts a lot of public curiosity even today.
Alexa Rank is a measure of website popularity, trackable for the past three years. It is not a perfect measure, as they only keep track of certain browsers’ usage, but it is nevertheless the best tool for this purpose.
Here I compare websites of different media and institutions that are focusing on impact investing. It looks like none of these popular impact investing websites have been able to crack top 100k of all websites, with only ImpactAlpha making steady gains over the period. There is still a lot of work to be done on this aspect, with all these websites are practically flatlining in the past 3 years.
Most impact investing organizations maintain presence in Twitter, although only few of them are seriously putting serious effort on this social media channel. As of end 2019, @Acumen seems to be the only one so far that is obviously trying to do something on Twitter with 16.4K tweets since 2009.
@Acumen — 441k
@NextBillion — 102k
@OmidyarNetwork — 64.7k
@theGIIN — 35.7k
@ImpactAlpha — 11.6k
@GrameenBank — 6476 (almost dormant account, only one tweet since joining)
Twitter might be declining in popularity, but nevertheless is still going to be an important platform in the decade to come.
Quora is a great Q&A platform, where anyone can post any questions and provide answers to them. Despite the non-curated nature of Quora, I found that the questions being asked under the “Impact Investing” topic to be quite thoughtful and actually need real effort in answering. It is a pity that very few impact investors are active in the platform and provide insightful answers to them.
The following is the number of followers to each topic in Quora:
- Impact Investing — 4.5k
- Social Business — 26.2k
- Social Enterprise Startups — 38.1k
- Social Entrepreneurship — 370.9k (note: this number looks especially large, but the questions being asked are mostly about entrepreneurship in general, not necessarily on impact/social entrepreneurship)
To put things into perspective, the topic of “Venture Capital” has 1.3m followers.
Our Collective Next Steps
Although it is nevertheless clear that the impact investing sector is enjoying a surge of popularity (or perhaps just a surge of curiosity) among the general public, it is going to be a long way for it to catch up with established sectors like the (tech) venture capital sector. While impact is not a “sexy” sector per se, it deserves more attention from the impact ecosystem players to put in some marketing effort by writing good content and answering questions for the public in an insightful way, so that those who want to learn more about the sector do not get the wrong idea about impact investing.
There are two kind of “wrong ideas” that are possible in a beginner’s mind: Type (I) — that impact investing is just a fad with no real impact, i.e., it is not possible to balance financial returns and impact expectations, and Type (II) — that impact investing has no flaws, easy to implement, and can solve all kind of social and environmental problems, which is also not an accurate representation as the sector also has its many limitations. Only when the general public fully appreciate and support impact investing that the sector can truly flourish.
 The methodology is entirely non-scientific and meant only to identify general trends. Choice of terms and organizations to be used for comparisons are entirely personal, based on my knowledge of the sector. Acumen Fund is an impact investment nonprofit that is very active in sharing and publishing their work, while Grameen Bank remains the leading microfinance institution and has spawned off multiple social businesses in Bangladesh. GIIN acts as the authoritative voice of the industry with their detailed sector reports, and Omidyar Network is a leading venture philanthropy organization. ImpactAlpha and NextBillion are impact investing’s trade publications. All data taken on Dec 31, 2019