Learn more about Omidyar Network’s framework for investing for both social impact and financial returns.

The impact investing industry has long debated whether there is a necessary trade-off between financial returns and social impact. While many impact investors are eager to answer definitively one way or the other, Omidyar Network’s 12 years of experience and $1BN in investments have led us to a different answer:

In this whitepaper, Omidyar present a framework for investing across the returns continuum—a continuum that extends from fully commercial investments at one end to philanthropic grants at the other. This framework reflects their belief that there is a broad range of viable investment profiles, some of which involve a trade-off between social return and financial impact, and many of which do not.

They argue that investors should consider accepting below-market returns only in certain limited circumstances. At Omidyar Network, they accept such returns only— with very rare exceptions—when they are intentionally pursuing market-level impact. And they have developed a clear framework for assessing that kind of impact. Adopting such an approach should not provide an excuse for investing in weak business models. But in certain circumstances, they believe, impact-oriented investors should adjust their return expectations in order to support companies that have the potential to catalyze new markets that will drive social change.

Download the report here.