A version of this post was written by Dennis Price and originally appeared on ImpactAlpha.

Knock, knock, knock. That’s the sound of impact investing at the door of mainstream financial markets after a banner year in which the impact investing marketplace grew to $60 billion, new firms entered the arena and important policies changes removed perceived barriers to impact investment practices.

Look for impact investing to accelerate in 2016. Here’s a roundup of marketplace predictions from investors and observers who have gazed into their crystal balls to start the new year.

1. The rise of frontier capital. Forbes’ Devin Thorpe says Paula Goldman, the Omidyar Network’s global lead for impact investing, sees a new $3 trillion market that investors seeking impact and financial returns will begin to fully leverage in 2016.

“2016 will be the year where entrepreneurs and investors leverage the ubiquity of smartphone technology and demographic shifts to fuel the next wave of innovation and impact in emerging markets. We’ve identified a $3 trillion opportunity just above the base of the pyramid to achieve both financial returns and social impact — what we’ve called “frontier capital,” which is early stage risk capital in emerging markets directed towards businesses that serve those earning between $2 and $8 daily.

These people have greater purchasing power and a steadier income than the very bottom of the pyramid, but still benefit greatly from products and services that improve their lives. Companies like Lenddo and MicroEnsure are leveraging technology to create socially impactful businesses that directly serve this population, enabling them to scale more effectively and serve the bottom of the pyramid without subsidy.”

In 2016, entrepreneurs will further leverage smartphone technology to fuel innovation in emerging markets. Tweet This Quote

2. Much, much bigger and increasingly connected to the mainstream. Citing the rapid growth of the UK impact investing market, estimated at 30-40 percent per year, Rod Schwartz, CEO of ClearlySo asks: Can it continue to grow? His answer: yes!

“Take for example the “Internet Sector” in the late 1990’s, which was viewed by many as a niche sector disconnected from traditional industries. This technology has become utterly integral to every corner of every sector, fast-tracked human development and changed the way we communicate, live, problem solve and conduct business. Impact is similarly becoming an integral consideration to every facet of our personal and professional lives.”

Impact is becoming an integral consideration to every facet of our personal and professional lives. Tweet This Quote

3. Impact investing goes mainstream. Matthew Bishop, senior editor of The Economist Group, predicts that in 2016 we will see the impact of last year’s move of major players into impact investing.

“In 2016, three important philanthrocapitalist players will make major strides in growing impact investing. Mark Zuckerberg and Priscilla Chan will start to show why they opted to pledge to give away the bulk of their $44 billion future not via a traditional charitable foundation but through an Omidyar Network-like LLC that can do lots of impact investing.

The Ford Foundation will dedicate perhaps as much as 10 percent of its endowment to impact. And the MacArthur Foundation will roll out a series of initiatives designed to help smaller investors collaborate to scale up impact investing. At the same time, expect mainstream financial organisations from BlackRock to Bain Capital to start implementing their promised commitments to grow impact investing.”

Expect mainstream financial organizations to start implementing their promised commitments to grow impact investing. Tweet This Quote

4. Redefining philanthropy. The launch of the Chan-Zuckerberg Initiative was potentially “exponential” for impact investing, says Jonathan Greenblatt, National Director and CEO, the Anti-Defamation League. This year, he says, the new billionaire philanthropists will continue to redefine “how” to solve society’s problems.

“This was notable, not only because of the end—an incremental $45 billion can have a significant impact on the nonprofit sector—but the proposed means. Chan and Zuck intend to drive social change in a manner that eschews traditional charitable giving and instead embraces impact investing. It’s a whole new way of operating—call it “Zuck Rules”—that literally could reimagine how we donate to those in need just as Facebook reinvented how we interact with each other.”

Mark Zuckerberg intends to drive social change not with traditional charitable giving, but with impact investing. Tweet This Quote

5. Policy and technology to create opportunities for impact. Speaking to the Economic Times of India, Matt Bannick, managing partner of the Omidyar Network, says policy and technology create new opportunities for impact.

“In India more progressive regulations will allow fin-tech to flourish. Then you have big data, small credit or alternative analytics for the unbanked. There are also innovative products beyond credit mobile money and insurance. Even though you now have new payment banks and mobile money, you will still need a network of agents.”

Good policy combined with technology creates opportunities for impact. Tweet This Quote

6. We must resist the temptation to settle. With rapid growth come tensions, says Jem Hudson, CEO of Caldy Group. Hudson calls for a bit of introspection. She asks: Will impact investing redefine finance as we know it, or will it be redefined by finance?

“Since its earliest days, impact investing has been driven by innovative thinking, both with respect to the types of organizations that are funded, as well as the mechanisms through which this funding is provided. But as the innovative spirit of impact investing meets the realities of the capital markets and growing client demand, we are likely to see some retrograde thinking in efforts to “settle into” more scalable and more easily marketable solutions.

We need to resist this temptation. Quite simply, given its nuanced, complex nature, impact investing will not reach its full potential unless we continue to dedicate significant resources to impact-centric financial innovation in 2016 and beyond.”

Will impact investing redefine finance as we know it, or will it be redefined by finance? Tweet This Quote

What are your predictions for impact investing in 2016?

About the author



Led by David Bank, formerly of The Wall Street Journal, ImpactAlpha is establishing a major new media brand for the growing number of people who believe our most pressing social and environmental challenges represent the biggest business opportunities of the 21st century. ImpactSpace is the world’s largest open impact database of ventures, funds, deals, people and organizations.

  • Dennis, thank you so much for this piece! I couldn’t agree more that impact investing is a trend whose time as come. For anyone who is interested in innovative funds like this, check out the recently launched Fund:One of Unreasonable Capital (www.unreasonablecapital.com)!

  • Hjordis Robinson

    I am a huge fan of how this piece can offer a potential cheatsheet to new and upcoming firms and investors in the year 2016. It provides advice to the reader concerning the most important changes occurring in key aspects of impact investing and how to adapt quickly and efficiently to them.

  • James Robertson

    I am interested and excited to see the great change that the Zuckerberg/Chan can make through impact investing. I find it awesome that they are taking the initiative to solve some of societies problems with the great wealth they have acquired.

  • Nicholas Carter

    James, I agree with you. I am also excited to see the great changes that these world leaders can do. Impact investing and other world leaders in venture philanthropy can make amazing differences and changes in society. The Gates foundation, for example, is an already established foundation that is fighting to enhance healthcare and reduce extreme poverty worldwide and has made substantial changes in bettering communities across the globe.

  • Victor Ribakare

    The idea of leveraged smartphone technology to fuel innovation is interesting because at this point there is already so much that can be done with our smartphones. The possibility of what is possible in the future is intriguing. How people will combat the safety issues that may arise, I believe will be a challenge that needs to be combated immediately.

  • Rachel Rodriguez

    Impact investing can make a huge social change. Investors like Zuckerberg and Chan have the ability to make social changes and better our society. I think it is great what these investors are doing and I hope to see impact investing grow even more than the $60 Billion within the next few years.

  • Claire Salvucci

    It is great to see prominent business figures teaming up to redefine the way we solve societal problems. Zuckerberg and Chan have both the capital and creativity to majorly impact the non-profit sector. I am excited to see how this initiative is able to positively affect impact investing.

  • Kevin Marshall

    Its amazing to see two world-known leaders in the markets to go out and make a huge difference on impact investing through social changes. I wonder if more CEO’s will follow Zuckerberg and Chan and continue the trend to impact investing?

  • Emily Butler

    To be completely honest I had no idea what impact investing was when I opened this article. But let me just say I think it’s a brilliant idea and I think that with these predictions for 2016 we are looking at a pretty good future in business.

  • Noah Green

    It is interesting to think how much of an impact investing has on the world. When people think of the term investing they usually get the image in their head of a lot of cash for not a lot of work. I really like how impact investing does not just generate capital, it truly gives something back to society or the environment. I really like how this article connects the idea that smart phones can help “fuel innovation in emerging markets”. They are such a powerful device that can benefit the world with the right ideas. I think a really big impact investment for 2016 will be a strong push for cleaner, renewable energy. There is a huge fad of electric cars, efficient homes and appliances, solar/ wind power, the list goes on and on. This needs to continue to grow and become a normal practice. As environmental friendly technology improves, the world will be a better place to live in resulting in a better society.

  • Michael Potter

    Like a few others, I had to look up several definitions of “impact investing” to really understand what was going on. I think it is very powerful to have these important CEOs like Zuckerberg and Chan playing a huge role in this movement. It will be very interesting to see all the environmental friendly technology emerge in the years to come.

  • Robert Neville

    I agree with multiple things you said here Mr. Potter, especially that it is interesting how many CEO’s are investing in this movement. But for some of these companies it makes me question if they are actually spending the money to make an actual difference or if it is just a strategic marketing move where they spend lets say 5 million dollars to help but then spend 20 million marketing it to show people that they have done good work. Makes me think about that because I know lots of oil and credit card companies have been doing that.