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Social Investments – Generating Social and Economic Returns

With the advocacy of social responsibility gaining in popularity, a growing number of companies around the world are including social investment efforts in their corporate agenda. Social outreach projects may concentrate on issues such as environmental degradation or poverty.

Social InvestmentsPHOTO BY FLICKR.COM/DREAMPONDERCREATE

Social Investments - A Sneak Preview

Socially responsible investment may pertain to negative approaches, as in avoiding businesses such as gambling, tobacco, alcohol and weapons. Instead, socially responsible investors support corporate projects aligned with human rights, consumer protection, diversity or environmental preservation. Social investments in the form of social impact, exemplified by housing and hospital construction projects. Companies make profit from these expansions, but they also contribute to the community by providing affordable shelter as well as medical and educational facilities. Social investments that finance social enterprises help organizations reach socioeconomic goals. Cooperatives that offer financial assistance for agriculture, housing and retail endeavors belong to this category.

Corporate Social Investment - Basic Approaches

Businesses in the United States may form a 501(c)3 charitable foundation under Internal Revenue Service rules so that they can get tax breaks in exchange for allocating five percent of their annual earnings to charity. They may tie up the cause or mission of their nonprofit group to one or more of their brands. This corporate social investment strategy, also known as cause marketing is common among drug makers, which allow wider access to certain rare treatments. Financial firms often make social contributions by hiring staff specifically for charity, tasked to collaborate with nonprofit entities to formulate outreach programs. Corporate social investment is customized by companies, which usually post information about their agendas on their website.

Social Investment Fund - Function

Developing countries are the primary creators and beneficiaries of social funds. It is through a social investment fund that small-scale business owners can get financial support and for poor people to receive welfare aid. Social funds have been shown to reduce corruption and foster innovation by allowing experts to teach workers such as farmers about new approaches to their livelihood. These funds may be represented as venture capitalists and have specializations. Social action funds are widespread in Africa and South America, but there are also several in operations in European countries including Romania, Ukraine, Albania and Bosnia. In Asia, governments helped establish funds with the help of the private sector.

Written by Nelly Kendrick

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