All About Impact Investing

The Global Health Investment Fund, or GHIF, was founded in 2012. This is an investment fund, backed by JP Morgan. Like other funds, it’s designed to make money. However, unlike most investments, this fund doesn’t only seek to make money for investors. The other founding backer of this fund is the Gates Foundation. Known for its dedication to the eradication of malaria, the Gates Foundation is one of the most important drivers of healthcare solutions for the developing world.

The formation of the GHIF is all about this kind of investment. By embracing a “double bottom line,” this fund seeks to both do good and make money. This kind of goal is reminiscent of free-market ideology. The idea is that if people are driven by a profit motive, they will work harder and smarter in order to reach a given goal. Additionally, the profit motive will act as a driver to uncover new efficiencies.

For the Global Health Investment Fund, one of the keys is finding the right healthcare companies to invest in. Because the fund is determined to make both a difference and make money, they make careful evaluations when it comes to selecting investment opportunities. Instead of charitable giving, which can be driven by religious or emotional impulses, the investors are looking for sustainable and effective medical technologies.

The GHIF has a number of factors it looks for before making an investment. When they evaluate companies, they consider whether the service or product offered will serve a need in the developing world. After answering that question, they consider profitability. A focus on profitability may sound heartless to some. However, accountability to investors can be good for a business of any kind. Profit-driven businesses are motivated to find efficiencies in ways that charity enterprises may not be.

However, the money question isn’t the end of the road for promising healthcare products that may not make money. Because of the role of the Gates Foundation, promising ideas can easily be passed on from the GHIF to the Foundation. This close relationship with a charitable organization allows the GHIF to truly amplify its good-doing. The Gates Foundation benefits, too, from the rigorous vetting process the medical technology has already gone through.

This article was originally posted to ChartWestcott.com