“If you get rich through capitalism, you have a responsibility to give back,” Urs Wietlisbach told me over an in-depth conversation about committing publicly to contributing a majority of his wealth to philanthropy.
Urs, the founder of Partners Group and Blue Earth Capital, is one of 27 ultra-high-net-wealth impact investors across Europe, North America, and Australia I spoke to over the past several months to explore what drives their impact strategies.
One key denominator across my conversations was that noneconomic resources such as relationships, reputations, and knowledge — what we call “multicapital” — are absolutely critical for driving impact. These one-on-one conversations have shown that noneconomic resources can drive impact even in the absence of economic capital.
The conversations shaped the Center for Sustainable Finance and Private Wealth’s The Investor’s Guide to Multicapital Strategies, the newest publication in our Investor Guides series. Published today, it is a joint effort with the MIT Sloan Sustainability Initiative, Forward Global, and NEXUS and brings research-backed insights to thousands of wealth holders and decision-makers across sustainable finance, impact investing, and wealth management.
Multicapital strategies
Traditional investing and philanthropy focus solely on economic resources, leaving other valuable assets – social capital, cultural capital, and symbolic capital – untapped.
When wealth holders think of their resources as being purely economic, they underestimate the power of their social capital (networks), symbolic capital (reputation) and cultural capital (skills knowledge, and sharing that knowledge). Everyone has this full range of capitals at their disposal. Wealth holders in particular possess a great amount of influence through these noneconomic means, and it is vital in impact planning to consider how best to leverage them for the greater good.
Exploring a multicapital approach can help investors understand the relationships of different types of capital to one another, and strategize for their deployment. For instance, as an investor, you might have an elite education, inherited or earned financial wealth, a famous last name, access to certain networks, and more. And you may have already deployed and multiplied certain forms of capital, by investing economic capital or earning a reputation and making key relationships through a successful business endeavor.
Wealth holders’ capacity to positively impact the world begins with a deep understanding of their resources.
Karine Sarkissian, founding partner of Tamar Capital and co-founder of Le Studio, shared with me her multicapital strategy for supporting impact entrepreneurs. When Karine founded the Tamar Capital family office with her brothers, she brought a community-centered approach from her background in environmental design and urban planning.
Recognizing that her design expertise could enhance venture capital work, Karine and her colleague Sophie Durey created “Le Studio” – a venture studio offering portfolio companies free services in branding, storytelling, and impact measurement.
She also launched “Under the Hood,” a podcast highlighting founders and investors, established roundtables and family office circles across the US, UK, and Lebanon, and created spaces where entrepreneurs share resources, investor contacts, and expertise. By doing so, Karine has has strategically combined cultural capital (her design and planning skills), social capital (her networks), economic capital (family office investments), and symbolic capital (her reputation), creating meaningful impact.
Framework for impact
Through these interconnected conversations, as well as key insights from the philanthropy and systems change fields, among other traditions, the Center for Sustainable Finance identified a five-step framework for wealth holders to make a positive impact.
Step one involves developing a capital inventory by mapping all deployable resources. Step two involves honing your impact focus by aligning your capitals with causes that energize you and match your strengths. Step three is centering a systems awareness by understanding the context, root causes, and areas for leverage.
Step four is creating a deployment strategy by designing specific actions with complementary partners who bring different capitals. A key reminder for a successful step four is that experts working in communities of practice and other proximate leaders have unique and valuable lived experience that can inform an impact focus.
Step five entails reflecting by assessing returns across all capital types and adjusting your approach accordingly. Finding a way to assess impact is key to a multicapital approach. Be sure to choose an assessment approach that is both meaningful to you and indicative of the contribution of your capitals.
What the investors I spoke to have shown is that the path to meaningful change is not linear; it is multifaceted and multilayered. We have created a clear framework to follow for those wealth holders who are committed, thoughtful, and passionate. At its heart, impact is not just about deploying financial assets, but about recognizing that wealth itself is multidimensional. When wealth holders embrace this wider spectrum of capital, they begin to see that their greatest legacy may come not from what they give, but from how they use all that they already have.
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Kirsten Andersen is Director of Research at the Center for Sustainable Finance and Private Wealth, and lead author of The Investor’s Guide to Multicapital Strategies.
