As family offices become more prevalent, many are looking beyond financial returns and considering the impact their investments have on society and the environment. In this blog post, we’ll explore the role of philanthropy and social impact investing in family office portfolios.

Philanthropy has long been a hallmark of family offices. It allows families to give back to the community and support causes they care about. But beyond traditional giving, many family offices are now exploring social impact investing as a way to align their investments with their values.

Social impact investing involves making investments with the goal of generating both a financial return and a measurable social or environmental impact. This can include investments in renewable energy, affordable housing, and sustainable agriculture, among others.

For family offices, social impact investing offers a way to create a positive legacy and make a difference in the world. It can also be a way to engage and educate the next generation about the importance of investing with purpose.

But while social impact investing can be rewarding, it’s important to note that it’s not without risks. Many social impact investments are relatively new and untested, and may not offer the same level of liquidity or diversification as traditional investments. Additionally, it can be challenging to measure the social or environmental impact of an investment, which can make it difficult to assess its effectiveness.

That said, there are steps family offices can take to mitigate these risks. One is to work with a financial advisor who specializes in social impact investing and can help identify opportunities that align with the family’s values and goals. Additionally, family offices can consider joining organizations like the Global Impact Investing Network or the Sustainable Investment Institute, which provide resources and guidance for impact investors.

Ultimately, the decision to include social impact investments in a family office portfolio is a personal one, and will depend on the family’s goals, values, and risk tolerance. But as more families consider the impact of their investments on society and the environment, it’s clear that philanthropy and social impact investing will continue to play an important role in the family office landscape.

If you’re looking to incorporate social impact investing into your family office portfolio, JTT Accounting can help. Our team of experienced accountants can work with you to develop a customized investment strategy that aligns with your values and goals. Contact us today to learn more.