Impact Investing For The Next Generation – Harvard Helps The Wealthy Make Impact

• A Harvard course targets heirs to family fortunes wanting to give back to society
• Impact Investing for the Next Generation program started in 2015
• The 6-month course includes workshops, field exercises, group, and individual projects

While governments dither over issues like climate change with the fear of losing votes, the next generation of high-net-worth individuals is taking proactive steps towards making impactful investments with the help of Impact Investing for the Next Generation.

It is a barely-advertised program by Harvard University and the University of Zurich in collaboration with the World Economic Forum. The Impact Investing for the Next Generation program is designed to guide the heirs of established family businesses and European royalty on the best ways to give back to society.

Impact Investing For The Next Generation

This program was started in 2015 and has been advertised mainly by word of mouth. Individuals wanting to participate in the course must pass an interview and pay a fee of up to $12,000 for a week.

Classes are held in the USA and in Switzerland. These fees are exclusive of airfare and living costs. A more intensive course has a fee of $58,000.

The high fees are not a deterring factor as the course is intended for the world’s wealthiest citizens. Alumni include the heir to the Hyundai group, Chung Kyungsun and Antonis Schwarz, the grandson of the Schwarz Pharma founder.

The course is designed as an applied research program that explored the role family offices play in impact investments. Spread over 6-months, it includes:

• 2 workshops
• Field exercises
• Individual and group work

These tasks aim to help the next generation build a strong foundation of impact investment strategies and policies.

The Participants And Their Challenge

In a survey conducted in 2018, 90% of heirs to family fortunes said that they were interested in giving back to society and making impact investments.

As compared to institutional investors, family offices are perceived to be more important in the space of impact investments as they have more financial freedom to take decisions and shift assets towards such investments.

According to a study by Ernst & Young, high-net-worth individuals will have over $70 trillion in their hands by 2021.

Studies have shown that the current generation of 25 to 40 years old members of these influential families has a more progressive value system and is more interested in the value of impact investing.

However, they are challenged by a number of factors including the options available for such investments, the presumption of financial underperformance, limited collaborations, a difference in generational perspectives on investments and a lack of advisors who specialize in the field.

As a result, though over 60% of the NextGen want to use their family wealth to make a positive environmental and social impact, only 4% are able to do so.

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