Investing With Impact

What if money itself could help heal the world instead of harming it? In Investing with Impact, Jeremy K. Balkin challenges one of the most deep-seated assumptions in modern economics: that profit and purpose are incompatible. Drawing on the events of the 2008 global financial crisis and his own experience in finance, Balkin argues that the financial system did not fail because capitalism itself was immoral — it failed because people within it lost their ethical compass. His central claim is simple but profound: finance is a force for good when guided by moral courage and enlightened self-interest.

Balkin’s mission is to restore capitalism’s moral foundation by redefining how people, institutions, and governments think about money. He builds a case for impact investing — investments that intentionally pursue both financial returns and measurable social outcomes — as the way to realign the financial system with its higher purpose of human progress. Through this lens, money becomes not a vice, but a vehicle for justice, innovation, and shared prosperity.

A Moral Crisis, Not a Market Failure

Balkin begins by reframing the 2008 financial meltdown. He notes that while Wall Street institutions like Lehman Brothers and AIG collapsed under reckless risk-taking, the deeper issue was a collapse of human values — what he calls a “morality crisis.” Banks are built on trust, yet trust itself eroded as greed replaced stewardship. Citing figures like Ben Bernanke and Timothy Geithner, he shows how the crisis endangered not only the economy but the moral legitimacy of capitalism itself. The problem wasn’t free markets, he writes, but “unenlightened self-interest” — selfishness disguised as rational ambition.

Unlike many critics who blame abstract systems or political ideologies, Balkin turns the mirror toward individuals. Every citizen who enjoyed inflated housing values or booming stocks without questioning unsustainable debt, he argues, shares responsibility. This sense of shared moral accountability is central to his philosophy of enlightened self-interest: doing what’s right for others ultimately serves oneself and the whole system.

From Blame to Responsibility

The author sees the post-crisis culture as mired in the “blame game”— scapegoating Wall Street or Congress while ignoring collective complicity. Quoting former Swiss National Bank chairman Philipp Hildebrand, he underscores that the crisis was “a collective failure of society at large.” Instead of vilifying capitalism, Balkin calls for a moral realignment — a reawakening of finance’s original role: to match ideas with capital and enable prosperity. Financialization had once been the engine of growth, he explains, but by 2008 it had become self-referential — enriching the few while creating systemic risk for all.

To stop history from repeating, Balkin urges readers to reject moral apathy. Whether you’re an investor, policymaker, or consumer, your choices can either perpetuate greed or generate impact. As he reminds us, “Time is the most precious non-renewable resource there is.” Allocating that time — and your capital — with purpose is the essence of impact investing.

Millennials and the Rebirth of Capitalism

Balkin’s optimism rests with the millennial generation — now inheriting both the debts and dreams of their forebears. In his analysis, millennials are not disillusioned idealists but pragmatic reformers. Rather than rejecting capitalism, they are reinventing it. Drawing on Pew Research and Deloitte studies, he shows that millennials prize businesses that “improve society” over those that merely generate profit. These digital natives, raised amid transparency and disruption, are demanding authenticity and ethics in the marketplace — and soon, their preferences will reshape Wall Street.

For Balkin, millennials represent capitalism’s moral recovery. They are skeptical of politics but not of enterprise; they volunteer more than any generation before them and crave meaning in work. As they inherit an estimated $41 trillion in wealth from baby boomers, they will channel these funds toward what he calls “finance as a noble cause.”

Impact Investing: The New Ethic of Capital

If the first half of the book diagnoses the moral collapse, the latter half offers a solution: impact investing. This approach fuses economic logic with moral purpose. Impact investors intentionally seek both financial return and measurable social benefit, proving that profit need not come at the expense of people or the planet. Balkin traces the philosophy’s lineage to a 2007 Rockefeller Foundation meeting that coined the term and presents it not as a niche movement but the logical evolution of capitalism itself. “Every investment has impact,” he insists — the only question is whether that impact is positive or negative.

He expands this idea through his “6E Paradigm” — a six-dimensional model (Economics, Employment, Empowerment, Education, Ethics, and Environment) for evaluating both profit and social outcomes. Using Starbucks Corporation as a case study, he illustrates how companies can thrive financially while fostering ethical supply chains, reducing environmental impact, and empowering diverse employees.

Finance Reimagined

The book culminates in an inspiring vision: a financial system rebuilt on moral courage and measurable purpose. Balkin envisions banks and investors not as villains, but as stewards of prosperity. By positively influencing the allocation of capital, finance can fund clean energy, inclusive infrastructure, microfinance for the poor, and innovation that uplifts humanity. This is not utopian thinking — it’s pragmatic idealism backed by trillions of dollars in pent-up capital and a generation demanding change.

Ultimately, Investing with Impact is both a manifesto and a blueprint. It argues that you don’t need to choose between doing well and doing good — in fact, doing both is the only sustainable path forward. Balkin’s challenge is moral as much as financial: rebuild trust, restore human dignity in markets, and prove that capitalism, when guided by enlightened self-interest, remains humanity’s greatest engine of progress.

Balkin opens with a sobering reflection on the global financial crisis of 2008 — not as an act of fate, but as the product of collective moral failure. He insists that the financial system itself didn’t collapse because capitalism was broken. Rather, it failed because human actors, motivated by myopic selfishness rather than enlightened self-interest, lost their ethical compass. This distinction sets the stage for the book’s moral argument: you can’t fix finance by regulation alone; you must fix the people who operate it.

Scapegoating Wall Street

After the meltdown, the public demanded to know who was responsible. Time magazine published a list of “25 People to Blame,” putting Alan Greenspan near the top, while Rolling Stone branded Goldman Sachs “a great vampire squid wrapped around the face of humanity.” Balkin critiques this fixation on villains. While firms like Lehman Brothers epitomized reckless risk, he writes, the crisis was also fuelled by government deregulation — notably the repeal of the Glass-Steagall Act through the Gramm-Leach-Bliley Act of 1999 — and by public complicity in speculative consumerism. As he summarizes, “It is disingenuous to accept the rewards without accepting any of the responsibility.”

Collective Responsibility

To illustrate shared accountability, Balkin invokes both moral philosophy and hard data. From Joseph de Maistre’s maxim, “Every nation gets the government it deserves,” to Pew Research showing that 47% of Americans blamed themselves “not at all” for the crisis, he argues that this moral evasion impedes reform. Even Michael Bloomberg observed that Congress, not banks, helped trigger the mortgage debacle by forcing risky lending. In Balkin’s eyes, the financial collapse was society’s mirror — reflecting collective greed, short-termism, and moral blindness.

Moral Courage Determines Culture

He quotes Bank of England governor Mark Carney: “Ultimately it’s about the individual seeing their broader responsibility for their clients and their society.” For Balkin, this is the pivot — laws and compensation reforms can’t enforce ethics. Only moral courage can transform culture. Thus, the solution lies not in more rules but in reawakening internal virtue. Finance should reward long-term thinking, transparent incentives, and ethical leadership, not short-term gambling and taxpayer bailouts.

The chapter ends with a rallying cry: each of us benefits from the system’s prosperity, so each of us must share in its repair. Balkin redefines the crisis from an economic collapse to a moral reckoning — a call to rebuild capitalism on the philosophy of enlightened self-interest, where serving society and self are one and the same.

In a sweeping sociological analysis, Balkin shifts focus from the past to the future: the millennial generation. He calls them the “politically unclaimed generation,” a cohort scarred by the crisis but uniquely prepared to reinvent capitalism. Drawing from Pew, Deloitte, and Reason-Rupe surveys, he describes how 74 million young Americans have inherited debt, unemployment, and distrust — yet remain “stubborn economic optimists.”

The Generational Divide

Millennials face what Paul Taylor terms in The Next America as intergenerational economic warfare. Baby boomers, cushioned by Social Security and rising asset values, have left record debt for their children. By 2030, Balkin notes, only two workers will fund each retiree. Millennials are thus expected to shoulder taxes for benefits they may never see. This fiscal imbalance, he warns, risks “bankrupting the future” — unless the economy prioritizes younger voices and innovation-driven growth.

Skepticism and Self-Reliance

Disillusioned by politics and organized religion, millennials instead express trust in themselves and technology. Only 19% think most people can be trusted, but they overwhelmingly believe in entrepreneurship and the free market. The Reason-Rupe survey reveals that two-thirds see government as inefficient and cronyistic, while 64% favor economic freedom over state control. They want government “out of their bedrooms and bank accounts.” Yet paradoxically, many still want it to help those in need — a pragmatic, hybrid philosophy of enlightened self-interest in action.

Redefining the American Dream

For millennials, prosperity isn’t picket fences and pensions — it’s purpose, freedom, and flexibility. Only 59% see homeownership as essential; 70% reject wealth for its own sake. Instead, they value autonomy and ethical alignment. As Starbucks CEO Howard Schultz exemplifies with his “profit with purpose” model, millennials want businesses that “improve society” even more than those that maximize profit. This value shift, Balkin notes, will soon redirect trillions of dollars toward impact and sustainability-focused investments.

Millennials’ dual commitment to freedom and fairness makes them the ideal vanguard for Balkin’s vision. They have been burned by myopic greed, but believe deeply in capitalism’s potential. With technology, transparency, and impact investing, they can restore capitalism to what it was always meant to be: a moral system that rewards doing well by doing good.

Balkin reframes prosperity as a moral and economic principle rooted in the philosophy of enlightened self-interest. To prosper is not merely to accumulate wealth, but to create value for others while benefiting oneself. This concept—doing well by doing good—is the heart of both capitalism and impact investing. Drawing on examples from the United States to China, he argues that ethical entrepreneurship, not government aid or redistribution, is the surest path to human progress.

Freedom and Reciprocity

In echoing the Golden Rule, Balkin portrays enlightened self-interest as an economic version of moral reciprocity. The success of one enriches many through trade, employment, and innovation. He traces capitalism’s moral lineage back to thinkers like Adam Smith and modernizes it with data: according to the World Bank, global poverty rates fell from 42% in 1981 to 21% in 2005, largely due to free trade and entrepreneurship. Bono’s statement that “entrepreneurial capitalism takes more people out of poverty than aid” encapsulates Balkin’s argument succinctly.

The Role of Government

Government’s role, he insists, should be limited but enabling—creating laws, not running businesses. Quoting Lincoln’s “government of the people, by the people, for the people,” Balkin frames governance as stewardship of liberty. Excessive spending, taxing, and debt crowd out private enterprise. With U.S. debt near 80% of GDP, he warns, the nation is nearing an economic tipping point where growth stalls. The solution? Empower the private sector to innovate and expand, not depend on deficits to drive prosperity.

Economic Growth as a Moral Imperative

Economic growth, he contends, is the greatest anti-poverty program ever devised. It not only raises incomes but fosters civic freedoms. The Cato Institute’s “Economic Freedom of the World Index” supports this: freer nations are richer, healthier, and more democratic. China’s experience under Deng Xiaoping—summed up in the slogan “To get rich is glorious”—proves that selective capitalism can uplift hundreds of millions. Prosperity, Balkin argues, is inherently ethical when pursued through productive enterprise rather than parasitic speculation.

Reimagining prosperity thus means reclaiming capitalism’s moral roots. When entrepreneurs act in enlightened self-interest—serving others while profiting—the world flourishes. As Milton Friedman reminded us, free markets are not the enemy of virtue; they are its vehicle. Balkin calls on readers to champion this truth, to see profit not as greed fulfilled but as good rewarded.

Balkin defines impact investing as “positively influencing the allocation of capital” with the explicit intention of achieving both financial return and measurable social benefit. It’s not charity, but purpose-driven capitalism. Every investment, he stresses, has an impact — the real question is whether it is positive or negative. Impact investing, then, is about making profit a byproduct of solving social problems.

Beyond Philanthropy

While philanthropy depletes finite resources, impact investing amplifies them. Profits can generate further capital for charity and reinvestment, creating a virtuous cycle. Balkin contrasts this regenerative model with traditional socially responsible investing (SRI) or ethical screening — which merely avoids “bad” industries like tobacco — noting that these approaches reduce returns and do little to change corporate behavior. Impact investing, by contrast, expands opportunity by actively funding solutions, from microfinance initiatives to green bonds and education projects.

A Trillion-Dollar Opportunity

Citing research from the World Economic Forum and Morgan Stanley, Balkin estimates over $3 trillion in global capital already earmarked for responsible investments but only $25–$40 billion actually deployed for impact — an enormous gap ripe for growth. Pension funds control over $18 trillion in the U.S., yet only 6% have made impact investments. Millennials’ values and technology-driven transparency will likely close this gap by directing wealth toward enterprises that deliver both profit and purpose.

Redefining Value

Drawing inspiration from Benjamin Graham’s “value investing,” Balkin reframes value itself as dual: financial and social. Successful impact investments create measurable outcomes—reduced emissions, improved education, job growth, or health gains—without compromising returns. The social impact bond, or “pay-for-success” model, exemplifies this approach. He imagines Warren Buffett funding education through bonds that pay returns only when learning outcomes improve. In this model, “smarter children are society’s best dividend.”

Impact investing’s genius lies in aligning moral incentives with market forces. By building mechanisms that reward doing good, the system sustains itself. Finance, once vilified, becomes the engine of progress. This is Balkin’s grand reframing: finance doesn’t just fund the world — it can fix it.

To make impact investing practical and scalable, Balkin introduces his proprietary 6E Paradigm—a holistic framework for analyzing investments across six dimensions: Economics, Employment, Empowerment, Education, Ethics, and Environment. This model moves beyond the narrow lens of profit and carbon metrics to quantify a company’s full impact on society.

Economics and Employment

Economic metrics still matter—profitability, valuation, and market capitalization remain the foundation. But Balkin argues that economic success means little if it doesn’t generate jobs and dignity. He recalls Henry Ford’s revolutionary decision to double wages in 1914, proving that paying workers well increases loyalty and productivity. Today, investing in companies that expand equitable employment opportunities delivers both financial and moral returns.

Empowerment and Education

Corporate empowerment, through diversity and inclusion, drives innovation and resilience. Balkin cites a McKinsey study showing that diverse executive teams outperform peers by 53% in return on equity. Companies like Starbucks embrace this ethic: 63% of its U.S. workforce are women, and it funds employees’ college tuition through the Starbucks College Achievement Plan. Education, he adds, multiplies social returns by enhancing human capital and civic strength.

Ethics and Environment

Ethical behavior is the glue of sustainable success. Balkin revisits cautionary tales—Enron’s accounting fraud, Madoff’s Ponzi scheme—to warn of what happens when executives abandon integrity. Conversely, companies like BHP Billiton and Starbucks lead by “doing the right thing” even in high-impact industries, cutting emissions or insisting on ethical sourcing. Harvard research backs him up: firms with strong sustainability cultures outperform others by nearly 5% annually.

By applying the 6E Paradigm, investors can identify true impact leaders. In his model, Starbucks earns a six-star rating—profitable, ethical, sustainable, and empowering. The framework not only simplifies evaluation but invites mainstream capital into the field by marrying analysis with conscience. For Balkin, when impact is measured holistically, finance finally redeems its moral and economic promise.

Having laid the ethical and analytic groundwork, Balkin illustrates how finance can practically transform the world through four major domains: financial inclusion, infrastructure investment, social impact bonds, and philanthropic capital. Each channel embodies his vision of positive, measurable social outcomes achieved through profit-driven means.

Financial Inclusion

With 2.5 billion adults still unbanked, access to safe, regulated finance is a basic human right. Balkin celebrates pioneers like Muhammad Yunus and Grameen Bank, which empower women through microloans boasting 98% repayment rates. Technology amplifies this revolution: mobile banking in Africa has lifted millions into the formal economy, echoing Bill Gates’s call for “a paradigm shift in the way the poor approach life—seizing control rather than managing it.”

Investing in Infrastructure

Infrastructure, he notes, might be the world’s most undervalued impact asset class. Citing the IMF and World Economic Forum, Balkin shows that a $1 billion investment in new infrastructure can create 18,000 jobs and raise GDP by 1.5% over four years. Projects like Uganda’s Bujagali Hydroelectric Station or Australia’s Victorian Desalination Plant exemplify partnerships where private capital fuels public good. Such ventures deliver steady returns and enduring human benefits — clean water, energy, connectivity.

Pay-for-Success Bonds and Philanthropy

Social impact bonds invert traditional welfare logic: investors fund programs like prisoner rehabilitation or early education, and governments repay them only if outcomes improve. In Peterborough Prison, recidivism fell 8.4%, triggering investor payouts. In Utah, Goldman Sachs helped finance preschool access for at-risk children. Balkin calls this model “commerce with conscience”—proof that measurable compassion can be profitable. Even philanthropy, he argues, should be treated as an asset class, guided by data, strategy, and returns in social utility rather than sentiment alone.

Through these case studies, Balkin turns vision into practice. Finance, once maligned for destruction, becomes an architect of progress. Where others see markets as amoral, he sees morality made measurable. His message is unwavering: when money meets meaning, everyone wins.

Balkin’s closing argument centers on agency — the idea that investors, like voters, wield transformative power. He views active investors as moral agents who can shape corporate culture and societal direction by influencing how capital is deployed. By defining “impact” as a core investment criterion, investors can realign markets toward long-term prosperity, transparency, and accountability.

Owning the Change

Investor activism, he explains, can work two ways. First, through direct corporate engagement — shareholders pressing companies for sustainability transparency, diverse leadership, or ethical supply chains. Second, by market signaling — rewarding “good actor” corporations with capital and penalizing laggards through divestment. The success of activist hedge funds, which outperformed the MSCI World Index by 53 percentage points between 2006 and 2011, shows activism can coexist with superior returns.

Market Incentives for Good

He proposes a subtle but powerful reform: if all S&P 500 firms disclosed energy costs explicitly as balance-sheet line items, investors and analysts would naturally pressure managers to minimize waste — cutting emissions, costs, and inefficiency simultaneously. Data from PwC shows that 98% of major companies link emission reductions to value creation. The market, Balkin concludes, responds to incentives faster than governments respond to treaties.

In the end, Investing with Impact is both a moral awakening and a practical manual. Balkin urges investors to take moral ownership of capitalism’s future: by measuring what matters, rewarding ethical performance, and refusing neutrality in the face of inequality. When investors act as citizens and capital seeks purpose as well as profit, finance fulfills its highest calling — a true force for good.