Investing in Social Impact: A Proven Strategy for Puerto Rico’s Future
By Alejandra Jimenez
Social impact investing, which seeks to generate both financial returns and positive social outcomes, has gained significant traction globally and within the United States over the past few decades. This investment approach aligns capital with initiatives that address pressing social and environmental challenges, offering investors an opportunity to contribute to societal well-being while achieving financial gains. In Puerto Rico, the potential for social impact investments is particularly compelling, given the island’s unique socio-economic landscape and the transformative work of organizations like Project Makers.
The Evolution and Performance of Social Impact Investing in the United States
The roots of socially responsible investing in the United States trace back to the 18th century, with religious groups avoiding investments in industries contrary to their ethical beliefs, such as slavery and alcohol. This foundational ethos evolved over time, leading to the modern concept of impact investing, which intentionally seeks measurable positive societal outcomes and benefits alongside financial returns.
The growth trajectory of impact investing has been remarkable. According to the US SIF Foundation’s 2018 report, sustainable, responsible, and impact investing assets reached $12 trillion, accounting for 26% of all professionally managed assets in the United States. More recently, a 2020 global analysis by Morningstar indicated that assets in sustainable funds reached nearly $1.7 trillion, with net flows into U.S. sustainable funds surpassing $51 billion. This trend reflects a growing recognition among investors that integrating environmental, social, and governance (ESG) factors can mitigate risks and identify opportunities for superior long-term returns.
Performance data supports the viability of impact investments. A study by PGIM Real Estate indicated that impact investors targeting market-rate returns overwhelmingly reported performance in line with or exceeding expectations. Studies have shown that ESG-focused institutional investments are projected to grow by 84% to $33.9 trillion by 2026, making up 21.5% of assets under management. This evidence challenges the misconception that social impact comes at the expense of financial performance, demonstrating that investors can achieve competitive returns while contributing to societal good.
The Case for Social Impact Investing in Puerto Rico
Puerto Rico presents a unique and compelling landscape for social impact investments. The island has faced numerous challenges, including economic downturns, natural disasters, and infrastructure deficits. However, these challenges also unveil opportunities for investments that can drive substantial social and economic benefits. Investing in Puerto Rico’s underserved communities can catalyze economic mobility, reduce poverty, and promote sustainability. The island’s rich cultural heritage, strategic location, and resilient population provide a fertile ground for innovative social enterprises that address local needs while offering scalable solutions applicable elsewhere.
Project Makers: Catalyzing Economic Mobility and Sustainability
At the forefront of fostering social impact in Puerto Rico is Project Makers, a non-profit organization dedicated to empowering entrepreneurs from disadvantaged communities. Our mission is to reduce poverty by providing comprehensive support to individuals aiming to establish, formalize, or expand their businesses, thereby promoting economic mobility and community sustainability.
Since our inception in 2021, Project Makers has made significant strides:
Entrepreneurial Support: We have impacted over 500 entrepreneurs across 56 municipalities, with 67% being low- to moderate-income individuals and 75% women.
Accelerate Program: Launched in 2022, our Accelerate program is Puerto Rico’s first accelerator focused exclusively on social impact enterprises. It assists entrepreneurs in scaling their businesses while amplifying their social impact, aiming to eradicate poverty and enhance the island’s sustainability.
Oasis Project: We are part of the Oasis Hub project, a $43 million, 112,000-square-foot mixed-use development. This initiative includes a K-12 school, health clinic, workforce training center, and an entrepreneurship incubator and business services, addressing multiple community needs simultaneously.
Innovative Tools: In collaboration with Happy Mind, we introduced the “Agenda para Emprendedores,” a tool designed to support entrepreneurs at various development stages, strengthening Puerto Rico’s entrepreneurial ecosystem.
The Call to Invest in Puerto Rico’s Future
The evidence is clear: social impact investments can yield competitive financial returns while driving meaningful societal change. Puerto Rico stands at a pivotal moment where such investments can transform challenges into opportunities, fostering economic resilience and community empowerment. Project Makers invites investors, philanthropists, and stakeholders to join us in our mission to cultivate and invest in Puerto Rican entrepreneurs. By supporting Project Makers, you are not only investing in individual businesses but also contributing to a broader movement towards economic equity and sustainability on the island. Your contribution can take various forms:
Financial Donations: Monetary support enables us to expand our programs, reach more entrepreneurs, and amplify our impact.
Partnerships: Collaborate with us to develop new initiatives, share expertise, or provide resources that align with our mission.
Mentorship: Offer your time and knowledge to guide emerging entrepreneurs, helping them navigate challenges and seize opportunities.
With the right support, entrepreneurs from disadvantaged communities can drive economic growth, reduce poverty, and enhance sustainability. We call upon investors and partners to join us in this transformative journey. Together, we can create a thriving, equitable, and sustainable future for Puerto Rico. To donate or learn more about partnership opportunities, please visit our website at www.projectmakerspr.org.
Alejandra Jimenez
Chief Operating Officer
Project Makers
Project Makers is a non-profit organization that provides education, resources, technical assistance, and mentoring to young people and adults in disadvantaged communities who want to establish, formalize, or grow their business. Our mission is to reduce poverty by providing comprehensive support to entrepreneurs to scale their impact by promoting economic mobility in Puerto Rico and sustainability in our communities. Since 2021, we have impacted more than 500 entrepreneurs in 52 municipalities, where 63% are low- to moderate-income individuals and 75% are women.
