The ideals of doing more with our capital, of being more deeply engaged and more transformative are not new since the beginning, humanity has grappled with the question of the purpose of capital.  

Jed Emerson, a thought leader in impact investing, social entrepreneurship, and strategic philanthropy argues that to redefine today’s widely held belief that the purpose of capital is to generate more capital, we must look to past practices of community-wide wealth and sharing. 

Last week I had the pleasure to listen to Jed discuss his take on the purpose of capital with the Small Giants Academy’s Danny Almagor and Berry Lieberman.

Jed explored how we can reframe our approach to modern financial capitalism — how to deploy capital at scale with integrity, with authenticity, with deep impact, rather than simply branded impact. 

While his early career was concentrated in social work and community development, Jed soon realised that in the non-profit sector — at least at that time — capital moves on the basis of politics, perception, and persuasion…and not necessarily performance. 

As such, while Jed saw a place for philanthropy, for charitable acts, and for giving, he knew that more was needed to move significant amounts of capital in a systems transforming way. 

The issue, and the challenge, was a bifurcated value proposition: accepting to either “do well”, or to “do good”. You either work for a non-profit or for profit. You make a grant or you make an investment. 

Value was separated into parts rather than being integrated and whole.

But the reality was that this separation is not so clear cut — non-profits have economic and financial worth, while on the other hand, businesses can create social and environmental value.

By the 2000s the distinct bifurcation and separation of values had come together under the banner of impact investing, which sought to draw a straight line between the investment of capital and the creation of ecosystem level of change and impact.

This redefined the understanding of performance, resulting in total portfolio management — deploying philanthropic, near market, or market rate capital, in an integrated holistic way. 

In time, as impact investing grew and matured, Jed recognised that we had become very good at financial engineering and structuring capital, at creating innovative vehicles and metrics and definitions. And while that undoubtably created benefits, such pursuits risked losing sight of what it is that we were trying to achieve. 

With that realisation, Jed set about refocusing on the why, setting aside discussion of the how. Of course, the why and how will be different for each of us as individuals as we seek to optimise what we can achieve with our personal capital over the course of our lifetime. 

The current widely accepted view of the purpose of capital being its own self replication — to use capital to make more capital — is actually an aberration in human history. It’s an idea that largely arose over the last 60 years with the rise of shareholder capitalism and shareholders primacy, and the hyper concentration of wealth at a very small level of the population.

Even so, there are now trillions of dollars sloshing around in capital markets across the world claiming different levels of impact and sustainability. We’re in a fundamentally different place than we were 35 years ago and that, in and of itself, is a victory.

The issue now becomes how do we deploy that wealth to reframe our approach to modern financial capitalism? How do we deploy capital at scale with integrity, with authenticity, with deep impact, not simply branded impact? 

Jed explained that a sense of obligation drove him for a long time, which he says can make you very cynical or it seems never ending. 

I’ve spent a lot of my life as the large boulder in the river, putting my force and emphasis against the flow, fighting for better ideas, better vision, better passion to do what’s right.” 

“When you stop and reposition yourself as the river itself and not the rock or the boulder, you suddenly become free because it’s not about your individual force against these things, it’s about you joining the larger force of humanity’s quest and inquiry and realisation of self in other that becomes so liberating and powerful in terms of a weight lifted off of you to become free to explore these things.” 

We too should realise that, ultimately, our self is a larger part of the whole and the greater good — we possess our place in this process of humanity’s exploration. Systems change starts at home by understanding the relationship between self and other so focus on relationships with nature, with people, and family.

When you take that posture and you connect yourself with multiple generations, traditions, and wisdom perspectives around what this is, all the sudden it’s no longer just about you. 

This is nothing new, humanity has thought about economics and finance in this way for centuries and this is evident in many cultural practices observed today.

Consider the American Indian communities of the Northwest Pacific coast and their custom of “potlatch”, the ceremonial distribution of property and gifts to affirm or reaffirm social status. 

In such communities, your measure of wealth was how much you could give away. Redistributing your wealth made you a very wealthy person even though you no longer had assets in the sense we understand them. Similarly, in Africa, the concept of “ubuntu” also encourages a notion of shared value, shared wealth, and community. 

Such ideals do appear in Western societies today, where people are saying sure I want to have a level of health and wellness, but I’m not sure that I want that at the expense of everyone else, at the expense of my children. 

Today, Jed is chief impact officer at AlTi Capital, a US$60 billion firm with a footprint in the US, Europe, the Middle East, and Asia. This is not an impact investment firm, but a firm that is seeking to manage its impacts with intentionality. 

He believes that being locked up in this idea of whether you are an impact investor or not misses the larger point. All capital and all companies have impact, so we are all complicit in this system and we need to own that role, that place, that source of our own wealth and privilege and be more deeply engaged in connecting to create change within that system.  

A recording of the discussion can be found here, while a free digital version of Jed’s book, “The Purpose of Capital: Elements of Impact, Financial Flows and Natural Being”, is available at

Jed has also co-authored seven books, including the original book on impact investing in 2011, “Impact Investing: Transforming How We Make Money While Making a Difference”.  

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