“Fine print”

Not a substitute for charitable donations.  Social investing has a great variety of virtues as described throughout these pages.  However, the goals of reduced poverty in developing countries cannot be achieved by impact investing alone.  In some cases, capable social entrepreneurs may succeed less frequently in spite of the existence of profitable opportunities due to other barriers in addition to the absence of capital.  In many other cases, investment capital cannot replace the need for charitable donations.  Very often, developing countries require donated funds in the hands of well-intended providers in order to provide the foundation for future investment capital.  Impact investors are encouraged to maintain their donations as they search for investments with maximum social impact.

Prudent investors.  Social impact investors are advised that their investment in developing countries and in fact any investment in developing countries are subject to risks that may be unknown or unknowable by investors in developed countries.  A prudent investor should invest only those discretionary funds that are not necessary to assure the education of children, the health of parents, and a long and happy retirement.  The tool most often used to assess the allocation of resources (although not the amount of resources) is asset allocation.  While risk tolerance should be incorporated, discussions of asset allocations often gravitate to an allocation based on age but subject to individual needs and desires.

Accredited investorsUnless securities are registered with the US Securities and Exchange Commission, they can only be sold in the US to those who qualify as “accredited investors” under Rule 501 of Regulation D of the Securities Act of 1933.  Those standards cover various kinds of entities but an individual investor must meet one of the following:

  • a natural person who has individual net worth, or joint net worth with the person’s spouse, that exceeds $1 million at the time of the purchase, excluding the value of the primary residence of such person; or
  • a natural person with income exceeding $200,000 in each of the two most recent years or joint income with a spouse exceeding $300,000 for those years and a reasonable expectation of the same income level in the current year

Investors are advised to seek legal advice regarding their qualifications prior to making any investment that may be subject to these requirements.

Not a broker/dealer.  The sponsor of MoneySpentWell.org, Vista Ventures Social Impact Fund, is an independent entity promoting social entrepreneurs in developing countries and is not a broker/dealer or affiliated with a broker/dealer as defined by US securities laws.