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Impact Investing Innovation—From Impact 1.0 to 3.0

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  • Wulf Kaal

    (School of Law, University of St. Thomas, St Paul, MN 55105, USA)

Abstract

Impact innovation has progressed through three phases: 1.0, 2.0, and 3.0. Impact 1.0 introduced carbon credit trading, while Impact 2.0 added participatory grantmaking, impact measurement, and price competitions. Impact 3.0 incorporates Web3 community tools and impact certificate trading. This paper examines the evolution of these phases, focusing on Impact 3.0’s influence on philanthropic practices. Through an analysis of the literature and case studies, Web3 technologies and impact certificate markets are investigated for how these innovations affect transparency and efficiency in social impact initiatives. The information gathered indicates that Impact 3.0 facilitates decentralized impact verification and creates a marketplace aligning stakeholder interests. Consequently, leveraging the features of Web3 technologies can enable philanthropy to scale significantly and provide insights for impact-focused donors aiming to improve outcomes.

Suggested Citation

  • Wulf Kaal, 2024. "Impact Investing Innovation—From Impact 1.0 to 3.0," Sustainability, MDPI, vol. 16(24), pages 1-29, December.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:24:p:11128-:d:1547094
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    References listed on IDEAS

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    1. Lortie, Jason & Cox, Kevin C. & Roundy, Philip T., 2022. "Social impact models, legitimacy perceptions, and consumer responses to social ventures," Journal of Business Research, Elsevier, vol. 144(C), pages 312-321.
    2. Hans Rawhouser & Michael Cummings & Scott L. Newbert, 2019. "Social Impact Measurement: Current Approaches and Future Directions for Social Entrepreneurship Research," Entrepreneurship Theory and Practice, , vol. 43(1), pages 82-115, January.
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