Most investors, when sizing up a company, ask a simple question: Will this company make me money?" But John Grafer, a principal with Satori Capital, likes to ask a question most traditional investors never think of: "Does your receptionist have an equity stake in your company?" Grafer is one of a growing breed of investors who look beyond the bottom line and ask what a company is doing to help society. It's called impact investing, and its supporters say it combines the shrewdness of the for-profit marketplace with an earnest desire to do good. "It's the opposite of a quick flip," Grafer said. "While there might not be a short-term return, you get a larger long-term return." The companies that make up Satori's $175 million fund all have to meet strict financial and social benchmarks. Grafer said he focuses on ownership, the environment, civic involvement and respectful relationships with customers. A report by Hope Consulting indicates that investors were willing to spend as much as $120 billion on companies that promise social and financial return, if the right product were available. Four social market funds are well on their way to reaching $100 million. And attendance at this year's conference was double what it was when the conference began just three years ago. Organizers say the trend toward socially conscious investing has been spurred by the downturn in the economy. "The traditional market failed," said Kevin Jones, of San Francisco's Good Capital and a conference organizer. "This kind of stuff works without creating a bubble."
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