AN INCLUSIVE IMPACT INVESTING FRAMEWORK FOR SOCIAL ENTERPRISES: OPTIMIZING PROFITABILITY, SUSTAINABILITY, AND SOCIAL IMPACT

Abstract

Impact investing has emerged as a transformative approach to funding social enterprises, balancing financial returns with measurable social and environmental benefits. However, existing investment frameworks often prioritize either profitability or social responsibility, leaving a gap in comprehensive models that integrate both seamlessly. This study proposes an inclusive impact investing framework that aligns financial sustainability with social and environmental objectives, ensuring long-term value creation for investors and communities alike. Employing a qualitative, literature-based research methodology, the study synthesizes scholarly literature, best practices, and case studies to explore key factors influencing impact investment decisions, including risk assessment, governance structures, scalability, and regulatory considerations. The framework emphasizes innovative financing mechanisms, stakeholder collaboration, and data-driven decision-making to optimize resource allocation and enhance impact measurement. Drawing on globally recognized tools such as the Global Impact Investing Rating System (GIIRS) and Impact Reporting and Investment Standards (IRIS), the framework underscores transparency, accountability, and ethical investment principles to build investor confidence. By bridging the gap between financial markets and social entrepreneurship, the research contributes to a more inclusive and resilient economic ecosystem where profitability and social responsibility coexist in a mutually reinforcing manner, fostering sustainable development and long-term social progress.