Lasting progress in marginalized communities requires more than good intentions. Experts in the field share practical ways to improve funding, accountability, ownership, and access. These insights show how organizations can support solutions shaped by the people they aim to serve.
- Open Pathways to Patient Funding
- Target Benefits for Vulnerable Groups
- Strengthen Fair Credit Infrastructure
- Test Results Before Deployment
- Simplify Impact Disclosure Rules
- Resource Practical Reporting Capacity
- Fund Open Measurement Infrastructure
- Reform Founder Selection Rules
- Design for Last-Mile Use
- Let Communities Define Success
- Tailor Investments to Daily Realities
- Build Resident Asset Ownership
- Expand Economic Agency
- Grant Neighborhoods Decision Rights
- Give Stakeholders Accountability Power
- Redesign Biased Risk Models
- Measure Enduring Social Outcomes
- Ensure Affordable End-User Adoption
- Favor Durable Neighborhood Growth
- Prioritize Depth Over Reach
- Match Commitments to Long-Term Horizons
Open Pathways to Patient Funding
The biggest challenge is making sure capital reaches communities that are usually seen as too risky or too difficult to serve. Impact investors can have good intentions but still favor founders, markets, and projects with easier access to capital. I think the solution starts with defining who should benefit before deciding where to invest. That means measuring outcomes at the community level, not just the financial return or number of people reached. Local organizations and community leaders should also have a voice in how the investment is designed. They understand barriers that may not appear in an investment model. At spectup, I see a similar principle in capital strategy: access to capital depends heavily on how well a business can present its opportunity. Impact investing needs to reduce that access gap rather than simply fund the strongest existing applicants. Patient capital can help where returns take longer to develop. So can smaller initial investments that give underserved founders a chance to build evidence. The goal should be to create pathways into capital, not just measure who managed to reach it.
Niclas Schlopsna, Managing Partner, spectup
Target Benefits for Vulnerable Groups
Most impact funds measure outputs, not distribution. They count jobs created or loans disbursed, but rarely track who specifically captured the benefit and whether the most vulnerable moved up or just watched from the side.
Working across 110 countries with Pageloot, I’ve seen this play out in smaller markets too. A QR code campaign rolls out for a regional health clinic in Southeast Asia, engagement numbers look great, but the rural users the clinic was supposed to reach didn’t have smartphones or data plans. The metric looked healthy. The margin community stayed unreached.
The fix isn’t more measurement. It’s better-specified measurement upfront. Before capital deploys, define which subgroup captures the outcome, set a minimum threshold for that subgroup specifically, and tie fund reporting to that number, not the aggregate.
On the Closer AI side, we built a WhatsApp-based sales and payment agent specifically for emerging markets because smartphone penetration is high but app adoption is low. Meeting people on infrastructure they already use is the most practical version of this principle. If the tool requires behavior change from the marginalized group to access the benefit, the tool is designed for someone else.
Impact investing works when the product or program is built around real access constraints, not assumed ones. Distribution of benefit follows design intent.
Siim Kostabi, CEO, Pageloot
Strengthen Fair Credit Infrastructure
Impact investing is a fascinating space, and I’ll be honest about my vantage point: my expertise centers on consumer debt and financial distress, not institutional investment structuring, so I’ll answer through that lens, which I believe offers a uniquely grounded perspective on this issue.
The key challenge I see repeatedly is that impact investing dollars often flow toward measurable, fundable projects, affordable housing developments, community solar programs, small business loans, while completely bypassing the underlying financial infrastructure marginalized communities actually need most: access to fair, non-predatory credit and genuine financial education. Impact investors love funding visible projects with clean metrics, but the invisible crisis I witness daily in my practice is that marginalized communities remain trapped by predatory lending, exploitative debt collection practices, and credit systems fundamentally not designed with their circumstances in mind, regardless of how many impact dollars flow toward adjacent community development projects.
I’ve represented countless clients in underserved communities who benefited nothing from nearby impact-funded developments because their immediate financial reality involved payday loans charging 400% interest, or debt collectors using aggressive tactics disproportionately targeting communities with less access to legal representation. The impact investment built the community center, but nobody addressed why residents couldn’t build credit or access affordable small-dollar loans without predatory terms.
My proposed solution centers on redirecting a meaningful percentage of impact investing capital specifically toward Community Development Financial Institutions, credit unions, and nonprofit lenders who structurally serve these populations with fair terms, combined with mandatory financial literacy components built into any impact investment targeting economic empowerment. Money without financial infrastructure and education creates dependency on external funding cycles rather than genuine community financial resilience.
Additionally, I’d advocate for impact investors requiring community input and representation in project design, since too often well-intentioned capital gets allocated based on what looks impressive in an annual impact report rather than what communities themselves identify as their most urgent need.
Loretta Kilday, DebtCC Spokesperson, Debt Consolidation Care
Test Results Before Deployment
The biggest challenge is confusing capital deployed with outcomes achieved. A fund or project can be labeled “impact” while the people it is meant to serve see little improvement—or bear costs such as displacement, higher prices or loss of local control. An education-first solution starts with three tests: define the beneficiary outcome in plain language; measure it against a baseline using indicators the community helps choose; and report unintended effects, not only success stories. I would also look for governance that gives affected residents a real voice, transparent fees and a clear explanation of who captures the upside and who carries the risk. Impact claims should be comparable, independently reviewed where practical, and revisited over time. This is a framework for evaluating claims, not a recommendation to buy or sell an investment.
Mehdi Zare CFA, Founder, Bina Capital
Simplify Impact Disclosure Rules
What I see in the practice is that capital tends to go to those enterprises that already had the infrastructure to demonstrate impact, not necessarily to those that are the most impactful.
The reporting on impact requires resources, and those that are closest to the marginalized communities usually don’t have the extra funds or free people to report on their impact, which makes the metrics skewed towards the showy reporting rather than the actual impact.
I believe that the solution to this would be to mandate simpler reporting standards at the point of investment rather than trying to get an extensive consultation from the community. This is a good idea but very hard to fulfill. In case it is easier to demonstrate impact, it will enable more capital to go to the actual impact-generating endeavors, rather than getting tied up in the knots of impact reporting.
Ankit Sarawagi, Curator, CFO Matrix
Resource Practical Reporting Capacity
One overlooked challenge is that we ask small community organizations to prove impact using systems built for larger institutions. We spend valuable time producing reports collecting repeated data instead of serving communities. This shifts limited capacity away from practical work that creates lasting local change. The reporting process should support progress instead of becoming another daily administrative burden.
We should fund measurement as part of every investment not as unpaid compliance. We can accept thoughtful qualitative evidence when it better reflects community experience fairly. We should simplify shared reporting requests and return useful findings to local partners. Better accountability comes from listening carefully supporting honest documentation and respecting local knowledge.
Vaibhav Kakkar, Founder and Group CEO, Digital Web Solutions
Fund Open Measurement Infrastructure
The biggest challenge I see is that impact investing tends to fund *certifications and process compliance* rather than measurable outcomes — and marginalized farming communities get left behind because they can’t afford the certification overhead, even when they’re doing the actual work.
At Pristine America, we built the Pristine Standard specifically to flip this. A score based on what the land and food *produce* — not what inputs you can afford to document. A small farmer in the 100th Meridian corridor shouldn’t lose to a large operation simply because they can’t hire a compliance team.
The concrete fix: structure capital around open data and outcome-based thresholds that any farm can hit. Our Cohort 1 field research gives qualifying landowners the full restoration protocol and independent lab results at *no cost* — the data belongs to them. That’s the model. Make the measurement infrastructure publicly funded so the score is accessible, not just the wealthy.
Marginalized communities don’t lack land or work ethic. They lack the measurement infrastructure that proves their value to premium markets. Fund the measurement, not the paperwork.
Vic Parulkar, Founder, Pristine America
Reform Founder Selection Rules
Most impact funds aren’t all wrong on the big ideas. Where they go wrong is in the execution.
You’ve got the setup: three years of audited financials, a prominent reference, and no small deals. Basically, they’re choosing founders with existing connections. They’re not even asking if the founders know what to do with the cash.
So just to be clear: the presumption shouldn’t be if you know the founder and they seem smart, you’re good.
It should be, if you know the founder, and they know what they’re doing with the cash, you’re good. How do we get there?
First, scrap the halos, ask for real work samples. Take a 90-day operating plan and a unit-economics spreadsheet, run a blind review, and give scores on a fair scale, just like you might for a sales executive. Even if the finalist isn’t rubbing shoulders with the Stanford alumni crowd, they’ll still likely have the best plan. And blind evaluation will reveal that.
Second, embrace reality on the check-size problem. Small funds writing a $25K check isn’t the best use of time and money. Account for that or back community fund managers who understand that already.
It’s the rules that make money go where it does. Let’s change the rules.
Abhishek Shah, Founder, Testlify
Design for Last-Mile Use
The pattern is familiar. Impact gets measured by what is easy to count. So a fund reports how much money it deployed and calls that the result. The question is what changed for a household and that stays invisible in most reports.
Working in online dispute resolution, I’ve realised the fix is to design with the community and measure outcomes people can feel. I would put someone from that community close to the decision, where it carries weight. I would tie a share of returns to a plain, verifiable change on the ground. And I would stay honest when the number is soft, because that is where the real learning sits.
Access is easy to announce and hard to deliver. The teams that get it right treat the last mile as the whole point. Access only counts when that person can use what reached them.
Rajneesh Jaswal, Co-founder, Cadre ODR
Let Communities Define Success
Impact investment starts with understanding the people, not choosing metrics.
Before deciding what to fund or how to measure success, spend time understanding the people affected by the investment. What do they actually need? What barriers already exist? What does a good outcome look like from their perspective, not just ours? What are the things they don’t share on surveys?
From there, define the change you hope to create and choose a few meaningful ways to learn whether it’s happening. Pay attention to who benefits, who doesn’t, and whether the solution creates unintended consequences.
At CauseLabs, we approach this with a human-centered design mindset: listen, learn, test, and adapt. Measurement becomes part of that learning loop, not something added at the end to prove success. The goal isn’t simply to demonstrate impact. It’s to keep learning from the people closest to the problem so the investment can create better outcomes over time.
Sheryle Gillihan, Co-owner, CauseLabs
Tailor Investments to Daily Realities
I’ve spent 30+ years working with dogs across every economic background in the Bay Area — from wealthy Pacific Heights households to scrappy rescue volunteers in East Oakland. That breadth taught me something that applies well beyond dog training: when you design a program without understanding the actual daily reality of the people you’re trying to serve, you waste everyone’s time and resources.
The biggest gap I see in impact investing isn’t funding — it’s assumption. Investors assume marginalized communities will reshape themselves to fit the program. We learned the opposite building our board-and-train offerings: if the structure doesn’t fit the family’s actual schedule, living situation, and communication style, the training fails no matter how good it is.
The fix is ruthless customization before you deploy a single dollar. When we worked with local police departments and Homeland Security on working dog programs, success depended on understanding the specific operational environment first — not retrofitting a generic solution. Impact capital should work the same way: study the specific community’s ecosystem before structuring the investment.
Francis Metcalf, Founder & Co-Owner, Master of Hounds Academy
Build Resident Asset Ownership
One of the biggest risks in impact investing is that the money reaches a marginalized community without the power ever reaching the people who live there. It’s easy to fund a project, count jobs created, slap an impact metric on the deck, and still have outsiders making every important decision and capturing most of the upside. I’d build community voice into the investment itself: local advisory boards with real authority, local hiring and procurement targets, shared ownership where practical, and reporting that tracks who actually gets the economic benefit—not just how many people were “served.” Investors should also ask an uncomfortable question upfront: if this project succeeds wildly, who owns the appreciating asset five or ten years from now? Otherwise, impact investing can accidentally become gentrification with better branding. The goal shouldn’t just be deploying capital into underserved communities; it should be helping those communities accumulate assets, influence, and staying power.
Justin Belmont, Founder & CEO, Prose
Expand Economic Agency
One of the biggest challenges in impact investing is ensuring that capital actually reaches marginalized communities rather than being concentrated in businesses and markets that are easier for investors to access. The impact investing market has grown to an estimated $1.571 trillion globally, yet significant gaps remain in directing capital toward populations with limited access to finance, infrastructure, and economic opportunity. The Global Impact Investing Network’s 2024 research also highlights how impact capital remains unevenly distributed geographically, particularly between developed and emerging markets.
The solution requires moving beyond simply measuring how much capital is invested and focusing more closely on who benefits. Investors should involve community representatives in investment decisions, use impact metrics that track outcomes at the grassroots level, and consider blended-finance structures that reduce the perceived risk of underserved markets. Building local entrepreneurial and workforce capabilities is equally important because capital alone cannot create sustainable economic mobility. From a leadership and skills-development perspective, investment becomes far more meaningful when communities gain the knowledge, capabilities, and access needed to participate in and benefit from the economic opportunities being created. The real measure of impact should therefore be whether investment expands agency, opportunity, and long-term resilience among the people it intends to serve.
Arvind Rongala, CEO, Invensis Learning
Grant Neighborhoods Decision Rights
We often mistake community participation for real decision making in impact investing too easily. We use listening sessions and surveys to understand local views before investing with care. We still need residents to influence pricing hiring land use and future choices directly. We create trust when authority matches the voices we invite into the process together.
We support governance rights that continue after early discussions end with clarity for everyone. We give community representatives voting seats and clear access to performance information every year. We also let residents pause decisions that could cause clear and lasting harm early. We build shared ownership because stronger local influence supports fair growth and lasting confidence.
Christopher Pappas, Founder, eLearning Industry Inc
Give Stakeholders Accountability Power
One key challenge is that investors often define impact from the capital side, while communities experience the trade-offs locally. A project may report jobs or customers served yet still worsen affordability, exclude informal workers or shift risk onto residents. I would require affected communities to help set the success measures before investment. They should also receive disaggregated results, a funded grievance channel and a formal review before follow-on capital. Consultation gathers opinions, but decision rights make the investor answerable when the promised benefit does not reach the intended people.
Hasan Can Soygök, Founder, Remotify
Redesign Biased Risk Models
Risk models can repeat the same inequities that impact investing hopes to solve. We often treat thin credit files informal income and underinvested neighborhoods as warning signs instead of proof that people faced limited financial opportunity. That approach turns historic exclusion into higher costs for the communities seeking support. We believe fair investing begins with recognizing the system behind the risk.
We separate household challenges from institutional design choices before pricing any investment. This helps us respond to barriers with better structures instead of heavier burdens. We use guarantees first loss support and flexible repayment terms to reduce pressure. We should also publish pricing differences across groups because transparency builds stronger trust and accountability.
Brian Lebeau, CEO, Attic Projects Company
Measure Enduring Social Outcomes
The main challenge in impact investing for marginalized populations is the practice of giving too much importance to quantifiable vanity metrics at the expense of qualitative nuances of systemic change. There are instances in financing strategies and technological operations where capital is based on thin data such as registrations on the platform, and transaction volume while skipping the real social impact taking place. This leads to a misalignment between reported success of the investor and actual experience of the community. The measurement of success based solely on the rates of user adoption neglects the quality of the intervention and the long-term economic viability it brings to its beneficiaries.
To close this gap, investors should start applying a model similar to that of the modified Balanced Scorecard which treats social outputs with the same measurement precision as financial balance sheets do. As an experienced practitioner of large scale delivery model and financial operations, I can see that the reality of true impact is defined through three lens: financial sustainability, operational efficiency, and depths of social outcomes. In this interpretation, it is necessary to move away from obvious headcount towards longitudinal data that reflects the stability and wealth created by the community. If the funded technology or infrastructure does not have a data architecture for obtaining qualitative feedback from the ground, the investment will turn into a show for the stakeholders.
In this respect, it is necessary to combine financial discipline and human-oriented reporting. We need to stop mistaking the data on the volume of activities with the data on the impact. By reflecting qualitative social indicators in the financial report we contribute to making sure that the capital is not only delivered to marginalized community but that it also performs its function of bridging the economic gaps.
Abhishek Pareek, Founder & Director, Coders.dev
Ensure Affordable End-User Adoption
The true test of impact investing is not whether a solution is funded, but whether the people for whom it was intended can TRULY AFFORD to use it. Wheelchair ramps can help people stay independent, but the families who most need them may not be able to afford the installation costs.
Investors should consider how many people can actually use and maintain what they fund. This entails consulting with families prior to making an investment, collaborating with neighborhood groups, and taking into account financial aid or programs for affordable rentals. Additionally, I would keep track of the end user’s overall expenses, including installation and upkeep. That provides much more information about the true impact of the investment.
Susan Hackett, Vice President of Operations, Williams Lifts
Favor Durable Neighborhood Growth
Capital often arrives with growth expectations that do not fit neighborhoods recovering from disinvestment. We have seen rapid expansion push businesses to hire before steady demand exists locally. We also see rising rents make everyday services harder for nearby residents to afford. Businesses can appear strong in investor reports while becoming less accessible to their communities.
We believe growth should support durability instead of speed alone in practice every time. Better investment agreements should measure affordability service continuity local job quality and resident access. We can support slower expansion when it protects trust and long term community value. This approach lets local demand guide progress without losing the purpose behind the business.
Todd Harmon, Founder & Owner, BathGems
Prioritize Depth Over Reach
The challenge I keep bumping into: impact capital optimizes for reach, because reach is easy to count. How many people did you touch, how many units shipped, how many downloads. It fits neatly in a report to investors. And it’s almost beside the point.
Reach is the vanity metric of impact investing. Getting a product into a marginalized community’s hands isn’t the finish line — it’s barely the starting line. A tool can be free and technically “accessible” and still be useless to the exact person it was built for, because nobody from that community was in the room when it got designed. You end up with impressive reach numbers, shallow results, and capital that feels well spent while very little actually changes.
The fix isn’t complicated, it’s just uncomfortable for a spreadsheet. Fund depth over breadth. Prove the thing genuinely worked for one person before celebrating that it reached a thousand. Weight founders who’ve actually lived the problem — they build the unglamorous details that make a solution usable. And accept slower, fuzzier proof, because real outcomes in these communities rarely resolve inside a quarterly cycle.
Serve fewer people properly and you’ll do more good than reaching everyone thinly.
Derek Wild, CEO & Founder, Listening.com
Match Commitments to Long-Term Horizons
Short investment timelines remain a major obstacle for marginalized communities today. We often expect lasting change to appear quickly after years of underinvestment and exclusion. That pressure favors visible projects over slower work like leadership growth, trust building, and stronger local institutions. When funding ends too soon communities are left carrying responsibility without enough support to continue progress.
We should match investment timelines with the change we hope to create. Longer commitments should include flexible funding and renewal choices shaped by community feedback. We also need clear plans that prepare local leaders to guide future progress. Stronger relationships, shared leadership, and greater resident participation deserve recognition as meaningful signs of lasting impact.
Mark Bietz, CMO, Halloween Costumes
