The grandson of Walmart Founder, Sam Walton is pledging his time and more than 90% of his endowment fund to Impact Investing.

Lukas Walton has taken his Family Office, Builders Vision, and transformed its philanthropic arm into an Impact Investing machine. Builders Vision which has more than $4BN in AUM has a direct investing arm, asset management unit and endowment fund with the latter now being referred to as an Impact Investing portfolio, focusing on companies, organisations and strategies that prioritise sustainable and equitable solutions.

Walton has made the move as he believes ‘Philanthropy can’t solve the world’s biggest problems, even with government help’. Instead, he said, the biggest issues require investments in innovation, something he and his Family Office already know a thing or two about.

The Family Office has already invested in 80 companies which include the vegan food giant, Beyond Meat and Matter, a UK-based start-up that develops technology solutions for capturing, harvesting and recycling microplastics.

Builders Vision is focused on food, ocean health and energy transition and most passionately believes that purpose and profit are two sides of the same coin. President of the Foundation, Matt Knott said, “profit and purpose are not at odds, quite the opposite” and it symbolises the growing movement amongst the next generation which is Impact Investing and how the impact they make can go far beyond that of a philanthropic donation alone.

While making his mark on the world, Lukas Walton’s direct investing arm is performing in the top quartile of VC firms in terms of returns and he is not alone.

According to the Agreus How to Change The World Report, 59% of Family Office Leaders believe that Impact Investing can make a much bigger impact than Philanthropy alone. The same report found that 45% of Leaders believe Impact Investments will overtake Philanthropy entirely and 38% of Principals have Impact Investing at the top of their agenda.

There is no one-size-fits-all approach to giving and no better strategy, person or organisation to make change. From pure-play cash giving and donations of time or mentorship to making sustainable investments and strategically giving, there are many different methods of making change and for each, there are pros and cons. Something we discuss at length in our How to Change the World report.

While you can download the report to read a comprehensive overview of the ways to make change, the positives and negatives of each and case studies of how each have been implemented and measured along the way, in order to navigate your way through the regulations and requirements for each, we have devised a list of tangible next steps. These are the next steps you can take to starting your journey of making a change:

  • What do you want to give and what do you want to get back?

What may seem like a simple question on the surface is the single most-important task. Deciding what you want to give and defining the change you hope it will create will determine which next step to take.

For instance, if you want to make change but have the constraints of time, a pure cash-giving exercise through an existing structure might be the best option. If however you want to be hands-on and tangibly see the impact you are making while benchmarking a return, Impact Investing might be the logical next step. There is no one structure that works for everyone but your family passions, objectives and resources will lead you to the right structure and a hybrid option as Andra Ilie pointed out is an increasingly popular method of making change.

Answer these questions as a first step:

  • Do you want to give money, time or a combination of both?
  • How much time can you fully commit to the cause?
  • Do you want to be involved on a day-to-day basis?
  • Do you want to see the change you are making?
  • Do you expect anything back?
  • Do you expect social reward or financial return?
  • Are you qualified to deal with the legal matters and trust structures required?
  • Can you implement an Investment Strategy?
  • Do you have the existing network or knowledge to source the right opportunities?

Most importantly: What are your lifetime goals?

  • Speak to other Family Offices.

Peer discussion can be a powerful thing. Information sharing and collaborating to share best practice is a relatively new phenomenon in the world of Family Offices but it is vital, especially when earmarking funds to try and change lives. Practice makes perfect as they say and if you can learn from the mistakes and victories of others, it will guide you and allow you to get a head-start on what can be a lengthy journey. When speaking to other Family Offices try and determine whether your passions are aligned. Co-investments have become hugely popular in a post-pandemic collaborative culture and co-impact investments can introduce you slowly to the new world of investing. Equally, on a philanthropic front, teaming up with other causes can not only allow you to globally mobilise your strategy but it can open doors and routes into Impact Investing at a later stage. Something a Family Office Principal speaks of to great lengths in our report.

  • Who is involved in the journey?

Is this a whole-family journey or an individual passion project?

You need to ensure everyone who you wish to be involved is aligned from the very beginning and made aware of the objectives of the initiative as well as the expectations you have of them in return. You also need to ensure that you have the right resources. In the same way that you would not put an unqualified Chief Executive Officer in the position within your Family Office just because ‘they are family’, you need to ensure your resources on the philanthropic side are both qualified and passionate.

  • Can your resources deal with the legal matters required?
  • Can they prepare reporting and documentation for the Charity Commission?
  • Can they perform due diligence on new opportunities on the Impact side of your initiative?
  • Do they truly care about the causes you are aiming to make change within?
  • Do they understand the mentality of the people you are hoping to help?
  • Do they understand your purpose?
  • Can they quantifiably measure success in line with those objectives?
  • Have they got experience within Philanthropy and/or Impact Investing?
  • Are they motivated by reward or return?
  • Are they aligned with your long-term objectives?

Finding the right talent and structuring them correctly is critical. Employing the right people not only ensures your objectives are brought to life through passionate and dedicated individuals but structuring them correctly ensures they are held accountable to you and the Charity Commission. Something of high importance within a philanthropic strategy.

Download the full report here and find out how many Principals in our network are following a similar path to Lukas Walton by focusing on Impact Investing.