Current research on social entrepreneurship and impact investing typically traces the rise of social mission-driven organizing and investing to the 1980s. In doing so, it not only paints an ahistorical picture of socially motivated enterprise, but a decontextualized one as well. It does so because it fails to account for how the changing forms and meaning of such actives reflect shifting social expectations of enterprise more broadly.
This paper addresses this problem by examining how forms of socially oriented finance evolved over the twentieth century, contextualizing these forms within the broader structure of the American financial system. In particular, we examine three waves of investment-oriented social activism during three periods of significant social reform: (a.) limited dividend funds and investment funds that avoided “sin stocks” during the Progressive Era; (b.) shareholder activism during the liberationist movements of the 1960s and 1970s; and (c.) impact investing as a response to neoliberalism and welfare state reform in the late twentieth century. We use annual reports, regulatory records, and the publications of financial journalists to examine the assumptions and values underlying these forms of socially oriented action. Our preliminary findings based in initial research emphasize the way in which contemporary impact investing increasingly treats social mission driven finance as a unique asset class, effectively reenforcing the assumptions of shareholder capitalism.
The paper aims to contribute both to a growing conversation about social entrepreneurship among business historians (Wong and McGovern 2022, Maclean, Shaw, and Harvey, 2022) and to a growing interest in critically examining the contexts and assumptions of social entrepreneurship and impact investing among management researchers (Dacin, Dacin, and Tracey 2011; Ranville and Barros 2021; Mulloth and Rumi, 2022).