Recent studies show that investments in Africa's economy will only continue to grow, with the region obtaining nearly $83 billion in investments in 2021. And a significant portion of these investments is expected to come from investors looking to make their dollars stretch further so they can help as many people as possible.
Those who plan to give regularly may choose to use a DAF. A DAF is a philanthropic vehicle administered by a public charity. It’s like an investment account dedicated to supporting qualified charities of your choice. Accredited, entrepreneurial-minded givers can contribute to a DAF with the potential of earning a return on their charitable capital. The giver does not keep any returns - ultimately all funds must be donated to a charity, but it can enable the giver’s donation to go further.
DAFs don’t require any account administration on your part.
DAFs enable you to create a lasting legacy by naming family members as successors.
Speak with a trusted advisor to discuss the best investment options for you and your goals.
Charitable Giving vs. Impact Investing in Africa
So, when searching for African companies to invest in, how do you choose what kind of investment to make?
Charitable giving is one way to support causes, but investing in Africa, for example, is different. Impact investing allows you to invest in Africa in a way that makes a positive social or environmental difference while seeking a financial return on investment (ROI).
Giving in the form of a donation is effective for providing basic or urgent needs, especially in light of a crisis. A charitable donation is a one-time gift, and what you give away does not come back. Additionally, it may not always be clear where those dollars are being spent.
Conversely, impact investments may offer a more sustainable, long-term solution. Impact investing aims to empower recipients, helping companies get on their feet instead of relying on outside funding indefinitely. With impact investing, you can invest in socially responsible funds, private companies or lend to nonprofits whose mission align with your values.
When you invest in Africa, you can make a positive impact on people’s lives. Your investment can help fund important initiatives like healthcare, education and poverty relief.
How to Impactfully Invest in Africa
For investors who are not located in Africa, joining an established platform can make it easier to invest.
Renew Capital has been working in Africa for ten years, connecting international investors with high-growth businesses across the continent. We have a deep understanding of the challenges and opportunities that exist in Africa, and we can help you navigate them. Our angel investingexperience is all about helping you find investment opportunities that are making a difference in the world.
If you're interested in learning more about how to invest in Africa with Renew Capital, we invite you to apply to become an angel investor today. We’re happy to answer your questions and discuss your goals – and how you can make an impact.
This blog is for general information purposes only and should not be viewed as investment, tax or legal advice, or as a solicitation of an offer to buy or sell securities or to adopt any particular investment strategy. Impact investing, and investing in frontier markets specifically, is speculative in nature and involves a high degree of risk. The Renew Capital Angels invest in companies located and doing business in sub-Saharan Africa. Investors should understand and be willing and able to handle the risks of investing in such frontier markets, which are more significant than the risks associated with investing in securities of U.S. companies or in other developed countries. Risks include the risk of total loss of an investor’s entire investment. Investors should fully understand all risks and consult with their independent financial, legal and tax advisors to determine whether any particular investment or investment strategy is appropriate for them. Renew Capital does not make any recommendation regarding the appropriateness of any specific investment opportunity for any specific investor, and nothing in this blog should be considered an individualized recommendation or personalized investment advice.