Contracts with (Social) Benefits: The Implementation of Impact Investing

Contracts with (Social) Benefits: The Implementation of Impact Investing

Christopher Geczy, Jessica Jeffers, David Musto, Anne M. Tucker

Series number :

Serial Number: 

Date posted :

May 07 2020

Last revised :

April 12 2021
SSRN Share


  • impact investing • 
  • contracts • 
  • venture capital • 
  • private equity • 
  • socially responsible investing

We draw on new data and theory to examine how private market contracts adapt to serve multiple goals, particularly the social-benefit goals that impact funds add to their financial goals. Counter to the intuition from multitasking models (Holmstrom and Milgrom, 1991), few impact funds tie compensation directly to impact, and most retain traditional financial incentives.

However, funds contract directly on impact in other ways and adjust aspects of the contracts like governance. In the cross-section of impact funds, those with higher profit goals contract more tightly around both goals.

Published in

Published in: 
Publication Title: 
Journal of Financial Economics (JFE), Forthcoming


Real name:
Christopher Geczy
Real name:
Jessica Jeffers
Real name:
Anne M. Tucker
Real name:
David Musto