David Wood outlines the ways government can support private sector impact investing. In some cases, some mandates from the government direct the private sector toward investments with a social benefit.
For example, says Wood, "Green building mandates in large American cities have spurred the development of sustainable property investment strategies, and indirectly supported mission-oriented green developers and investors by increasing the market for their activities."
The private sector is also drawn to impact investing through tax credits and other subsidies and by offering support to the investees with technical help and job training programs so that both sides get the most out of the investment.
And last but not least, there's education.
From Wood, "The creation of the Obama administration’s Office of Social Innovation and Civic Participation (SICP) in 2009 is one such effort. SICP has organized a series of meetings around impact investing with a range of stakeholders, in an effort to build awareness of impact investing and various key aspects of its implementation, such as impact investing and fiduciary duty, the emerging sector of pay-for-performance investments, or the role that philanthropy plays in supporting the field."