Structuring Philanthropic Partnerships, Mission Lock, and Impact Investments

Abstract

This chapter explores how Islamic financial institutions and Muslim businesses may participate in the recently established subsector of responsible markets known as impact investing. More specifically, this chapter considers, in convergence with impact investing, how Islamic and Muslim investors can limit so-called mission risk of their portfolio upon exit, utilizing benefit corporation vehicles may hybridize ethical and profit-seeking goals in parallel with Islamic stakeholder theory and otherwise learning from the precedent of responsible markets, such as the sale of Ben & Jerry’s Ice Cream. In addition, given their charge to eliminate riba and the strong ethic of giving, this chapter recommends institutionalizing partnerships between business and finance with trusts and endowments (waqfs) and other charitable mechanisms to engender social and environmental responsibility.