When Money Meets Mission: Rethinking Financial and Social Commitment Alignment in Impact Investing

Abstract

Impact investing seeks to harmonize financial returns with social impact, reflecting investors’ aspirations to support social causes while maintaining profitability. This study scrutinizes this alignment by investigating investor responses when social and financial goals collide, particularly in the context of diversity, equity, and inclusion (DEI). Focusing on investment in women-themed Non-Fungible Tokens (NFTs), we leverage the U.S. Supreme Court’s reversal of Roe v. Wade as an exogenous shock to examine whether investors prioritize DEI-driven social values or financial returns. Analyzing 472,358 transactions on OpenSea from March to December 2022, we find that the market value of women-themed NFTs declined significantly post-ruling, with the sharpest decreases observed in collections explicitly advocating women’s empowerment. Notably, this decline persists even for NFTs tied to real-world advocacy utilities and investors with substantial prior commitments to DEI-related causes. Our findings challenge the presumed synergy between financial motivations and social commitments in impact investing, revealing a dominant preference for financial returns when tensions arise. This study advances the literature on impact investing by disentangling the interplay between financial incentives and social objectives in digital markets.

Keywords: Impact Investing, Diversity, Equity, and Inclusion (DEI), Social Commitment, Investor Behavior, Digital Markets, Non-Fungible Tokens (NFTs), Women’s Empowerment, Financial and Social Trade-Offs