Dick Parsons and Ronald Lauder bring impact investing to sub-Saharan Africa

The duo’s unexpected new chapter: Finding opportunities that offer financial return and do good at the same time (think schools in Kenya, surgery-free circumcision, and a maker of Shea butter).

By Shawn Tully, editor-at-large

FORTUNE — Dick Parsons asserts that the field of ‘impact investing,” putting money into ventures that promote the good of society, doesn’t live up to its name. For the former CEO of Time Warner (TWX) (parent company of Fortune) and chairman of Citigroup, the folks behind that noble-sounding pursuit either simply seek big returns, generating no “impact” on jobs, healthcare or education. Or, they furnish aid under the guise of investing — so they’re really just giving money away. “We’re creating a new definition of ‘impact investing,'” asserts Parsons. “We want a return, but we won’t ignore entities where the return may not be the highest. Then we put on a second filter, assessing what the entity does for the benefit of mankind in Africa.”

If the investments bridge both criteria, says Parsons, “the model will get bigger and bigger and bigger.”

It sounds like a lofty ambition — maybe too lofty. But Parsons is already helping to fund an array of highly creative ventures in a part of the world that’s as bereft of venture capital as its soil is parched, the villages of sub-Saharan Africa. Parson’s partner is Ronald Lauder, the scion of Estee Lauder who served as a top executive at the cosmetics colossus, and pursues big media investments in Eastern Europe. “Ronald and I have been pals for thirty-five years,” says Parsons, who served as personal attorney to his late mother, and is a director of the Estee Lauder Cos. (EL)

SOURCE: CNN Money