A REVOLUTION IS underway in population health, carrying it far beyond the state and local health departments that are often its overworked and underfunded champions.Among the new practitioners are health systems, insurers, lenders – and a special breed of institutional and individual investors who seek to put private capital and entrepreneurial thinking to work to transform blighted communities into vibrant and healthy ones.

So-called impact investing aims, in part, to remedy past biases in the financial markets, when lenders and investors practiced racial and ethnic discrimination. The Community Reinvestment Act of 1977 sought to end such discrimination, but in many places, much damage was done.

Lisa Richter, a managing partner and co-founder of Los Angeles-based Avivar Capital, is a pioneer in this field, advising investors on how to achieve market-rate returns on investments that enhance health, equity and the environment. She recently spoke with U.S. News about these efforts and the philosophy behind them. The interview has been edited for length and clarity.

How does impact investing differ from traditional investments?

You might think of it as investing to generate social or environmental benefits along with a financial return. The return could be market-rate, such as any investor would seek, along with a social or environmental good, such as building housing units for low-income residents, making it easier for them to get access to public transportation, and lowering the carbon footprint of our transportation system.

Not every one of these investments will generate a market-rate return. Impact investors understand that they may return a slightly below-market rate or involve more risk, but they regard these concessions as worthwhile, because they promote change in communities that in the past couldn’t obtain investment capital needed to start new businesses or sustain them.

Does “underserved” have a different meaning in the world of finance?

Some communities and populations are underserved in the sense that they lack access to traditional capital that most people take for granted – such as home or small-business loans or consumer credit on fair terms. They may also lack financial backing for innovation, to test new solutions to persistent problems.

For example, when the charter schools movement began in the early 1990s, the early innovators couldn’t get financing for their buildings. Impact investors stepped in, making small loans to those schools. Over the decades, that has enabled the charter school model to expand. Charter schools now serve between 5 percent and 10 percent of the U.S. student population, in many cases providing a much higher quality of education to students who wouldn’t otherwise have had access.

How much money are we talking about?

One of every 6 investment dollars in the U.S. has some kind of social or environmental criteria incorporated into the financial decision criteria, meaning that investors take them into account when deciding what initiatives to support. The practice has taken root abroad as well. A recent survey by the Global Impact Investing Network netted responses from 209 firms globally with a total portfolio of $114 billion in impact investments.

In 2016 alone, these firms put $22 billion into investments designed to achieve a social or environmental benefit. They planned to increase that amount to $26 billion in 2017. Two-thirds were seeking the same rate of return they could expect from traditional investments. More than 90 percent of the investments met or exceeded expectations both for their impact and how much money they earned, the survey found.

Read more at U.S. News and World Report