There is something profound about discussing familiar concepts with unfamiliar audiences that focuses the mind and can open the door to unanticipated clarity. I was reminded of this on a recent tour of India and Thailand, where I collaborated with the Asian Venture Philanthropy Network (AVPN)—and, in one instance, Professor Muhammad Yunus—on a series of presentations, workshops and meetings with government officials, private investors, and social sector leaders about investing private capital for social impact.

At issue was the broad and highly dynamic space situated between traditional philanthropy and conventional financial investment. In recent years, this area has been of intense interest to a wide variety of people who control significant funds and want to invest to improve their societies. This phenomenon has been especially apparent in the developing world, where philanthropic resources and traditions are comparatively limited.

The discussions on the tour reflected this hunger for information and ideas on the most productive ways "social investors" can put their money to work. They also exposed two basic truths likely to influence how this arena of investing develops, and whether it approaches its full potential for social impact.

First, we are in urgent need of clear, precise ways to think and talk about this space, beginning with what to call it. Indeed, as the discussions unfolded, the biggest language gap wasn't between speakers of English and Hindi or Thai, but between those who have and have not already become inured to the field's battalion of alluring phrases seeking unambiguous definitions—e.g. social investment, social enterprise, social innovation and (most vexing of all) impact investing. For now, I'll call this space "investing for social impact," since that is a very accurate description of what it's all about.

But the language difficulties are interwoven with a more serious problem: lack of a robust segmentation of this marketplace. At present we have no clear, commonly accepted framework that establishes meaningful categories of investor groups and organization types to which precise terms might be attached. Without this, we simply do not have an effective platform for constructive analysis, planning or action.

The need to communicate with my Asian audiences drove me to seek a simple, intuitive solution that could at least serve as a strong first step. Indeed, this space can be boiled down to four basic segments defined along two critical dimensions: accountability for social impact and expected rate of financial return on investment.

Moving from traditional philanthropy toward conventional financial investment, the segments can be sequenced as follows:

• Segment A: accountable primarily for social impact, with no expected financial return to investors or donors—it's purely a donation (the typical setting for "venture philanthropy");
• Segment B: accountable primarily for social impact, but able to support some expected financial return to investors, generally below the risk-adjusted market rate (included within "impact investing", referred to as "social investing" in the UK);
• Segment C: accountable primarily for delivering a risk-adjusted market-rate financial return, but with explicit goals for a concrete and significant social return (also considered "impact investing");
• Segment D: accountable primarily for delivering market-rate financial returns, but subject to less-specific or less-ambitious targets for the achievement of positive social outcomes or avoidance of negative ones (often referred to as socially-responsible investing).

While there are other ways to attack this challenge, these segments work, insofar as they directly relate to the kinds of decisions that investors, practitioners, policymakers and others make—which leads to the second truth: Once we've agreed to a robust segmentation, we should focus our best energies on realizing the social impact that each segment has the potential to generate, rather than unproductive conceptual debates. This means helping organizations in each segment to strengthen the core activities—programs, products or services—that actually cause positive social outcomes and to develop sound financial models with the most sustainable revenue sources.

It also means helping the ever-expanding global pool of investors eager to increase the social productivity of their capital (including those I met in India and Thailand) to get the information and tools they need to clarify their aims and to engage with the organizations best able to deliver the social and financial returns they aspire to achieve.

And, yes, it also means not getting bogged down by valid but distracting questions—such as whether impact investors can reliably achieve market rate financial returns without compromising social impact—and directly confronting the practical realities of this space, especially with so many "social" investors being new to the market. For example, the fact is that not every social-purpose organization with a strong impact model has the ability to generate significant earned revenues. Fortunately, it's also true that many sophisticated social investors are willing, even eager, to give away their hard-earned money to support such organizations. And it's a fact that many for-profit organizations and investors will be unwilling to hold themselves equally accountable for social and financial returns; but that doesn't mean they will not authentically seek—and be able to achieve—noteworthy social outcomes or at least embrace productive, sustainable standards and practices.

So, as I continue to reflect on this paradigm-shifting Asian tour, what looms as the most impressive "truth" of all is the enormity of the opportunity we have to improve our world by leveraging the aspiration of investors across all these segments to deploy their capital for greater social impact. Time to get to work.