This blog post was originally posted on March 14, 2019.
Kresge’s Social Investment Practice typically makes multi-million-dollar investments that both further our goals to expand opportunity for low-income people in America’s cities and return capital to the foundation to be recycled for another social purpose.
But our team also makes grants, and in 2018, we granted money to Net Impact to support its inaugural Impact Investing and Diversity Fellowship program. We funded this program because Kresge has a commitment to racial equity, and we see that the world of impact investing professionals is not as reflective of the communities we’re trying to serve as we’d like it to be.
It’s little help that there’s no common route to becoming a social impact investor. Given the relative nascency of our field, people come to this work from a variety of places. We can see this on our own team, which is made up of people who worked for a community development financial institution (CDFI), a bank, a tax credit syndicator, a financial services company and as a consultant to other impact investors. Our degrees are in law, public policy, organizational development, philosophy and even writing and rhetoric! Not one of us started our careers knowing we’d wind up at Kresge, investing $350 million through debt, equity investments, and guarantees.
For under-represented or low-income people who want to explore this career on social impact and impact investing, there are other barriers to navigate. For example, there is unequal access to our higher education system, where you could start to explore the fundamentals of a career in finance. Also, most banking products and services are not created with low-income clients in mind. And, because the products that do cater to this community can be exploitive in nature, this relationship rarely carries a positive connotation.
Finally, there is often a prevailing belief that investing is not for the everyday person, but exclusively for the wealthy. Money, simply put, can feel out of reach. It’s hard to dream of a career where you would have access to invest millions toward social change if you simply cannot conceive that the financial markets can be a tool for social good.
We believe this fellowship program can help to overcome these barriers and contribute to the creation of a more diverse talent pipeline for our field. And we want more young people of all backgrounds to imagine a career in impact investing. I get asked often for advice on how to get started and was honored to have the opportunity to speak with the fellows on this very topic. Here are five things I share when that question pops up:
1. Study up on the fundamentals of capital. You need to understand how money works. You can approach this learning through coursework in economics, finance, accounting or business. It will always be necessary to know the basics of how capital flows.
2. No need to worry about being a math genius. You don’t have to be good at math – really! I don’t do calculus in my job. The most complicated math I do is various forms of arithmetic – e.g. calculating interest rates or changes in revenues or expenses over time; all things you can do on a (non-scientific) calculator.
3. The numbers tell a story, and your job is to find it. While calculus isn’t essential, this is. You must be able to look at a balance sheet and an income/profit and loss statement and understand the underlying financial story of that nonprofit or business. This is the beginning of your analysis on an investment opportunity. Certainly, impact investing has a qualitative component, in that we’re always thinking about the social impact outcomes we want to achieve. However, we do not skimp on the rigor involved in the financial analysis. And, as a bit of a numbers geek, I love this part of the job!
4. Seek out the sector that is meaningful to you. There are a lot of ways to do good in the world and make an impact. So, pick an area you love – whether that’s housing, food, education, water, climate, sustainability, sustainable agriculture, orsomething else. Investing for impact crosses most sectors. Having an authentic connection to an area of interest will make the work more enjoyable and fulfilling and, if you build up a bank of knowledge in that area, it will also make you more marketable.
5. Finally, get your feet wet through on-the-ground internships or early-career jobs. CDFIs are great places to learn (I spent ten years of my career at a one!) You could also explore a bank credit training program. Or, does your local community bank, CPA firm, or the accounting department of a local nonprofit offer an internship? See where you can learn how capital flows in the real world.
The bottom line is the impact investing field needs people of all backgrounds to participate and contribute to investment decisions that will best serve communities that the mainstream capital markets tend to overlook. And, I’m excited to see what contributions this first class of Impact Investing and Diversity fellows will make toward this goal!
Kim Dempsey serves as deputy director of the foundation’s Social Investment Practice. Follow the team’s work on Twitter @kresgesocinv.
Net Impact is saddened to announce that Jim Schorr, a Net Impact founder and former Board Chair, passed away on February 11, 2019.
Jim was a transformational leader in the social impact field. As an MBA student at Northwestern University, he joined other MBAs and members of the Social Venture Network to found Net Impact. Later, he served as a director and board chair for ten years, and the organization grew to inspire tens of thousands of students and young professionals across the globe.
Throughout his career, Jim was a leading expert in social entrepreneurship, including as CEO of San Francisco-based Juma Ventures, which creates job opportunities for disadvantaged youth, as well as CEO and Chair of the Social Enterprise Alliance in Nashville, TN. Teaching at UC Berkeley, Jim found his true passion—helping to ensure the next generation experiences, learns, and ventures into social enterprise.
In 2009, he moved to Nashville to start the social entrepreneurship program at Vanderbilt University where he was a professor at the Owen Graduate School of Management and Peabody School of Education. At both Berkeley and Vanderbilt, Jim taught hundreds of students and helped to shape their future careers and our future world.
Those in the Net Impact community members who knew Jim recollect his kindness, generosity, sense of humor, and sharp mind. For those who never got a chance to meet him, he embodied the very best of Net Impact. Jim has made an indelible impact on the lives of many.
A memorial for Jim will be held on Saturday, March 16, 2019 at 11 am at Benton Chapel at Vanderbilt University, with a reception to follow at Vanderbilt's Owen Graduate School of Management. Contributions the student funds created in his memory for young social entrepreneurs to continue his work can be found at JimSchorrMemorial.com.
The Net Impact Owerri Chapter exemplifies the belief in the power of networks and connecting individuals to create positive change. Its affiliated nonprofit, Eternal Hope Global Foundation (EHGF), is dedicated to “protecting, educating and empowering vulnerable people, in order to encourage and maintain well-being and economic growth, advanced health researches/innovation and sustainable development,” according to Chapter President and founder Chinadindu Godwin. Godwin believes that organizing events and projects to “do something for a good cause” is an “opportunity for giving, connecting and having fun” and bringing people together within the local communities, all while creating positive impact for local communities.
According to the World Health Organization 2017 World Malaria Report, Nigeria accounted for the highest proportion of malaria cases and deaths globally. To address this critical issue, the EHGF recently organized and hosted an event that provided free malaria testing and treatment for children, adults and the elderly, and supplied free mosquito nets for malaria prevention. In addition to giving the necessary materials needed for malaria prevention, the Owerri Chapter provided food for hungry, underserved individuals. There are plans to continue hosting this event as often as possible.
Another major project that EGHF is facilitating is the Skills Acquisition program, “aimed at engaging and empowering youth through training them on skills” from mechanics and carpentry to hairdressing and makeup. Program goals include reducing unemployment and creating job opportunities, taking kids off the street, and fighting poverty. They hope to have this program reach at least one youth from every Local Government Area in the thirty-six states of Nigeria, starting with the Imo state, where they have involved twenty-seven youth members, one from each of the twenty-seven Local Government Areas in Imo.
With hopes of growing their network, connecting communities, and positively impacting individuals, the Owerri Professional Chapter is planning to host several more programs and events in the coming months.
If you are interested in learning more about the Owerri Professional Chapter and Eternal Hope Global Foundation, you can visit their Chapter microsite.
A message from Net Impact’s departing CEO, Liz Maw
When I joined Net Impact as CEO in October 2004, George W. Bush was about to win his second term as President. Lord of the Rings had won Best Picture from the Academy. And Tom Brady had recently led his team to a Super Bowl victory. Some things never change!
At that time, Net Impact had just a couple of staff members, and its 90 chapters existed primarily at MBA programs. As a former chapter leader, I was full of optimism about Net Impact’s potential and thrilled to have the opportunity to further inspire and equip our community to change the world.
Fast forward 14 plus years to today. I look back and am so amazed at what the Net Impact community has accomplished, with 400+ chapters and tens of thousands of members globally. The impressive current and former Net Impact staff; our dedicated board and advisors; our generous funders and supporters; our outstanding chapter leaders; and all of our community members individually make an immeasurable impact, and collectively transformed both Net Impact and the world. At the highest level, Net Impacters have:
Dramatically increased the social & environmental offerings at their universities. Our student chapters, whether at MBA programs, undergraduate programs, or graduate programs in diverse fields like engineering or policy, demanded new courses, extracurriculars, and career services in a way that fundamentally changed academic programs all over the globe.
Moved corporate sustainability from fringe to mainstream in companies large and small. Today, companies recognize the strategic importance of sustainability for their growth and success, and Net Impact members have helped lead the way through their advocacy, pragmatic idealism, and demonstrated success.
Catalyzed tens of thousands of purpose-driven professionals to launch new ventures, lead social sector organizations, and drive transformational partnerships. Our programs, chapters, and events inspire and equip an army of talented changemakers who have taken the social impact field by storm.
Looking inside our community, we have changed Net Impact from a small and more homogenous network to a more diverse, interdisciplinary, and inclusive community. We have focused on welcoming new kinds of chapters to our community, starting with associates and bachelor degrees and including a range of graduate programs like engineering and design. We also launched new professional and corporate chapters in diverse locations, everywhere from small towns in Africa to the conference rooms of Fortune 500 companies.
Looking forward, what is next for our organization and community? Net Impact’s current strategy will focus on keeping our alumni more engaged; improving our programs and leadership experiences to better develop our members’ leadership skills, and building a more diverse and connected chapter network. We will hold a world-class conference in Detroit in October 2019, and we will develop innovative new programs for our chapters and partners.
And most importantly, as we have done since we were first founded by a small group of students and advisors back in 1993, we will continue to support local communities of changemakers with big ideas, big talents, and big hearts. As Margaret Mead said, “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has.”
Net Impact community–you’re changing the world every day, and I am inspired and humbled by your extraordinary accomplishments. Thank you for the opportunity to serve.
Liz Maw served as a Net Impact chapter leader between 1999 and 2003, and as Net Impact CEO from 2004 to early 2019.
Liz with University of Michigan chapter members in 2015
University of Toronto Rotman School of Management is a leading Canadian business school with a strong international flair. Early-career business professionals from around the world flock to Rotman to study business, management, finance, and analytics. Increasingly, they’re focused on learning how to build sustainable businesses that create positive social impacts.
It’s no surprise, then, that Rotman features a thriving Net Impact chapter with more than 100 active members and a leadership team that hails from six countries. Rotman was named International Student Net Impact Chapter of the Year for 2018.
Rotman Net Impact presented more than a dozen events and activities in 2018, including the first Sustainability and Energy Industry Night with local professionals from the worlds of consulting, energy, social ventures, private equity, and clean tech.
The chapter hosted two case competitions: the first Accounting for Sustainability (A4S) International Case Competition; and a qualifying round of the Hult Prize competition. They also put together a team to participate in the MBA Impact Investing Network and Training (MIINT). Next year will be even busier for Rotman Net Impact with the addition of the first Rotman Sustainability Conference, a day-long gathering of sustainability professionals and students to discuss impact ideas and careers in energy, finance, asset management, healthcare, and entrepreneurship.
Kiel Guerrero is the chapter’s Vice President for Careers and chief organizer of the inaugural Sustainability Conference. He’s focused on a career in renewable energy, but through his involvement in Net Impact, he sees just how broad the sustainability movement is. A 2018 survey of Rotman Net Impact members showed a focus on tackling today’s social and business problems from every angle: through consulting, social innovation, impact investing, corporate sustainability practices, clean energy, sustainable development, and improving racial and gender equality.
Guerrero credits his involvement with Rotman Net Impact for helping him take his leadership skills to the next level. His friends looked to him as a leader, but he felt uncertain and insecure. It was a leap for him to step up and lead the team organizing the Rotman Sustainability Conference, but doing so has shown him his capacity to make change happen.
Kellogg Net Impact is the umbrella organization for all social impact groups on campus and an advisor to a growing social impact movement among Northwestern’s undergraduate students. Chapter Co-President Sahar Jamal estimates that 75 percent of Kellogg students engage in social impact activity each year; for example, by attending a Kellogg Net Impact event consulting for a Chicago-area nonprofit organization, or taking one of 30 courses in the social impact curriculum.
Like many other business school Net Impact Chapters this year, Kellogg hosted an impact investing case competition and sponsored speakers from the social impact world. The CEO of Tommy Hilfiger’s fashion company spoke to Kellogg students about designing clothes for people with disabilities, a large and underserved market.
But Kellogg Net Impact went a giant step further. Over the summer, a chapter team traveled to Nairobi, Kenya to work with SunCulture, a company that sells affordable solar-powered water pumps and drip irrigation systems to low-acreage farmers. The Kellogg Net Impact members helped SunCulture develops a crowdfunding platform to raise money for farmers.
Chapter Co-President Lauren Levine says that the events and activities are only one part of what makes Kellogg Net Impact so important to her business school experience. It’s an inspiration to connect with others who are smart, capable, passionate, and ready to lead, Levine told me.
Both Jamal and Levine said that their involvement with Kellogg Net Impact had significantly deepened their understanding of social impact and how to pursue real change in their careers. After her own visit to Kenya over the summer to work with a healthcare organization, Jamal switched career tracks entirely and is now working to build her own health-related company.
As they get ready to graduate from Kellogg in the spring, Levine and Jamal have high hopes for a groundbreaking project the Chapter’s been working on for some time: a student-run impact investing fund. The goal is not only to give Kellogg students hands-on experience working in impact investing but to broaden the scope of a traditional impact investing fun to specifically include investors of color who are interested in funding entrepreneurs of color.