by Maggie Fried, Haas MBA Class of 2019
When I started at Haas a year and a half ago, I had just been introduced to the idea of impact investing. All I knew was that it was possible to invest for social impact and a financial return and it seemed as though it was the “perfect” way to drive social change. Flash forward to the second semester of my second year at Haas, and I am one of two Student Coalition Delegates representing Haas at the Sorenson Impact Conference in Salt Lake City, which mainly focuses on impact investing. Thanks to several programs and courses at Haas, as well as internships over the school year and summer, I have spent the past year and a half exploring impact investing. Over the course of the conference there were deep discussions with other conference participants about impact investing — spending lunch in conversation about using debt to fund fintech start-ups, and hanging around after a session, engrossed in a discussion about how Mission Related Investments (MRIs) are being used by a growing number of foundations. After these conversations, I was often taken aback by the transformation I saw in myself. I started at Haas only understanding the basic premise of impact investing and was now sharing opinions and asking questions based on research and experience in the space. After returning from the conference, I met with my first boss, who was visiting the Bay Area. More and more, she has turned to me for ideas of how the organization where she works can utilize impact investing to advance its mission. I shared with her a new approach to impact investing that I learned about at the conference, Opportunity Zones, while comparing it to other forms of impact investing. We discussed the ways in which it might not be a strategic fit for her organization. Again, I was struck by how my knowledge of impact investing has blossomed while at Haas, and how empowered I feel by the confidence I now feel when sharing this knowledge.
The conversation with my former boss about why impact investing might not be right for her organization highlighted an internal struggle I’ve often found myself grappling with over the past few months. Last semester I was lucky enough to take Robert Reich’s course “The Political Economy of Inequality” at the Goldman School of Public Policy, and from it, gained a deeper understanding of how policies in the U.S. have previously and continue to create and reinforce inequality. Reading Anand Giridharadas’ Winners Take All: The Elite Charade of Changing the World over winter break allowed me to examine the themes of Reich’s class within the context of social impact initiatives. Giridharadas argues that practices such as impact investing attempt to help those impacted by inequality while not changing the system that led to it in the first place. Further, he argues, approaches like impact investing actually reinforce the system that benefits those who have amassed wealth and power. It was through the lens of Reich’s course and Giridharadas’ book that I listened to the content at the conference. Are Opportunity Zones, a tax incentive for the wealthy aimed at spurring economic development in economically distressed communities, really the answer for poorer communities? Why do the wealthy need to benefit? Why discuss Revenue Sharing Agreements as an approach to student debt instead of focusing on reducing the rising cost of secondary education? Despite my excitement of having learned so much about impact investing, I was troubled by the nagging thought that perhaps it wasn’t the perfect solution after all.
Learning about an approach to social impact, becoming passionate about it, and then questioning the very foundation of that approach is deeply unsettling. Yet, at the conference I found I wasn’t alone. In the keynote address that opened the conference, Mayor Michael Stubbs of Stockton, California told the packed room of impact investors that “charity is not justice, impact investing is not justice” while arguing for the need to change the systems that have led to persistent economic inequality. In a mainstage session on race equity and impact investing, one of the panelists challenged the audience to question whether market-rate returns for investors are really necessary when the goal is to reduce wealth inequality. Credit to the conference organizers for bringing in speakers who could highlight the many benefits of impact investing while also discussing the shortfalls, but by the end of the conference, I was unsure whether my passion for impact investing was misplaced.
I came to Haas discouraged about the ability of the traditional non-profit model to create sustainable impact and seeking the perfect tool for social change. However, while at Haas I haven’t just learned the ins and outs of impact investing, I’ve also been encouraged to “Question the Status Quo.” What I realized after attending the Sorenson Conference is that doesn’t mean abandoning the status quo because it isn’t perfect. It means telling my former boss that there are some impact investing tools that advance her organization’s mission, but that the approaches seeking market rate returns might actually negate the impact her organization strives to achieve on inequality. It means like so many of the inspiring people I heard from and spoke with at the Sorenson Conference, dedicating time and energy to understanding the tools available in the status quo, and then encouraging those around you to challenge and improve those very tools. This is perhaps the biggest lesson I’ve learned in my exploration of impact investing –there is no one perfect tool for social change, there is not one approach that we cannot continue to question and improve, and impact investing is no different.