MBA Masterclass Impact Measurement for Entrepreneurs and Impact Investors

Kara Northcutt: Great, looks like everybody for the most part has joined, so we'll go ahead and get started. Good morning, good evening, good afternoon, depending on where you are. We have people from all over the world so we really appreciate you taking this next hour and a half to really get some insight into impact investing and Chicago Booth as a whole. My name is Kara Northcutt. I'm a Senior Director of Employer Engagement and Admissions for Chicago Booth. I have been at Booth a little over 12 years now, I'm very, very proud of that. And on behalf of the executive, full-time, evening and weekend admissions teams, thrilled to welcome you to this Masterclass called impact, excuse me, Impact Measurement for Entrepreneurs and Impact Investors with Professor Christina Hachikian. So as I mentioned at the beginning, feel free throughout to pose any questions for Christina through the Q&A. And then after the presentation, like the last 20, 30 minutes, I will verbalize those questions, that sort of thing. So feel free to post throughout in case you have something you don't wanna forget. Again, use the Q&A. And so today you will get to experience two key components of the Chicago Approach to business education. Our data-driven and evidence-based approach really helps you learn how to ask the right questions, think more strategically and analytically. And this really prepares you and gives you the confidence to take on the business challenges of today and tomorrow. Another key advantage of Booth's MBA programs are supportive and collaborative community. At Booth, you join a group of current students, alumni, administrators that will all be there for you throughout your MBA and beyond. And of course, an integral part of that community is our faculty. That's exactly what you're gonna experience today. The same faculty do teach across all MBA programs and we all teach from the same methodology that we call the Chicago Approach to business education. So I'm excited for you again to get that experience today. So Professor Christina Hachikian is Clinical Associate Professor of Strategic Management. She teaches several of Booth's social impact courses, focusing on topics including scaling social innovation and social enterprise strategy. She also serves as a coach for the John Edwardson, excuse me, Social New Venture Challenge. This is one of our annual business plan competitions that focuses on non-profit or so mission-driven sort of startups. Christina has really deep experience and ties in the social sector. She was the founding executive director of Booth's Rustandy Center for Social Sector Innovation and during her eight-year tenure, she was integral in some very large fundraising that has helped fund that center and all the great work that they do; has built a team of more than 20 people operating in Chicago, Hong Kong and London dedicating to advancing research in developing the people and practices that will accelerate social change. Before Booth, Christina was Vice President and Head of Investor Relations in Corporate Development for Cole Taylor Bank. And before that, she was also an assistant vice president at ShoreBank -- which is now known as Urban Partnership Bank, a triple-bottom-line community development bank. She's also served on boards and volunteers for a variety of different organizations around the area. And in 2020, Christina was appointed to the Governor's Commission on Equitable Early Childhood Education and Care Funding. These are just a few of the many things that Christina has accomplished thus far in her career. So with that, I will turn it over to Christina and you'll be able to get to know her and learn all about impact investing. Thank you so much. Thanks, Christina.

Christina Hachikian: Kara. Well, welcome everybody. I'm really excited to see all of you here. I wish I could see. You see me, I don't get to see you; I'd love to be able to see you. I think one of the hardest parts of the pandemic is not getting a chance to interact much person-to-person with the students who are thinking about Booth, an organization that I went to. I went to Booth as an MBA student in the early 2000s and then I came back in 2012 to help launch what is now known as the Rustandy Center, and also started teaching; I have been teaching for about the last eight years and just recently made a leap, just from administrating and teaching to just teaching, so I'm excited about that. So welcome. We're gonna talk a little bit about impact measurement for entrepreneurs today. And in fact, I'm gonna end the polling and share the results. And I think, you know, we have -- clearly the folks that have come to tonight are really interested, you know, not just in the approach we take but really in, I think in the content, right? There's many of you are interested in being social entrepreneurs, starting a social venture, and also being on the funding side -- thinking about funding via impact investments and impact finance. So I'm excited about, excited about what I am gonna share with you tonight. OK. So we're gonna jump to another poll and I wanna hear what you think about this question. What are the top three greatest challenges facing impact investing over the next five years? Think up to three. Especially as you think about, you know, you're all, many of you out there are thinking about being impact investors. Love to know what you think you're gonna be facing in terms of challenges. Well, this is interesting. You guys don't get to see, you're all learning. It's very fun to watch the numbers move around. So then just another maybe 30 seconds, let more people jump in. Thinking a little bit about what the challenges are -- this is next five years, not forever, but the next five years -- to really grow the impact investing market. OK. Oh, the numbers are moving up so fast. I'm gonna give it one more second. This is good stuff. OK. Slow down here. So I'm gonna share these results. So interestingly: This idea of the "winner," quote unquote, was the inability to demonstrate financial results. So this is an idea that, you know, impact investing, we wanna be able to see those financial results come through in the investments we make. Some competition, some risk that the industry doesn't make progress against social environmental challenges, and the inability to demonstrate impact results. Those kind of being the next two. So this is what the industry said was the biggest challenges. So impact washing did not make the top list from your perspective. But in fact when polled, the major funds -- the major impact investing funds -- reported ... this is from the Annual Impact Investor Survey that's put out each year by the Global Impact Investing Network or GIIN. And in fact, one of the things that's happening, I mean, if you read anything about impact investing, if you sort of stay up on the blogs and whatever, you find that this has been the big topic of conversation among impact investors. They're increasingly focused on the impact part of impact investing and really see it as a critical path to actually growing the field. I think there's a lot of concern. And you see just how sort of set apart impact washing is as a concern and just, you know, really thinking about many of these other -- in fact, the second, third, fourth, fifth, and I think seventh, no, eighth -- are all about impact measurement, right? Thinking about ways in which we need to be able to demonstrate our impact results. But impact washing -- this idea that we might sort of gloss over and not actually have real depth to our impact -- is clearly the biggest challenge people see for growing the market. So this is what we're gonna talk about tonight and we're gonna talk about it both from the entrepreneur side and from the impact investor side. And I think one of the things that makes this conversation difficult is that if you're talking about the non-profit world, there are lots of tools to think about impact and impact measurement. And over time, you know, we've as organization scale in particular, one of the kind key tools we have in our tool kit is a randomized control trial. Or there are similar approaches to be able to isolate impact. But in the case of social entrepreneurs and their investors, those approaches tend to be impractical if not impossible. So what we're gonna talk about today is, so what do they do? So how, if impact measurement and impact, quantifying impact is in fact one of the biggest challenges, how are organizations thinking about doing that when some of the tools that are most commonly used by sort of our non-profit, their non-profit colleagues, are otherwise not necessarily available to them? So one of the things that I want -- and, you know, Kara talked a little bit about this Chicago Approach -- one of the things I wanna talk to you tonight about is, I wanna give you some core concepts. I wanna give you some frameworks to think about, about some of these issues. And some of these are frameworks that I've developed. and others are ones that I've adapted from others. But I'm gonna try to give you a little bit of sort of some frameworks that help you think about this problem. So one of the core concepts, and I teach a number of classes that, you know, bring in impact measurement. In fact, almost every class I teach in some way brings in impact measurement. And one of the most important things that I talk about, you know, when I'm thinking about this broad idea of what, impact management: So impact management is the idea that you are thinking about using and developing your impact, how it's being achieved, what's being achieved. Impact management is sort of the overarching idea. A little bit like if we think about financial management, right? If you're running a company you're thinking about where, you know, what's going in, what's coming out, where are the revenues, where are the costs. And you think about that as financial management. Impact management in a social venture is equally, if not more important, right, to make sure that you're getting that impact. And so the problem is that oftentimes we think about this broad idea of impact measurement, we get stuff kind of confused. And so part of what I want us to think about is breaking apart that two concepts in impact management. One is really about evaluation -- and this is what we mean when we think about the idea of randomized control trials. Did it work? Did it alone work? Can we isolate the degree to which we, what I am doing is actually achieving the outcomes that I wanna see, and why does it work? That is the realm of evaluation. That is different than measurement in a more, in often in a more sort of day-to-day way. So measurement helps us understand how it is doing -- like, how the thing we are doing is working, right? It helps us track outcomes against our goals, and really helps us make sure that we're on pace to achieve those goals: kind of continuous improvement opportunities. As well as knowing, did we contribute to helping solve the problem? You may not be able to get attribution; you may not be able to say we alone solved the problem. But you can begin to tease out whether you contributed as an organization to achieving the outcomes that you wanna see. This is, we're gonna talk mostly tonight about measurement. We're gonna really not talk that much at all about evaluation. I teach lots of classes on that topic but tonight really we're gonna talk, we're gonna stay in the role of measurement. And a big reason for that is because that is where social entrepreneurs and their investors tend to live. OK, so certain investors can use measurement then to really improve the business of how it delivers impact. And that is a critical thesis overall as we think about working with -- I work with our social entrepreneurs. You know, as you are in the field, thinking about what can impact management -- again, this broad idea -- how can I use impact measurement to really improve the way I deliver my services? And it's really, this is critical for entrepreneurs to be thinking about this as it is for our, for impact investors because these pieces go together. So what does measurement allow us to do? Certainly it helps us get better and deliver better services for our beneficiaries. We learn through measurement, right? It's like that continuous improvement piece. Helps us make better decisions overall. We've got two products in the market and one is delivering better outcomes. You can divert resources in that direction. It also helps us think about -- in the boardroom, right? -- if we are a company that is impact-focused and we wanna be able to align with the board of directors or otherwise align management incentives in the direction of impact: If we don't understand, you know, what the data says we can't do that effectively. We can't manage those conversations in the boardroom and develop incentives that really get us where we wanna go. And then certainly being able to fundraise right. If you are an early-stage company and you wanna be able to go out and raise investment capital that is impact oriented in particular, you need to be able to show some of that impact. And the question then becomes, how do we really set up such a system? And you know, this is where we have to do some work on the front end and then some work on the back end. And we're gonna talk about these two pieces tonight. So the first piece is really setting up this impact measurement system and then using it, so we'll kind of break those two pieces apart as we go through. The challenge and the reason that we don't do this, and the reason I think that impact investors are worried -- and probably rightly should be -- that we're not sort of delivering on the impact part of the impact investing in terms of quantifying and showing those results, is that it is expensive. It is hard, right? It is costly in lots of ways. And in particular, when you're running a business, I mean, I think for whatever reason, there is sort of a different standard for for-profit social businesses versus non-profits. And we could get into that; I'd be happy to talk about why I think that is, but that exists. And I think one of the outcomes of that is that social businesses have, there's less sort of pressure on these issues. And I think perhaps it is because they're managing this double bottom line and so there's what drops to the bottom line is often more, maybe much more sensitive. So thinking about, it's costly, just it costs money, right? Certainly that. But I think the other pieces of what makes it costly are almost worse, right, it can be a distraction. And it can also -- especially as businesses are in their early stage, they may not have quite exactly figured out what the impact is that they wanna have. They're really thinking about, are we getting those measurements right? Are we reducing effort on things that are not measured, even though those may be the things that we want? So it can be a challenge to get entrepreneurs to really be thinking about this because it can be very costly. So how do we actually go about it? Despite that, how do we really go about setting up these systems? Part of what we wanna do is make them simple and useful, right? We wanna combat that costliness by really building systems that are gonna allow us to report in a simple and useful way and have the benefits in terms of that continuous improvement. So, you know, there are these two steps. The first piece of this is, the first piece of this is really deciding on the organization's intended impact focus and theory of change. We'll get into that in a second, what I mean by that. And then building data collection activities into the business. And I think that's where the sort of setting up here happens. So I'd love for you to just share in the chat for me a for-profit social venture that you think does a good job with impact measurement. You know, if you're thinking out in the world, you're thinking about investing in these kinds of companies, throw into the chat, into the Q&A some ideas that you've seen out there, and ventures that you think are doing a good job of actually measuring their impact. PepsiCo? Interesting. I'm not sure I'd put PepsiCo in the impact, that social venture, for-profit social venture category. Talk about what my definition of that is. What else we got? Patagonia. That's an interesting one. Vital Farms, Rothy's, MSCI, NextEra, another Patagonia, Walmart -- another one, not so sure I'd put that one in there -- Warby Parker. Ford Foundation, they're not for-profit: They are in fact non-profit, although I think they're doing a pretty good job around their impact investments. All Aboard, Johnson & Johnson. Interesting. Chobani. Interesting. Tesla. That's an interesting one. Ben and Jerry's, Kiva. Yeah, these are good. Adidas. That's another interesting one. Lyft. That's an interesting one. Grameen. Certainly the like, very large industry microfinance businesses are, you know, a number of them out there -- and they are, many of them are for-profit and many of them are by nature doing a good job with impact measurement. Yeah, there are a lot out there. I think some of these are large public companies and others are sort of some of this, these may be smaller earlier stage. And Google. That's an interesting one. I definitely don't think of that as a social venture. Booth. I like that one! We're not for-profit either, incidentally. So I wanna talk to you tonight, I'm gonna use this case study. I don't know if anyone's heard of this company. The reason I'm picking them, this is a company called LuminAID. LuminAID came out of our Social New Venture Challenge. Actually, they were the 2012 winner of the Social New Venture Challenge. And they were invested in by Mark Cuban, incidentally, by being part of "Shark Tank," so if you're interested in that. They actually, I think had a -- they came back on, they were on "Shark Tank" and then they came back and did one of those "where we are now" deals. And LuminAID is a company that produces a solar-powered light. You can see it here in the picture. Picture on the left is their original product. It looks kind of like a pillow or like one of those old-school pool, like the little, the things you put around your -- that kindergartners put on their arms, kind of the pool floaty deals. But inside, it has an LED light. And part of what's unique about it -- and you can see this probably better on the picture on the right-hand side -- is that they fold down and they're very, very small when they fold down. In fact, the picture on the left of the children, that light actually folds down to the size of an iPhone. It's just that one is just a light. It has as no other functionality. The one on the right, you can see it folds down. It has a light feature; that one blows up and kind of looks like a box, like a lantern kind of about yay big. And it also allows you to charge your phone. So all of these products are solar powered. And they, part of what the inflatable nature of it does is it makes them, like that becomes the diffuser element in the light. But what's nice about them because they pack down so tightly is that they are easily shipped and stored. And so this is a kind of critical innovation that was a breakthrough. Kind of what LuminAID was after is that they were really addressing a lack of power infrastructure in a post-natural disaster context. So what happened was the founders, the one of whom ended up coming to Booth, sort of had this insight after the Haiti earthquake that they were seeing what was happening on the ground in Haiti and there was no light. And what happens in a natural disaster context is the thing that people try to -- first of all, getting something on the ground post-natural disaster becomes one of the biggest challenges. And that's the space reserve for getting stuff on the ground is very tightly controlled because it's in a critical -- you want food first, water second, or vice versa, and then shelter is the third thing. But if you think about it, lack of power really creates, and especially like even in developed country... It's interesting, the founders happened to be in Tokyo right after the one of the tsunamis, and they were doing rolling blackouts. And they had their lights with them and they were able to -- so even in developed country context. But oftentimes, the power grid will just be completely down and being able to use a light like this and be able to charge your phone: it improves safety, in particular women and children, especially in certain contexts. It also improves communication, right? -- because you're able to charge your phone -- and it improves productivity. It extends the day, obviously. So the problem that they were seeing, though, is that typically like, you know, a big giant flashlight or a big giant, big plastic lantern are very space inefficient. So part of what they were trying to do is they were using kind of, design, to really get down the light into a very, very small package so that it could be inflated to create the actual lantern, but they, you could ship a lot of these. You can ship about 250 of these in a box instead of just 12 or 14 in a box of like, the big lanterns. So this is the company I'm gonna, we're gonna use them tonight kind of as a case study. Again, they were a Booth-founded company. But they also do a really nice job of impact measurement. I'm gonna talk a little bit about that over the course of this presentation. OK. So this is back to our two steps. So the first step is really deciding: What is your intended impact focus and what is your theory of change? So a theory of change is a core concept. This is another one of those framework ideas. And sorry, theory of change and intended impact are both kind of core concept ideas. We'll talk a little about these. Very commonly used in the non-profit space and increasingly a very common tool that impact investors and social entrepreneurs are thinking about. So an intended impact describes the "what" and "who" of what the organization is trying to do. It distinguishes that long-term aspiration. So like many organizations have these like big missions of end hunger or save the planet or whatever. And that -- What an intended act does is it tries to bring it down a level to make it something a little bit more concrete. So it distinguishes that sort of big, long-term aspiration, and instead creates a clarity around who are you serving, and what are you think, what are you trying to achieve? So it creates, in particular, a point of accountability. And there's usually a time horizon that is attached. So in the next five years, we will serve X number of a certain kind of population and help them reach a certain kind of outcome like stability or, you know, whatnot. So the idea is to bring, rather than just a big lofty mission, to really use an intended impact statement to kind of get something a little bit more concrete. It allows you to focus on populations that you are prioritizing most. So one of the nice things about LuminAID is that they have had both a kind of commercial, like you could send this, you could sell this through REI to campers. They had to make choices about where they were gonna put their energy: REI or really focusing on the ... And this is, you can see the suppliers, too: UNAIDS, Doctors Without Borders, Shelter Box, The Red Cross, et cetera. And so thinking about where to focus your energy in terms of like, where you're gonna spend your time in the market and where you spend your marketing dollars. So it helps you begin to prioritize and think through that. So LuminAID's intended impact looks a little bit like this. So LuminAID's mission is they're committed to providing lights to those without access to safe, reliable lighting. Pretty big idea, right? And in fact there's like, in that statement, there's really nothing about disaster context, right? But this idea that they wanna be able to provide this sort of key element to really everybody that needs or wants it. In reality, their intended impact is to make light and charging products. They are a product company. They're not actually building grids, right? You see that in the mission. You don't see the light product, right? You see that "providing light," so that could be a lot of things. Instead, their intended impact is a little clearer. They're providing charging and light products to specifically -- this is they're kind of focused -- who is really non-profits, NGOs, and governments. Not necessarily people on the ground; they are not a direct consumer product. They really go through non-profits, NGOs and governments who themselves are working in underdeveloped communities -- especially in disaster relief, education, rural development and women's empowerment. So they get pretty specific. They do not have like, X number of lights by a certain date. That would be something that might easily sometimes be in an intended impact. They do not have that. But you can see the difference between the mission and intended act. This is a really critical piece of, sort of a management tool to be able to really clarify where you're trying to focus. OK. The other piece of the puzzle is a theory of change. And a theory of change explains essentially the "how you're gonna do this" and links what you do to the intended impact -- really, to outcomes -- and then ultimately to the intended impact that you have in mind. So what are we gonna do? What are the activities, or sometimes we call them approaches -- how is that going to get us sort of short-term outcomes that are then gonna lead to that bigger intended impact? So this is an example -- this is not LuminAID -- but this is an example of a theory of change. So it comes from 2007 and it's really designed to show you a very, very basic example of a theory of change. These can get really complicated. There's lots of really good, if you're interested in theory of changes, lots of good stuff to read about this topic. It's become kind of a core management tool and again, one increasingly used by social entrepreneurs and impact investors. So what you have here is that you have the program model or the approaches, or the activities. Often we call them approaches because they're a little bit higher level than just activities. And this in particular was at the Center for Employment Opportunities. So they're providing life-skills training, transitional jobs, permanent job placement, and post-placement support. Those are kind of their key activities. And then they have of this alumni program. So those pieces, the program model pieces, drive these short-term outcomes that they wanna see. So they want the people who go through their program, they wanna see they essentially have their job ready. So that's an outcome. So an outcome -- and I'll talk about this a little bit more in a minute -- but an outcome sort of describes the change you wanna see. So they want people to be job ready, and they want people to have an initial engagement with the workforce. And if you have that initial engagement with the workforce, research tells us that you'll be able to, that will be sticky. Those short-term outcomes when achieved -- and you can see there's some metrics underneath each that help us know that we're achieving those outcomes -- those short-term outcomes then drive into the long-term outcomes. Employment that breaks the cycle of reincarceration and ultimately long-term attachment to an advancement within the workforce. And that really gets to the like, ultimate change of thereafter, which is really about making sure that people are employed and have long-term employment, you know, in the -- that's really what their mission is. So you can see this is -- and we often, oftentimes I said, theory of change in this way -- kind of in this model where you have approaches on the right and then outcomes kind of in the middle. And oftentimes we'll see evidence also kind of enter into this. Why do they think doing X will lead to Y? This is just an example, this is a basic theory-of-change model. And again, the idea of theory of change, we're gonna see this a couple different times. It's become a really critical element, again, more and more in social entrepreneurs and impact investors. So what's important about a theory of change, what's important about this sort of level -- and again, we're talking about impact measurement, not evaluation, which is different, in that evaluation is the stuff of impact sort of isolating. But we're really talking about is trying to think about outcomes. Outcomes allow for us to understand that contribution and to know that we're contributing: And what is the change we're seeing? So most startups really early stage are really unable to achieve even the level of association around outcomes. But especially as they keep going -- and LuminAID's been around since 2010 -- they have some good outcome data. But this is a place where you're sort of seeing, you know, what is the change that we wanna see? And that's really the, kind of the key area that many startups and impact investors are sort of starting to play in. Very frequently, the things we measure really become those activities. It's easier to measure. It shows accountability for reporting, even if we're not necessarily seeing that outcome data. And again, outcomes are the change you wanna see in the world or the change you want to activate by the activities. So these are the kind of two levels in which you're seeing frequently startups and impact investors; sort of that's where they're playing. And really almost, you know, more frequently on the activity side. Again, this is a little bit more on sort of activities are what we do; outcomes are the change that occurs. And I think this distinction is really important. And I think, you know, trying to figure out where we can, what we can measure in order to get to either, can we count certain activities or can we think about ways in which, for LuminAID for example, how they are helping the NGOs, governments and non-profits that they work with to ensure that light's getting on the ground, that ensure light's a priority, right? That's some of the changes that they wanna see occur, given their business model. OK: So this is back to theory proof; again, I'm using LuminAID a little bit as a case study here tonight. LuminAID's theory of change prioritizes activities again. And they particularly focus on those activities that they have under their span of control. So the things that they do are kind of here on the left. They have this "Give Light, Get Light" campaign. So you buy a light, you can donate a light to an NGO. They have an NGO subsidy program that reduces the cost for those governments, NGOs, and non-profits -- so they can make the lights more accessible, sort of like a kind of a wholesale option. They do a lot of blogging and telling stories from the field to build awareness around the value of light. And then they do these sales to large, these sort of post-disaster Red Cross, et cetera, et cetera. So this is their activities, here, are on the left and here's where the outcomes are on the right. And this is right from their website. These are some of the things that they see as outcomes, right? Illuminating education. Providing light allows for kids to be, you know, more productive; allows for kids to work on their homework after the day is done, after the sun has set. And so that is the change, right? And having more access to having light allows for time to study, right? So those are -- that's the kind of outcome that they're able to link their activities to some of the outcomes that they wanna see. And part of what I love about this example as a case study is I think they do a really nice job of, again, focusing on the things they have under their span of control, the things they can contribute to. And they've set it up in a way that's very accessible, right? These are not very complicated. They're not overly confusing. And if you go to their website, you can hover over these and learn more and they have stories and blogs about each of these. So they make it really clear what the opportunities are. OK. So that is the starting place. You just start by thinking about what's the intended impact focus and what's the theory of change. So that's where you begin. And then you need to build collection activities. It's all nice and good if you have an intended impact focus and theory of change -- you've got all that good stuff -- but it doesn't help if you then don't have the actual collection stuff. So you gotta have the data then to go from. So options for measurement as a management practice is certainly activities, right? Like we see that a lot. How are the company's sales activities in marketing linked to those outcomes that they want? Number of lights distributed, number of people signed up for our website, et cetera, et cetera. Interestingly, often we think about financial metrics also as being a way to track impact, right? Total revenue, you know; customer retention. If you have people coming back, that may be part of that overall change that you wanna see. And sometimes even margins, right? Thinking a little bit about, for LuminAID for example, they have a product, you can buy one of these on Amazon. They've sold them through REI. Those sales are higher margin for them, quite frankly, versus their sales to NGOs, but they've prioritized their sales to NGOs because of the mission that they have. But they have different margins -- so thinking a little bit about how different margins within our business and how we sort of balance those can lead, can show us that we have, that we're getting the outcomes that we want. Also thinking a little bit about their peers and LuminAID has a couple of peers kind of in, that are similar types of companies -- although have sort of, certainly in the lighting, the kind of lighting for developing country context. So these questions are like: How are we doing relative to our peers in terms of volume, in terms of sales, in terms of reach? And, you know, whatever the opportunities are there. And there's increasingly a movement towards creating some of these common base lines. We'll talk a little bit about some of these systems in a little bit. And then obviously in the longer run, really getting at that outcome, the outcomes piece. Is there a way that, again, with the LuminAID example, is there a way that we can begin to track safety of women after dark, right, in a post-disaster context? Are there ways we can begin to understand what that, what, the impact of what we do? Even if we are not the, we are not causing it, we are not able to, like, own all of that change, can we own part of, can we be a contributor to that and be able to begin to understand what outcomes look like there? We do think importantly as an organization, especially as social venture scales, this becomes this last piece really getting at outcomes and not just activities or financial metrics becomes increasingly important. Especially as you get into those bigger investment rounds -- you know, the As and the Bs and Cs -- really being able to show when you have big dollars going into your company, are you able to get those outcomes? OK. So once we've set up this, the impact measurement system then it's really about using it. And here, we really need to think about data collection and then actually using those results. And this is an example. And this is I would say, before we get to this, this is where impact investors really come in. It's not just about investors, although they are a key audience; it's certainly, there are lots of audiences that are gonna be important for, like, generating results and certainly in reporting those results. But this is where investors are really getting kind of into the game. And we're gonna see that a little bit in a minute. I'm gonna kind of talk, I'm gonna sort of switch to thinking about sort of how investors are thinking about this. But this becomes really where the, where kind of the two come together. So this is an example of LuminAID's, one of their reports. They do a pretty good job in general of reporting. And you can see they're reporting these data to investors and stakeholders. It helps them increase their credibility and provides clear points of accountability, right? We know how many, so these are sort of things that they've donated. This is a particular example, sort of like part of a story that they told around this particular organization. You can see they have the different types of products that they distributed, the way they distributed them, where they went. Again, related to this Mercy Corps organization and then the quantity, right? So you're really seeing these sort of specifics and transparency around the work they do and really providing that credibility. OK. So I wanna shift a little bit to the other side of the table, because in many ways it is, in fact, the investors who are gonna hold companies like LuminAID accountable for their impact. It's a two-way street in that way. Investors have to prioritize and be thinking about the way in which impact happens. And social entrepreneurs are thinking about how do I inside my business really think about maintaining and extending the impact? So this is a screenshot from a paper that was actually written by a number of, couple of professors from Wharton and our very own Jessica Jeffers, who's at Booth in the Finance Group. And what they did is that they looked at contracts. They looked at hundreds of hundreds, frankly, of contracts that were between impact funds and their direct investees, their portfolio companies. And what they found is, they found two kinds of impact that were outlined and sort of identified as part of these contracts and these relationships. So there was operational impact, which is exactly what you would expect to see. So funds had the ins as they were doing their diligences, they were thinking about making these investments, they would look at impact. So they wanted to be able to understand, you know, what was the impact that I can expect from making this? Can it help me understand what that looks like? And they also included oftentimes sort of impact measurement requirements, so it's reporting back to the funds. Sometimes that happened and in fact often you see that when you actually dig into contracts, you see it happen as a side letter, which is sort of interesting in of itself. But you see this operational impact. And this is kind of in the, the like, stuff of, in particular activities. And the investors were building into these contracts ways of sort of protecting the impact that they were expecting from these companies through these contracts. So for example, they had veto rights on deviations from the business model, or thinking about, again, sort of deviations really from impact. They had built in identifying, measuring and reporting on sort of some kind of impact role. And in fact impact here is probably like a light version of this. We're really thinking about sort of impact activities and outcomes. So that you saw it was very, very common and I think really speaks to the way in which impact investors want to build in these mechanisms as they think about actually putting money in these companies. Interestingly, these contracts also featured what the authors called aspirational impact -- which is really this idea of really a commitment to, and a kind of affirmation or agreement, that we're all on the same page around this sort of bigger idea, right? That like, think about a commitment to the mission, or even to that, like, bigger category of impact. So you see both but where you really get, where sort of the rubber meets the road -- that this is what their analysis is if you read the rest of the paper -- is that really it was in this operational impact that you saw kind of most of the action on the impact side. And again, often sort of as a side letter. So I'm curious, given what we've talked about tonight, as we think about, again, these others at the table, another poll -- what is the most, I'm gonna open this poll real quick, here we go. What are the most commonly used tools for measuring social and environmental performance by impact funds today? So I've kind of got four options. You only get to pick one. Curious what you guys think. Standardized assessment, quantitative -- sorry -- qualitative data, proprietary metrics aligned with external frameworks, or proprietary metrics not aligned with external frameworks? Standardized, qualitative, metrics that are aligned externally, or metrics that are not aligned externally. You guys really don't like standardized assessments. Interesting. Huh. OK! You guys are still going, so I'm gonna get, I'm gonna leave it up here a minute. This has been the big topic in impact investing, and I think it'll be interesting to see what the results are. I think you guys are mostly wrong interestingly. OK, it's slowing down. I'm gonna give it another second. Let's see. OK. We'll go ahead and end our poll and share. So you are optimistic. Report proprietary metrics aligned with external industry-wide frameworks. In fact, this is what we actually see. So this is technically a year-old status from the Annual Impact Investor Survey from 2019. So this would've been a year ago. And I actually think, you know, a year doesn't seem like very much time but a lot continues to evolve. They did not, unfortunately, they did not actually ask this exact question in this way, so kind of bums me out that I don't have data from 2020. But there is some data that is sort of similar in their 2020 survey. I'm happy to send it to anyone that's interested, can point you in the direction of that survey that actually shows some similar ideas. And it really has not changed that much. I think it has changed some but funds continue to, like, largely report their and measure their data through qualitative information. And this is really back to where we started, right? This idea that good funds are worried about impact washing. Part of that is because of this trend that they realize that many of them are using qualitative information to show social environmental performance. The next one being -- and this is also very, very common -- using their own internal metrics, kind of their own system that's been built but isn't actually aligned with an external framework. The thing that you guys, again, you're very optimistic. Reporting proprietary metrics aligned with external industry-wide frameworks is really, you know, these last two buckets. And you do see some of this, and I think this is where we've started seeing increases, and I'll talk a little bit more about that. In fact, it's funny because I was on a, I was teaching on Monday a class that I teach on scaling social innovation and we had a couple folks from the industry, one of which is a impact investor and does a lot of work in both basic needs, or, economic empowerment and in the environment. And he literally his quote, he was talking about this issue of sort of how do they think? And they built out some grand proprietary data alignment, you know, their own internal approach. And they had, they sort of in each grantee -- or I'm sorry, grantee each investment they make, they create sort of a set of metrics that they're gonna follow, that they're gonna report on that's all internal to them. And he said that over the 10 years that they've been around, they've tried like three or four different standardized frameworks or vendors or whatnot, and they just haven't quite found a perfect one. So part of what's happening is that the industry is kind of continuing to evolve in this front. So I'm gonna end this, capture results. And so you can see, this is sort where the industry is at right now. And just so you have a sense of some of the players -- I mean, this came up in the data slide -- but just so you kind of know who are the big players out there, and where is some of the like movement coming from? So on the left, the Impact Management Project or IMP is probably one of the biggest entities to really pushing this issue. And it's basically a collaborative of many, if not all, of the big players around, kind of in impact investing. And a big thing that they have done is create a set of norms that people sort of sign onto. So, like, some things that we're going to do, we're all gonna do. They're starting to get into some sort of standardized metrics but that's not exactly where they're playing. They're really thinking about, like: "What are the internal management practices and norms that we are gonna follow as an industry?" and really leading on that issue. On the right-hand side, you can see some of the players that are really thinking about more on kind of the norms on the sort of metrics side. So the two biggest players -- although they aren't by far not the only -- so IRIS is really a framework and underlying set of definitions. So this is like a bunch of metrics that people can report against. And another example that's got some heft is like SASB, the Standards Accounting Board for Sustainability. So there are others that are out there. This is, IRIS is one that's gotten kind of quite a bit of attention and in a different sort of that, so this is more like they have all these different metrics and you can report your account, you know, your performance against their standardized metrics. So that's kind of how they're trying to create some directionality and sort of get everyone on the same page. Not everyone's gonna report every metric but at least kind of create some standards: a little bit like the way in a 10-Q or 10-K you might see. Well, this is, you know, this is like revenue means X, like the idea's like, number of X deployed means X. So they're trying to create kind of apples to apples across funds who are reporting. GIIRS is a little bit different. It's more like a rating agency and I think it's a little bit more analogous to the S&P credit risk rating. So here people are going in and actually getting an assessment kind of internally on kind of what they're doing and getting a rating as a result. These are some of the big players. What's been really interesting and really just in the last year kind of, quite frankly, or year and a half, is that the sustainable developing, U.N. Sustainable Development Goals, have really come out big time. And I actually think it might be the first time that there really is a shot at kind of creating a set of standards that everyone is generally aligned to. If you haven't seen the SDGs, it's a critical thing to know about if you're gonna be playing in the social impact space at all. I was just teaching a couple classes this quarter and I was teaching my other class on last Thursday. We were talking actually about impact measurement and we were talking about the Sustainable Development Goals. And I think 80 percent of my students had heard about SDGs. They are a follow-on from the MDGs, the Millennial Development Goals, which almost nobody had heard of. So the idea here is that there are these 17 sort of world goals that we're all gonna agree to are important. And what I really like about the SDGs and I think were, unlike really the MDGs, you can double click on any of these. So if you go into number 10 -- reduced inequality -- you can look at, they break that one down into a couple of different categories. So they kind of define what they mean and then under that there are these sort of metrics. So part of what this goal was doing to start to really align and actually seeing a big, big, big movement in particular of impact funds to say, "I am working on like 7, 14 and 17. But that's my, I'm taking those. I'm sort of aligned to those in particular. And I'm not trying to do all of them but I'm picking the ones that I'm really gonna try to move the needle on." And you see this here -- so the first set of data I showed you is really from the 2019, kind of around the tools. This is the 2020 report data. So this is a year later and what are funds doing to measure their impact performance? Well over a third of respondents turn to the SDGs as well as the IRIS Catalog of Metrics. So those two kind of being, you know, really where we're seeing the biggest alignment. I think, in some ways, those also have some overlap. So that's a place where you're really seeing kind of, if you're seeing a coalescing in the industry, that is where you're seeing it. I think that's a really good sign because it's gonna allow entrepreneurs to be more clear about what metrics they're reporting and then ultimately funds are gonna be a bit more transparent, then, about what they're delivering on. OK. The last thing I just wanna talk about -- and I said at the beginning that one of the things that when we talked about theory of change, one of the things that, that entrepreneurs are really thinking about or should be thinking about -- is: What's my theory of change? And this idea of a theory of change-based approach to investing is really taking hold. So you see there are a number of different ways in which impact investors are thinking about, within their fund, thinking about this issue of theory of change. But if you're interested in a little bit in that idea, there's also one of our local Chicago impact investment entities, kind of the big one around around Chicago, is called Impact Engine. There's a couple of alumni who work there. And they are, they have a theory of change, they have a sort of different theory of change, but that's what -- they have a great way of thinking about using theory of change in order to understand what their impact is. And part of this has really gotten popularized, I would say, by this idea, and people -- IMM, this idea of IMM, which is the impact multiple of money. And I just wanna explain this, 'cause I think it's a really important, again, sort of thing that, work that's on the horizon to bring even more discipline to thinking about measurement. The idea here basically is that you look at some kind of evidence. So you see in the bottom left-hand corner, this example. So this particular idea, this particular IMM concept, was developed in partnership with Bridgespan, in partnership with the Rise Fund, put this together and there's a great paper on this. And basically what they did was they said, "We know that if we provide education on sexual assault prevention -- that's what this particular example is ... So EVERFI is a company that provides mostly online education modules around sexual assault, like prevention mechanisms to kind of make people aware and sort of prevent sexual assault. So EVERFI is this company that the Rise Fund is invested in. What the Rise Fund is saying essentially is: We know that if there is evidence, there are studies that show, that if you provide education to in particular college students, you will see reductions in actual sexual assaults. We know that those two things are linked and they're linked in a causal way. Now that particular study evaluated the effects of an in-person course versus EVERFI's online. So there's a little bit of a leap of faith going on here that you're gonna see some of the same right here: same impacts you would if it's online versus in-person. So there's that criticism of this, which I think is very valid. But the underlying idea is, they say, we know that we'll see these effects, reductions. We can quantify what it means to see those but, like, to have those reductions happen. And so we're gonna quantify the total value to fewer sexual assaults -- and you see this on the kind of calculating the social return on the dollars. You see the example of eyewear; give someone a pair of glasses who can't see and their economic mobility and their economic ability to generate income goes way up. So we're able to quantify that because we have evidence and research that helps us quantify that. And so what they do is they say, we put in a certain amount of money into this company. We could take credit for some percentage of that amount of lift. We can quantify the lift. We can quantify those outcomes, the sort of improvement in people's lives, in a quantitative way. In this case, eyewear generates $8 in social value for every dollar invested. We know this from research. So then IMM is expressed then as an 8X. And we take, we say, we own 30 percent of the company. They generate an eight times IMM. And so we get to claim 30 percent of that credit. And so this is a broad concept that's really about trying to use this idea of a theory of change to underlie how we think about this work. And this is where companies are going; this is where funds are going; this is where social entrepreneurs are going. And there, part of what you can see here is that -- gonna help get to that in a second -- part of what you see here is that there's a lot of evolution happening in this world. I mean, I probably will give this talk in a year and it will be totally different. There'll be new ways of thinking about these models, you know, new opportunities. And I'd want to just close by sharing in the chat with me a social or environmental issue that you think business-trained leaders can help address. Because at the end of the day, I mean, now I'm breaking a little bit from the model, I'm breaking the frame a little bit and thinking about, we're a little longer in class -- part of what's hopefully attracted you to this lecture tonight is just that you're interested in a business education, which means that you wanna be a business-trained leader. And so I'd love to just know what are the social-environmental issues that you are thinking about? Go ahead and put those in the chat. I love carbon footprint, absolutely, and I think ... I have two small kids and I, you know, the environment and sort of helping to mitigate climate change is gonna be a critical issue facing your generation and certainly my kids. More resilient supply chains, modern-day slavery, nutrition, wage gap, absolutely. Wage gap and wealth gap, right? Wage gap drives the wealth gap. Decarbonization, absolutely. Access to education, social and racial equality, absolutely. Circular economy. I have some students doing some work on that right now. Super interesting. Climate change, gender quality, economic empowerment, kind of all of it and they're linked for sure. Food insecurity, news deserts. Interesting. I've heard of food deserts. I've not heard of news deserts. I love that, gonna to look more into that. Affordability of healthcare. Cleaning the oceans, absolutely. Traceability. Interesting, I don't know what that means. I'll have to learn more about that. Data privacy. Oh, that's interesting. I'm working with an entrepreneur on that exact issue. Supporting refugees, environmental health: right. All of these issues -- and this is kinda what I wanna leave you with -- all of these issues that you want to support and you wanna help, you want to ensure, see change in the world, it's not gonna happen if we don't figure out a way to use measurement and these tools and to be really disciplined about the way we think about this work. I mean, I sometimes joke with my students -- the idea that, like, part of what I'm trying to get them to do is really think in a disciplined way about this. And if a company has impact and they don't talk about it and they don't report it, they don't measure it, they don't think about it, is it really impact? Can you be an impact investing fund if you don't measure your impact? If a tree falls in the forest and no one hears it, does it make a sound, right? A little bit of that sort of esoteric idea. I think it's many of the same questions we have to ask: really building in measurement and really being disciplined about it. It has to be a critical management function. Whatever social issues you tackle, I hope that you use your training and the kinda what you do in your future life and I hope you do it in disciplined way. So with that, I'm gonna go ahead and take questions.

Kara: Great. Thank you, Christina. We got quite a few great questions in here, so I will read them. Some of them are long, so ask me to repeat if needed. OK. So this is back to one of the earlier slides and polls. "I was interested to see fragmentation of impact management approaches as a challenge..."

Christina: Yeah.

Kara: "I think encouraging a diversity of approach is maybe positive insofar as it encourages new innovation, but would love to hear your insights on how it's also a challenge."

Christina: Yeah, no, I think the question sort of lends itself to the answer, which is: If everyone's doing something different and you have that kind of fragmentation -- like, part of what's happening in particular, I think, for the funds is you've got all these new, basically, consultants and business owners who are trying to create their own approach, their own software system, their own set of metrics. And so you're seeing a kind of proliferation, which does allow for innovation; allows for different ways of thinking about it; allows for sort of development of this industry. But at the same time, you then can't compare apples to apples, oranges to oranges. Like all you got are bananas, oranges and apples, and you don't know what to do with those. So it's a bit good, it's a bit bad. I think we're seeing, again, some convergence, which is probably for the best, but you wanna see that innovation. So I think it's not necessarily a bad thing. I think people are, I think part of what it often will leave fund managers scratching their head about is, well, which one do I pick? And like, a little bit like: Do I go, whatever -- VCR or, no, VHS, or whatever the other one was and now I can't remember. But do I, how do I think about sort of like where I lean and which one is gonna win, and because I'm gonna be putting some investment into making either one happen. So I think it's a pro-con.

Kara: Great. That's helpful. This is maybe somewhat related: "When creating one's intended impact, how can an organization test its model or make necessary adjustments to the model to help the company achieve its goals?"

Christina: Yeah, that's a great question. And I think intended impacts and theory of change, which go together, have to be continuously updated. Typically, a company or a non-profit will put one in place and they'll, you know, work with it for a number of years: depends on how long they've been around. The less time they've been around, the more likely they're gonna need to go back and look at it again and again. And then, you know, you don't wanna change it every month. But certainly thinking about it, one of the things that I talk about in many of the classes, in particular in one of the classes I teach, is that theory of change, intended impact, and the organization's business model really form the fundamental strategy of the organization. And that those two things are really intertwined, especially if you're gonna be a social venture. You just need a business model if you're gonna be a traditional net-profit maximizing venture. But you really need to be thinking about these two elements together if you're gonna be a social venture. And so maybe this is a little bit like why I don't think of Pepsi as a social venture. It's not thinking about its intended impact and change; it's just they focus on its profit maximizing, right? So when you're a social venture and you're thinking about trying to maximize or optimize profits and impact, those two things really have to go together. But they do, they constantly have to be thought about and managed, and that helps you drive data systems and ultimately helps you use the information you're collecting, the data you're collecting, to do a better job of serving your beneficiaries and on and on.

Kara: Great. Thank you. So Rahul says he works for a solar energy social enterprise like LuminAID in West Africa. And one of his questions: "How can impact investors facilitate balance between generating impact and ensuring a market rate return on investments at different stages of growth of the social enterprise?"

Christina: That's such a great question. So I have a friend who is a investment banker to impact companies. So she helps invest; she helps social ventures to raise capital -- like big, big cap. I mean, Series A, Series B, Series C. These are companies that are social ventures that are a bit further down the line in terms of their development. And she worked with in particular d.light, so a little bit like LuminAID, although a different kind of company. And when d.light -- d.light's a company that makes solar-powered lights, really mostly for a bottom-of-the-pyramid application. So very low cost, very robust light that's designed to be very cheap and replace cook stoves in particular. And when they raised, when d.light raised their first round of startup capital, they basically took money from whoever they could because they wanted to get the company going. But as they matured and really as when they were raising their Series A and Series B and my friend was working with them -- and they've been with that company and she had been very transparent about this, so I'm not sharing any confidences that are between them -- but one of the things they said is, like, "We really wanna double down on the impact investors. We wanna really double down on investors that are aligned with the mission." I think this gets to the question of what can investors do. I mean, it, an entrepreneur who started a company that has a social agenda needs support from its board of directors, and oftentimes its investors play a major role as this board of directors, right? So these companies, much of the, like, where the rubber meets the road around are they gonna continue to have impact and what trajectory is that gonna take, that's gonna happen in the boardroom. And so part of what I think that impact investors can do is they can play that role in the boardroom. They can be part of the round such that they're able to get a seat on the board and then they can voice and be sure to protect the impact piece of the equation for these companies.

Kara: Great. Thank you. Another thank you, of course, from the submitter of this question: "In your opinion, how soon will impact investing spread into mainstream M&A, mergers and acquisitions? How can we accelerate this process?"

Christina: How will impact investing merge into M&A? I guess I don't understand the question.

Kara: Yeah, in your opinion, how soon will impact investing spread into the mainstream M&A?

Christina: Hmm, so... If the questioner has more clarity around what they mean, I'd love for them to put that into the Q&A. I'm gonna try to interpret what I think they mean. So one thing that's really important to understand about impact investing is that it is not an asset class, right? It is: You can come at investing with impact across any asset class -- early stage, VC seed stage, private equity stage, real estate, public markets. So oftentimes we call what's happening impact investing in the public markets -- more like ESC or SRI, social responsible investing, or ESG, environmental social governance. So there's different sort of ways that people think about it. But it's not an asset class. So I guess, you know, when you say kind of come into the mainstream with M&A, just sort of thinking about -- and not that M&A is sort of its own asset class, there, I guess -- but I think you are seeing impact investing show up in all sorts of places, across different kinds of investment opportunities. If I sort of take out the M&A piece, when do I think it's gonna come into the mainstream? I have no idea. I mean, I think it's... I have a good friend who really is very, very interested in this issue. She's a Booth alum and what she says, and I really buy this, is that all investing has some kind of impact. Every single dollar that you -- whether it's in your 401k, any kind of capital that's deployed to any kind of company anywhere -- has some kind of impact because the company has some kind of impact. The thing that we've done is we've separated out the companies that have positive social and environmental impact from all of the other companies. But every company has some kind of impact. And I think sometimes we call those externalities. But we don't -- sometimes we don't, right? -- but sometimes we don't always quantify all of those impacts, both positive and negative. And so I think if impact investing ever becomes mainstream, that is the way it will become mainstream is that someone will figure out how to quantify all the impacts the company has, both positive and negative, and be much more transparent about that. Again, that's even beyond just sort of what we define as, like, external environmental, externalized or whatnot. And we just haven't gone there. But I think that's probably what it's gonna take.

Kara: Great. That's very interesting. OK: "Financial models change over the life cycle of a business, broadly, if it's in a growth stage or more sustainable stage. How do you think about setting IMM targets for these different financial stages?" So are there any, like, parallels that go along with that? Like steps that --

Christina: Yeah, that's an interesting question. So part of what the Rise Fund is trying to do, is they are trying to use this concept and to create some benchmark. So it's pretty early around. Like, part of what you're asking is when you're a startup, what might -- and you're putting money in and around like an angel investor or a seed stage investor, or a venture, or sort of as you get into like the bigger private equity deals. All of those stages are, you're owning different percentages of the company. You're taking different risks, right, in doing so. And so your different types of investors are gonna maybe have different benchmarks from what they might expect from an IMM. Mostly that work, that sort of like these impact multiple of money calculations, are happening for big deals. So there's been this sort of, no pun intended, rise of funds like the Rise Fund, CBDs. The big double-impact is the one that B.I.G. Capital has. The Partners Group has one. I can't remember all the names. But in fact, Impact Engine, our local impact investing fund just closed a fairly large kind of, you know -- again, sort of bigger private equity later-stage fund. So you're seeing these, it used to be that like a lot of the action was in sort of an earlier stage venture. Now you're seeing it sort of move in. That's really where you're seeing IMMs get calculated. Although I think it's a really interesting idea to think about: Could you create benchmarks kind of across different asset classes, around what you might expect to like have a threshold of? Like: "I'm only gonna invest in this angel deal if I'm gonna be able to get this sort of like the way you might think about get this kind of percentage of ownership, I wanna get this kind of IMM." Yeah, that's it. I don't know. I think it might be coming, but it's -- we're not there yet.

Kara: Thank you. "Can too much measurement ever be a negative in the social impact space? So for example, causes a race to meet metrics rather than focusing on the mission?" So yeah, is there ever like that, I guess, analysis paralysis sort of issue and there's, you know, too much of a --

Christina: For sure.

Kara: Yeah.

Christina: Yeah. I mean, yeah, we see this. I think much worse than too much measurement is crappy measurement. I may think that's what you see much more frequently. I see all sorts of crappy measurement. I don't know that we -- especially in social entrepreneurs, like in the for-profit social ventures -- I don't think you see too much measurement, but certainly like analysis paralysis or focusing on the wrong things. But I think mostly you see bad measurement and that's what we should be watching out for.

Kara: Yeah. That's helpful. This is, it's interesting and I can see others having this in their mind beyond this Cleveland specifics: "In cities like Cleveland, Ohio, we have a hard time attracting outside investment in our private sector, let alone our social ventures, and non-profit initiatives and public sector partnerships. How can our city leverage impact measurement to attract impact investors?" So I guess like, you can broaden that out a little bit. Like, yeah, how do you get traction there? And maybe cities or areas that are less, you know -- or just people might not think about investing in, they don't have some sort of stake in that area, yeah.

Christina: No, absolutely. I think it's an interesting -- whoever was thinking about this, I hope you keep thinking about it 'cause I think it's a really important, a really important issue in kind of in American cities today. And I just read a piece -- actually it was more on philanthropy, but it was essentially a data and a beef with philanthropy for being urban focused and not rural focused. And so like leaving the idea, like the thesis was essentially philanthropy has abandoned rural America. It's probably not and they had some pretty good data. But I think you've seen even this sort of slower cities, like places like Cleveland. You know, much of what -- so we're just gonna focus for a moment on just economic development because I think that's what the questioner is really talking about. How can we kind of attract investment that's focused on economic development, whether it's more socially motivated or not? I think part of what the barrier to attracting economic development dollars is really around showing that there is gonna be, that there are investable opportunities and that there are, there is a strong enough economy there, that you're gonna be able to make money on those deals, right? So I think part of what impact measurement can do is that when you have the kind of forward-thinking organizations that are starting to make progress around economic development in places like Cleveland, getting those organizations to be transparent about what they're seeing and show those data and sort of highlight them and use that to attract other players -- like, that's how markets are built. I think that's oftentimes how we can use the data we collect. Part of what we don't do, right, is we don't often share. We use the data internally, but we then don't share it out. But those organizations that are having success with economic development in places like Cleveland, sharing that data out, showing them that, like, the buying power or the housing market changes or whatever can be really great ways of highlighting the opportunities.

Kara: Great. Thank you. So gonna shift gears a bit, given that the audience is primarily those thinking about an MBA and you yourself having gone through the MBA at Booth. Like: "What new kind of skills and qualities do you really find -- yeah, really help, like, that you gained during the MBA or developed during the MBA experience?" And of course recommend any classes, in addition to your own, of course, that you might recommend, or student groups. Just kind of, yeah, thinking about the Booth experience and the social space. That would be great to hear your thoughts.

Christina: Yeah, sure. So I never expected that I would go to business school. Just personal, quick, very, very short personal story. I decided to, this is like, I'm not joking here. I cannot believe like this is like, this is a true story. A reason I applied to business school is because the office mate next to me, she decided to apply to business school -- and we were, I was kind of competitive, I am a competitive person. And I thought, "Well if she can do it, then I can do it." And I'd gone to, I went to the University of Chicago for my undergrad. So I'd gone to a fairly kind of liberal arts education, as they say. And once I got interested in applying to business school, I was ultimately excited about it and ended up getting into Booth and was really, really a good fit for me. I love the University of Chicago: two degrees from the same place. And I think, I sort of say that because it's not something that I sort of set out, like I had this dream to like get an MBA, but I loved every minute of my time at Booth. I loved everything about the experience. It challenged me in ways that I never thought I'd be challenged in terms of my thinking and gave me tools and ways of thinking about the world that really translated. I mean, I did the evening program incidentally: So I was working and I would quite literally go to class, learn something, go home. Classes go six to nine, so I'd go home at nine o'clock. And I would totally erase the whole presentation I was about to give to the CEO the next day and completely rewrite it because of something I learned in class. That actually happened to me more than once. I loved everything about my experience at Booth. And I think what it has made me is a much more disciplined thinker -- and it's made me more disciplined thinking. I was in community development, I was a banker for many years kind of in community development. It made me a much more disciplined thinker. And I think one of the -- and my work was largely in the social impact sector -- part of what managers need to do a good job of is thinking not just about profit maximization, but about the many ways in which stakeholders and whether that's employees and customers in the community, kind of come; how do you think about bringing those players to the table? How do you think about the ways in which you have trade off, quite frankly, between making business decisions and like something that might be good for the community, might be less good for the employees? And in that dynamic sort of environment, how do you actually make the day-to-day business decisions? And I think part of what Booth allowed me to do is really anchor that thinking in a much more disciplined way. And so that's really translated into the work I did coming into the business school to building out the social impact ecosystem; was really fortunate to be recruited really at the very beginning of that by a former professor. And we built this grade center called the Rustandy Center -- which I would, if you end up at Booth and you're interested in social effect, it is the place to go to kind of hook into the ecosystem. And so it allowed me to sort of build out this center in a way that's very Booth driven. The Rustandy Center stands for the idea -- and I think Booth in general stands for this idea -- that if you're gonna do social impact, it's not good enough just to do good. You have to do it with discipline and frameworks and approaches that would be equally important if you were in profit maximizing. We don't pat ourselves on the back because we do good. We do it in a way that really moves the needle. And I think all of what I've shared with you today, and so that sort of theme has really come into my teaching, is like: How do we do this work better? We can do it better. There are people who are doing it better. And so how do we do that? I think that's, the end of the day, that's really what I love about Booth and what I love about my time there and about the work that we do and when I teach in the classroom. Beyond that, there are lots of great student groups, both the evening and weekend program. I don't know as much about the EMBA groups, but they're also social impact communities and all of those. And I think those communities are growing, growing quickly. There's a lot of students interested in impact investing in particular. We see that as kinda a growing area. And sustainability, actually. Education, basic needs, human services have certainly been around. I think we're seeing big, big growth in students interested in sustainability and the environment. And then I guess you asked a little bit about classes. I mean, certainly, like there are many social impact classes. We have now about nine or 10 social impact classes. I teach a basic, more case lecture-based, kind of skim the surface of all things social impact management class called Social Sector Strategy and Structure. It's a great foundational class. And then a lot of the other classes we offer, really offer opportunities for real role engagement with social issues. So we call them lab classes at Booth. But it gives students an opportunity to really use the basic tools they've learned in other classes or in social sector strategy and structure to then apply those. I'm teaching one next quarter, for example, where students are gonna be working on projects to develop up business models for stormwater management, stormwater infrastructure, and try to find investible opportunities. So really interesting stuff that students can dig into and on the kind of the lab side. But I'd also say just broadly most of the curriculum, because it is discipline-based, allows you to learn operations or marketing or finance, and translate any of those things into the social impact work you wanna do. And I highly recommend students take operations classes. I think it is the frontier for where we're really getting a lift on social issues -- whether those are primarily sustainability and supply chain -- but really just in general, if we're gonna start to get leverage in the social impact space, we're gonna do it by creating cleaner operations, better operations. And I'm kind of pushing people to operations these days. But, yeah: I would say it's a great institution. The thinking and really advancing the thinking is a kind of critical part of the experience.

Kara: Yeah, I'm really glad you gave that example of operations because often we will hear from a perspective student or applicant, "Oh, can I concentrate in real estate or concentrate in a certain industry?" And yes, we have entrepreneurship; that's one kind of, I guess, exception to my example here. But we really do stick to those discipline-based foundations because to Christina's point, you can apply that to whatever industry you're in now, 10 years down the road, 20 years down the road. So really if I'm interpreting you right, it's a really a timeless education as well. And the applicability is gonna be applicable into problems we haven't even thought of yet, which is obviously very relevant to this, the social space, so...

Christina: And I would say entrepreneurship is sort of an industry, but in many ways, entrepreneurship is a way of thinking, right?

Kara: Like a mindset, right? Yeah.

Christina: Innovation, you can be an intrepreneur and many of the entrepreneurship classes we do offer have that sort of discipline-based approach to them. And you can take those entrepreneurial skills as innovation skills and apply them, you know, certainly to a startup -- and certainly to, like, early-stage investing, but certainly also doing intrapreneur in a huge company, which, we need justice. We need people to go to Goldman and to Pepsi and to whatever, Bain, and be intrapreneurs and sort of help think about how we advance those companies just as much as we need early-stage companies to start up.

Kara: Yeah that's absolutely true. I couldn't agree more. And we'll just do one, one final question. And of course, in addition to getting their MBA at Booth, how would you advise kind of early career individuals kind of starting to get interested in impact investing career-wise? Anything you would recommend or resources, steps they should take in their career, et cetera? And then we'll close it up.

Christina: Yeah. Well so if you're interested specifically in impact investing, I would strongly encourage you to get some investing experience. And that is the, today, there are -- it is still a growing industry and so the jobs are really competitive. And the hiring managers I talk to all the time are looking for people with investing experience. Get it anywhere you can, even if it's in a non-impact setting; get the training and kind of the underlying skills, and then you can translate that into impact. But I would say, even like a little bit one level up, if you're interested in -- so I'm fond of saying social impact is not a thing. You can't work in a job, you can't work in a social impact. You can't do a job search for social impact. Like, that's not a thing. What we do is we move the needle on certain social issues. So get passionate about something. Read a lot. If you're really interested in the environment, like get to know the environment, right? Like really, really do the homework. If you're interested in basic needs, if you're interested in financial inclusion, go to conferences, talk to people, really understand what is the issue. Talk to people who are actually facing the issue. Get some lived experience if you can on certain areas and really become -- and I think sometimes that doesn't happen for many people until later in their careers where they really latch onto something that they really, really care about. Certainly, that is in part my own story. And, you know, I did a lot of financial services kind of in my early career years. And I cared a lot about financial services but it wasn't until I was a parent that early childhood education became one of my top priorities in terms of social issues, and it's where I spend a lot of my time today. And Kara mentioned that at the beginning. But get excited about something, get passionate about a social issue that you really truly wanna see solved and get knowledgeable about it. And I think that will then help you really frame out. There are lots of ways to attack that issue and you might see -- you know, you can do that from the different vantage points over the course of your career. So that would be my advice.

Kara: Great, thank you. And that's like perfect time. Well, Christina, I cannot thank you enough on behalf of everybody on the webinar this evening. Thank you so much for your time and your insights and your candid personal stories. It really brings it to life. So thank you so much. And for everybody that joined us, thank you for giving up some time out of your day. Any additional questions, let us know. We have other Masterclasses coming up. You can always reach out to us. These recordings get posted, so follow up anytime. We're more than happy to help. And again, thank you, Christina. It's great to see you, I'm missing you in person. It's really great to see you and to be able to connect a little bit this evening.

Christina: Yeah, agreed.

Kara: All right, thanks everyone.

Christina: Take care, everyone.

Kara: Take care. Bye.