MBA Masterclass Measuring & Maximizing the Impact of Mission-Driven Ventures

- Are you seeing the right version?

- Yeah, I can see your notes aside as well.

- How about that?

Kara Northcutt: There we go, perfect. And then I'm going to do, I'm going to mention Civic Scholars in the beginning, because we did a special invite to those that are interested. And then at the end, I'll probably pitch you a question about why an MBA with nonprofit government experience things like that during Q&A if we have time, okay?

- Great.

Kara: Cool.

- Always.

Kara: All right, people are starting to come in. Hi, everybody, welcome. It'll take just a few minutes for everybody to log in, so thanks for joining us today. If you are inclined, feel free to let us know where you're joining us from in the chat. The chat should be enabled for everybody. I am downtown Chicago at our Gleacher campus today. What about you, Christina?

Christina Hachikian: I'm at home, actually. It's my home office. My kids are running a little race at their school, so I stayed home today to go to the race, so.

Kara: That's great. All right, perfect. There, I just want to make sure, so the chat was working. Okay, so we got from India.

Christina: Good, here they come.

Kara: Fantastic. All right, there we go. Global group, that's great. All right, and for those that are just joining, it'll take just a couple more minutes before we'll get started for everybody to be able to enter the webinar. Feel free to let us know where you're joining us from. It's got a very geographically diverse group, which we appreciate. It's one great thing about the master classes, and if you want to respond to everyone in the chat, that's great too so others can see it as well. We have that enabled for everyone to be able to view. I saw a couple in D.C., I'll be in D.C. next Thursday doing a lunch about our Civic Scholars Program that I will mention a little bit. So if anyone is interested, I'll put my email in the chat later. You can always reach out to me if you haven't already. I've been made aware of that, just an in-person sort of lunch and learn with a couple of our alumni of our Civic Scholars Program. All right, so quite a few people are coming in, so again, we'll take just another minute or two.

Christina: Kara, do you want me to stop sharing for a moment? Will you do intro, or you want to keep the sharing?

Kara: You're totally fine, that's totally fine. Super great, yeah, thanks for checking. Okay, it's starting to taper off a little bit with people entering, of course, individuals will still be able to join throughout. Hello, everyone, my name is Kara Northcutt. I'm a Senior Director of Admissions here at Chicago Booth, and I'm pleased to welcome you to today's masterclass, "Measuring and Maximizing the Impact of Mission-Driven Ventures" with Professor Christina Hachikian. So today, we'll run about 90 minutes or so. Professor will present for maybe 60 minutes, and then we'll do some open Q&A if time allows at the end. Everything's being recorded, we'll get it posted and everything, so feel free throughout if there's some questions you want me to pose during the Q&A, put them in the Q&A, or put them in the chat. I will keep an eye on those throughout, and then I just want to make a note to how really excited we are that there are so many of you interested in social impact, and for some of you that might be working in nonprofit or government currently, I wanted to bring up our Civic Scholars Program, which is part of Chicago Booth's evening, weekend, and full-time MBA. So it is a full scholarship program for those currently working in nonprofit or government, and who will either return to or remain in those industries during and post-MBA, depending on which format of the program you're going for, so really think about, for scholars and those really dedicated and see a long-term career in the nonprofit and government space. I will post some links in the chat about the program in general and some of our upcoming events, but since this topic is very of interest to those individuals, I wanted to make sure you all were aware in case you happen to be interested and eligible for that program. So again, I'll post some of those links throughout. But today, we're going to hear from Professor Christina Hachikian, who holds an MBA here from Chicago Booth with a focus in strategic management, and managerial and organizational behavior. She also earned an AB in public policy from the University of Chicago. Professor Hachikian is a Clinical Associate Professor of Strategic Management here at Booth. She teaches several of Booth's social impact courses, focusing on topics including scaling social innovation, and social enterprise strategy. It's my pleasure to now turn it over to Professor Hachikian, thanks, Christina.

Christina: Thank you. I'm really delighted to be here. So, thanks for that, that comprehensive introduction. I also just want to mention, so between, or while I did my MBA in the evening, the evening program, and while I was in the MBA program sort of before, during, and after, I worked in community development. So I spent about a decade before actually coming to Booth, I've been at Booth 11 years. Before coming to Booth, I spent about a decade in banking, and sort of community development banking. So, I've lived both sides of the operating roles in social ventures, as well as sort of more on the impact and teaching impact, and on social entrepreneurship kind of both pieces. So, I bring a little bit of both to kind of this conversation and what we're going to talk to about today in terms of how, in particular, organizations that are trying to have impact through market-based strategies, think about codifying and sort of valuing that impact. So I just want to start though, before I jump into the content, I really want to start with a quick poll. As you see, my poll question is up there, just to get a feel for who's out there. We see where you're coming from, but I'd love to know a little bit about like what it is that you are thinking about doing with your lives, that's leading you maybe to this idea of getting an MBA, and what you might do with it. Always love watching the polls, sort of, I get to see like the numbers go up, and the... Okay. Sort of slowing down a little. One more. Couple more seconds. Okay, I'm going to go ahead and end the polls. You can see the results. Give you a feel. You guys can see those, right? Oh, there we share results, there we go. Everyone's seeing that? I need like a thumbs up, somebody tell me that you're seeing that.

Kara: Yeah, I can see it.

Christina: Excellent, okay, great. Yeah, so a lot of people thinking about funding ventures via impact investing, almost 50%, which is probably why I knew, so that's kind of what we're going to talk about today. And many of you also thinking about starting a social venture, and maybe many of you are doing, thinking about both of those things. So, that's great. And really, like one of the things, I mean, I've been working at Booth, as I said, 11 years, kind of worked building out a lot of Booth's infrastructure around social impact, including a lot of the work we've done around impact investing, and the programs available to students thinking about impact investing. And I think the tools of that you learn in getting an MBA are really instrumental in where the sectors are right now, and sort of the ability to kind of take that leap further. And a big part of that is, as we're going to talk about today, impact, and sort of impact management. So, I'm going to jump into what we're going to talk about. So, this idea, the words, by the way, impact management are not my words. This is actually like the sort of the term that's being used most frequently, especially in the impact investing world to talk about impact measurement, rather than impact measurement or evaluation, which, in especially in the impact investing world, people are moving away from, they're starting to talk about this idea of impact management, like a tragic term of art, if you will. Or talk a little bit about how startups think about that, or early stage companies, even as they grow. And then also the impact investors side, the people who fund them. Okay. One more poll. Actually, I have two polls, but I'm going to do one now, kind of one in a little bit. I'd love for just to hear what you all are thinking about. So there's lots of challenges facing the development of the impact investing market. I think there's been some work done on this question, whether it's about, so the poll asks you to draw a pine on kind of where you think some of the biggest challenges are. Is it really in sort of the impact frameworks that are lacking? Is it about guidance from regulatory bodies? What do you see as sort of some of the biggest challenges, lack of deals or investment vehicle? Or even professionals with relevant skillset? Like, where do you see some of the biggest challenges? Great, I love it. Everyone's pruning away. Be clarifying data, looks like the leading is integrating impact management, that's interesting. In financial, although they're like neck and neck. I love it. And we'll go maybe like another 5 seconds, 10 seconds. We got most people slowing down. End our poll, and share the results. So as you can see, okay. If you're seeing all of them. Yeah, this sort of middle group, lack of clarity with measurement frameworks, regulatory bodies and integrating management, financial management and impact management kind of being the top three. Interesting to think about. I'm going to show you some data, what the market says about this here in a second. I think one of the things I see in this is these three middle ones, especially the clarity on frameworks and regulatory bodies is I think indicative of something that I hear from people, which is like, "We're looking for guidance, like just tell us what to do and we'll do it," and I think there's a little bit of a need for that. I actually think what's really happening is that people are actually trying to, like it's more organic internally in some ways, some people are sort of waiting on the sidelines to be told what to do, and other people I think are waiting for kind of understanding from kind of, they're driving the change. But actually, it's interesting, the data, here's the data. So this is actually, this is a great, a great article. So, impact investors are really focusing more and more on the impact piece. Some of this is like the evolution of impact investing. When impact investing first, like kind of the words were that label, I mean, impact investing, to be clear, and impact companies have been around for a very long time, for at least a hundred years, if not more. And impact investing has been a thing that the foundations and others have been doing for like, just as long. Whole industry community development where I came from was basically built, microfinance built through impact investing through social entrepreneurship. So it's not a new thing, but about two decades ago, a group of people kind of got together, kind of coined this term impact investing. And at the time, they really did so with this like, "The investing world is over there, and we are over here, we're the impact investors." And over time, that idea, the like separation from the investing world and the impact investing world has really, actually in many ways, that same sort of group of people have been trying to erode that differentiation and say, "All impact, all investments have impact, positive or negative." And so part of what we want to think about is how do we actually capture that positive, and do more of that? This is the GIIN, which is the Global Impact Investing Network does every couple of years a impact investor survey. So they did one in 2020, but actually this data, as you can see from the notation at the bottom, is really actually from their 2023 report, which just came out. And here, what you can see is sort of the most significant challenges, that if you look at the blue, significant and moderate, right? Are really these first two, right?

Christina: Comparing impact results to peers, and not having sort of standard impact measurement framework. So I think, this is sort of what I was talking about is like the kind of compared to the poll results as you guys view them, where these sort of things in the middle, guidance and integrating, and being given clarity, people are seeing, they're definitely seeing it as a challenge, but maybe a little bit less of a challenge than really people, the sector itself, the investors have to get their act together more or less. And they're really seeing it as a critical path, like getting themselves aligned, of being able to compare to each other, having more like, deciding as an industry what impact measurement frameworks we're going to use, so we're going to talk a little bit about what that looks like. But this idea of measuring impact, impact management, has become the conversation in impact investing. If you're interested in this field, I would highly recommend subscribing to Impact Alpha, or get, they have a free version, and then they have a paid version. It's the kind of newsletter for impact investing, impact investing field. And you can certainly, like it talks about deals, and things that are going on. It talks about people working in the sector, but one of the interesting things for me is that as I look at the, like, I mean, I read it every day, as I look at the kind of conversation that's happening, and it's been around a couple of years, I've been reading it a couple of years, you can really see that in what they're talking about, in what they're highlighting, measurement and management of impact has really risen to the top. It's a regular conversation, so I think you're really seeing this as kind of a big piece of what's going on. Okay, so what I want to talk about then is like, how do you actually do this? Because it's nice to know that we need to do it, and a little harder to say like, "Okay, so how, what do you do?" One of the things that, and I just, I actually was just talking to my MBA students about this yesterday, is that when you think about measurement and evaluation writ large, so the stuff that we're doing in the nonprofit sector, the stuff we're doing in the for-profit social venture sector, in many ways the nonprofit sector is way ahead, and has been like created a lot more frameworks and approaches for developing a theory of change, creating outcomes, measuring all the way up to randomized control trials, which are really able to isolate, so a randomized control trial is like an AB test. You have a control group and you have a test group, and you're really able to use that tool. And actually, several people, several economists won a Nobel Prize a couple years ago for the use of this tool in combating poverty. But what you can do with a randomized control trial is actually separate and isolate cause, causality, and therefore impact. But many social entrepreneurs, and certainly their investors, the kinds of things they're investing in don't lend themselves to randomized control trials, naturally, and that they're very expensive. And so it may be impractical and impossible for the group of social entrepreneurs and their investors to really think about that level of, that level of impact measurement. And so then the question becomes like, okay, well what do you do, right? Okay, so what do you do? One thing I want to just kind of create is this distinction between the measurement. When we talk about randomized control trials, we often are referring to evaluation. So evaluation is the idea that like, at the end of something, you go back and you look, and you isolate your role as an organization in driving outcomes. So like, did it work? Did it work alone? Or are there other things going on? And really, why did it work? And I think that level of evaluation is great, and there are certainly organizations, I mean in microfinance for sure, who have done evaluative studies, or summative studies as we sometimes call them, on their work. That's great. It is for most nonprofits, frankly, until you get to really big scale, and for almost all the social enterprises, the for-profit social enterprises that I've worked with, evaluation of that kind is really, like now, it's not necessarily sort of sought after, and it's oftentimes from cost perspective or from a impractical perspective. So then we get into sort of the measurement side, and that's why making this distinction between sort of more evaluative work and more measurement work, so measurement is often about like the day-to-day tracking of outcomes, using those outcomes to improve continuously. And this is how I think about it, whether it's a for-profit or nonprofit, but really like managers and leaders, CEOs need to get much better at tracking their outcomes, looking at that data, and using that data kind of to do continuous improvement. And I think knowing then, did your work contribute to the outcomes that you are seeking, right? That's a critical piece of the puzzle, so starting with this idea of what are you trying to accomplish, and then can you isolate some outcomes? And I'm going to talk about what that means in a minute, that help you know you're getting there. And this piece, this measurement piece I think is, many of the nonprofits that I work with are much better at this than the for-profit social ventures that I work with, even though many of the same underlying ideas apply to both types of organizations, but the nonprofits I think are kind of ahead of the game. The sector has a lot to learn from those frameworks, so I'm going to talk a little bit of what some of those frameworks are, so we're going to really focus on this bottom half when we talk about what social impact, like for-profit social ventures are thinking about doing. Okay. So, the basic framework I want to share with you today is a two-part approach. If you are a social entrepreneur, so I'm going to spend about like, for our time together, I'm going to spend a little bit more than half talking about if you're a social venture, what do you do? And then I'm going to talk about if you're an impact investor, how do you think about this? We're going to talk about these kind of two things in parts.

Christina: So this is really, if you are a startup, if you're a social venture, this is even like, as you get along in your growth, what do you need to do? So the first thing you need to do is actually you need to set up your measurement system, and then you need to use it. Pretty basic, and there's some pieces to that we're going to talk through. And why you should do this, not just because it's like a nice to have, or your investors are asking you to or whatever, but really because you think that improving your, it will actually improve your performance, it will help you make better decisions. I am not a fan of collecting data for data's sake. The goal is really about making better decisions, creating better incentive structures, being able to talk about your work with your investors, and a lot of it's about doing better, better work for the populations that you're trying to serve. And I think this is a really important piece in particular, because for startups, I think they often sort of feel like, "Well, we'll get around to that when we get around to it," and because it feels like something that's like somebody else is asking for. But if you're going to call yourself an impact company, a social entrepreneur, then you need to have, you need to track metrics that are not just about financial success. You need to track metrics that are about impact success, and you need to do that for your whole team. It's really part of building a culture around impact within your organization if that is something you are prioritizing. You're not a social venture if you're not managing your impact, if you're not paying attention to it, then you're just a venture who likes to talk about it, like some other, some impact you think you might have. Social ventures are organizations that manage and measure and finance themselves in order to have that impact. So you have to build these systems, and here's how you might think about it. I'm going to keep going here. So, the first thing you need to do is you need to decide what you're trying to achieve. And you would be surprised at how little, how infrequently this step actually happens. People think about why this big mission, okay, that's fine, but actually like, what are you really trying to achieve? And there is a framework from the nonprofit sector popularized by Bridgespan, which is called, there's a concept called an intended impact, which tells us who, what, and where we're trying to do our work. And then a theory of change, which is kind of like the link between what we're trying to achieve, and the things that we do. So you just start by building out your theory of change, and increasingly, this is what you're seeing in the impact investing space and in the for-profit social entrepreneurship space is that people are really prioritizing this. Why do we think what we're doing, and we'll see this kind of throughout a little bit, why do we think what we're doing is actually going to lead to the change that we want? Theory of change actually comes from the theory-based evaluation work where you sort of say, what evaluation can I, sorry, what outcomes can I expect to see? And then evaluating to see like, what's kind of my hypothesis? And that's essentially what it is. There's a great article actually by a Booth PhD called "Unpacking Theory of Change," which talks a lot about this, and we can share some of these articles afterwards. So that's the first step, is to develop out your theory of change. The second step is really about building simple data collection activities into the business, and this is really important. It has to be built into the operations of the business. Okay, so I want to just, I want to share with you an example of an organization I think is doing a pretty good job of this, but I'd love to hear if you know of any organizations. So if you know any organization, for-profit social ventures, so there's probably many, many, many nonprofits you know that are doing a good job of this, would love to hear if you know of any ventures, for-profit social ventures you think are doing a good job of impact measurement. Throw it in the chat. I'd love to see what you... 60 decibels, that's a great one. I don't know WEF. I'll still look into that. And please do it to everyone, not just those and panelists. Basecamp, oh that's a good one. They have a whole, they have a very, they have a very strong opinion about that. Patagonia, I don't know, I don't know what the internal metrics are of Patagonia. And I bet they do some good publishing, right? That's a good one. I'll have to look- Oh, World Economic Forum, that's WEF, got it. Great. TBG, yeah, the IMM model. We're going to talk a little bit about the TBG rights when we're talking about the Impact Multiple of Money model. I actually am a little skeptical of it to be really honest, but I'll show you, I'll talk to about that. Lafayette Square, that's a great one. That's a great organization, I have a friend there. They're doing some really interesting things. Oh, Volvo, huh? I'll have to look into that one. Ikea, that's a good one. Great. Keep jumping in if you have other ideas. I'm always interested to see what people are, what people have seen. I mean, part of this is like, you don't always know these are, many of these are like very public companies, or out there, not necessarily public in the stock market way, but public in that they talk a lot about their impact. Oh, the NFL. That's an interesting one. I have to think about that. Fun fact, the NFL used to be a nonprofit a long time ago. Interesting, anyway.

Christina: Okay, so what I want to talk about is LuminAID. So, this is a case study we're going to talk through. So LuminAID is a Booth founded company. The founder, a woman named Andrea Sreshtra came to Booth, she went to Columbia for architecture school. While she was there the first of the big earthquakes in Haiti occurred. This would've been in 2010, 2011. And she and a colleague really were impacted by this, and realized that in a post-natural disaster context, when all the infrastructure, whether, I mean, certainly Haiti is a country without necessarily a widely developed infrastructure, but even in countries with a lot of infrastructure, or like kind of post hurricane Katrina, for example, you lose a lot of that at least easy access or near-term access to that infrastructure, including electricity and light. But because of the way we respond to natural disasters, because part of what you also lose in that infrastructure are things like roads and airports, it is hard to get supplies on the ground in a post-natural disaster context. So the way that most companies, most sort of natural disaster responders, like ShelterBox, Doctors Without Borders, the Red Cross, the way they think about actually solving for a post-natural disaster context is to send food, water, shelter. Actually, it's not in that order. It's water, food, and then shelter, in that order. Those are the three most important things that need to get on the ground immediately. And what is not in that list is electricity, light, flashlights, access to, you know, because why? Generators are large, flashlights or even lanterns are large, and so it's hard to prioritize taking up very, very scarce space on like an airplane or a truck to try to get something that is big and bulky on the ground. And so, Andrea and her friend or colleague at Columbia come up with this idea of a solar powered inflatable light, lantern. So, you can see a couple pictures of this. The picture on the left is their original version. It looks like a pillow, but it actually, that lantern packs down to the size of your iPhone, and it like, it sort of straps together. I wish I had one in, I have a bunch of them in my house somewhere, but it's very small when it's deflated. And part of what they figured out is you could create this very small package, and then you could blow it up and it would create this lantern like effect, and it's totally waterproof. So the image on the left is their first version, image on the right's actually their predecessor version. This one, that one on the, sorry, I guess it's the one on the, sorry, the one on the left is your, is the original version. The one on the right that has the phone attached to it is actually looks more like a box, so this one, that one also packs down. It's a little bit bigger than your iPhone. It's like maybe, but it's the thickness of an iPhone, but it's like a little bigger kind of footprint, and it also, it like blows up so that it expands upwards to create a box-like product that you can then plug your phone into. There's one USB charger. So this idea, so LuminAID was really born of this idea that they could create lighting products that really were particular to people who needed, like lack of power infrastructure. And they did for a long time, I mean, their main customers continued to be the UN, Doctors Without Border, ShelterBox, the Red Cross, Convoy of Hope, but they also do sell to some like hiking and other sort of outdoor. Well, of the reasons they do that is because natural disasters, as you might imagine, are very, they kind of, they're very unpredictable. And so part of what they do to smooth out their revenues is to actually sell regularly to more outdoor enthusiasts, and then they're ready to go, because they have good inventory management systems that allow them to like really ramp up production in a post-disaster context. So, that's LuminAID's great company. You may know them also because they were on Shark Tank and they got invested in by Mark Cuban, which is a very interesting story. And Andrea was at Booth, and then has taken this company and actually sold it a couple of years ago, and continues to be involved. She won the Social New Venture challenge here at Booth in 2012. Okay, so what I want to talk to you about in terms of this case study is like, how are they doing this? So again, first thing is you really need to think about, what are you trying to achieve? What's your theory of change? So quickly on this, an intended impact is really describing your point of accountability, like what is your company going to do, and what are you going to hold yourself accountable for? And then what you need to do is, so once you understand what you actually are trying to achieve, and the words intended impact, you can't be general. You need to be specific, so what are you actually going to do? And then, who are you going to do it for? And what are your most priority populations?

Christina: So, I'll give you an example of LuminAID. So LuminAID's mission is that they're committed to providing light for those without access to a safe, reliable lighting source, right? That's about as general as it gets, and most mission statements are, but the intended impact that they have defined, and this is like a little old, I've talked with Andrea about this before, so the numbers are actually determined by them. But, to make available, let's say, in like a particular year, to make available a million lights and charging products to nonprofits, NGOs, and governments working in underdeveloped communities, especially in disaster relief, education, rural development, and women's empowerment. So that is a different, it's a much clearer. So we know who, right? We know nonprofits, NGOs, and governments are their customers. They're going to work with those organizations, especially in these particular industries. They're thing that they're going to hold themselves accountable for is a million lights and charging points. Very clear, right? It helps you really see what they're trying to achieve. So we have to start there, that's your intended event, okay? And then you build a theory of change. If you're going to do that, you're going to achieve that, what activities do you have to undertake to achieve that? That's what's really important, that's your theory of change. And then once you define your activities and approaches, what outcomes are you going to seek? Okay, so this is an example, this is a center for employment opportunities, this is their theory of change, just to give you another example. So they're a program model, they've got life skills training, they have transitional jobs, they have job placement and they have post-placement support. And those activities drive job readiness and initial engagement with workforce, and those are their short-term outcomes. Really simple, right? And part of this is like once you define this thing over here, your long-term outcome, that's your intended impact. What are you really trying to do? And to be specific about that, part of what you need to do is then back up and say, "What do we need to do? What is our work? And what can we expect to see from that in terms of the outcome?" So, this is a basic theory of change. This is just one, there are many, many out there. And really, the outcomes pieces becomes really important. What you really want to do is think about defining your outcomes in a way that helps you understand how you're contributing to the impact that you'd like to see. And I will tell you, I mean, I worked with hundreds of startups, most startups are unable to achieve this level of sophistication, but it's not that hard. They can do it. It's really thinking about, what is it that we're like, what is that change in behavior status that we're trying to achieve for the organizations and the people that we're working with? So, what is a good outcome? A good outcome is framed in this way. It starts with a directional word, so improve, reduce, advance, lower, fixed, whatever, that's fixed, it's probably not a directional word, but like, whatever your directional word is, combined with the thing you would like to see changed. So, just measuring activities that we held classes, like counting classes, not helpful, that we improve parenting skills is actually what we're after. And there are some basic ways that organizations can do this by surveying, by talking to their customers. It doesn't have to be like some big fancy, pre and post-test thing. Part of this is you're trying to get an approximate understanding of that change in behavior or status. So as LuminAID thinks about this work, their theory of change really prioritizes the activities that they see linked to the outcomes. So this thing on the right, you're seeing this sort of set of image is actually their outcomes. These are the things that they are trying to achieve, and each of these if you go on their website, I think this is still there, I pulled this a couple years ago, each of these things, and you can see that these elements are all, they start with that directional word, for the most part. Like the on the bottom left, improve access to healthcare, health services, right? The idea is that these lights actually improve people's ability to access health services, breaking down barriers for girls, women, and girls, like showing them, that you, a lot of this, their lights get used for helping girls in terms of being able to help people study at night and be safer, right? Especially in a post-disaster context. If there's no light, you can't go outside and walk around without worrying about your safety. So each of these boxes, and if you click on these, they have sort of stories that go along with them, these are great outcomes. Part of what's interesting is that they also have built into their operations elements that may be unique to them simply as a result of the way that they're thinking about their work. Okay, so what does that look like? Here are some of the things that they do. So one thing they've done is they had this Give Light Get Light campaign where people, if you buy one, they will give one, which helps to kind of further their, I mean, I talked about their sort of smoothing their revenue streams by selling to the outdoor enthusiast market, but also they offer people an opportunity to buy two, and make sure that one of them supports some of these outcomes that they're after. They have an NGO subsidy program, so it increases, reduces either the cost per light, and therefore, or they have like bulk purchasing essentially that allows organizations, including some of their big clients, like NGO, the kind of, like I said, the Red Cross or others to be able to purchase in quantity. But the smaller the nonprofit, the more of a subsidy they can get in terms of buying lower cost lights. They do a lot of bringing awareness to the value of light, so part of their work is not just saying, "Hey, we're going to just sell to our customers. We're actually going to go out and talk to people like the Red Cross. The Red Cross is all over the world. We're going to talk to people like the Red Cross and explain why light increases safety and productivity, and why it's really a necessary ingredient in the work we're doing."

Christina: They are not the only ones providing these kinds of products, and I think part of what they're trying to do is actually build the whole sector. And then they do a lot of sales to these large intermediate, larger intermediaries, like I said, the Red Cross. What's interesting about that, and you can kind of double click on that last one, one of the things that they do, they manufacture these in China, as you might imagine, and they have large warehouses where they keep these products, they actually have chosen as a company to keep a lot of lights in storage, to essentially increase their inventory carrying costs as a company, which is like, generally speaking, not something you ever want to do as a company, but they have chosen to actually increase their inventory carrying costs and have unused lights sitting around, because you never know when a natural disaster is going to happen, and so they want to be prepared and ready for that, to be able to ship those lights immediately, and then crank more out, but to be able to have some inventory just sitting there so they can get it out the door whenever a natural disaster might occur. And they don't do that because it's going to make them more money. In fact, it's a drain on their resources. They do that because it's part of what their mission is. So there's these nuances to how the way you run your business in order, so this is really what that theory of change is, like what activities, like why do we need to do these certain things? And these things can kind of feed each other. Like once you decide what you're trying to achieve, you can think about how it's going to impact your activities. Okay, so then you need to build simple collection activities, and there's lots of ways to do this. Certainly you can just actually track activities, thinking about what are those metrics that then lead to the outcomes that you're after. You can look at financial metrics. There are often financial, especially if one sale, the sale of one widget or one light or whatever you're selling is equal to impact, actually looking at financial metrics and who's buying, what the margins are linked to that can often be a great way to understand impact. You can definitely do benchmarking and we will talk a little bit about some of that in a bit. And really in the longer run, I think kind of trying to do a little more on this outcomes basis. So, that's the first part. So first thing you gotta set up the system, okay? Then the second thing you need to do is actually use it. So this is an example of, this is from LuminAID's annual report from a couple years ago. They're reporting data to investors and stakeholders. It helps them increase their accountability for kind of the activities that they've said they want to do, and it really provides some of that transparency. So, this is, again, from several years ago, so it's much older data, not a million lights. They've gotten a lot bigger since then, but this gives you a little bit of a sense of the kinds of organizations that they've been able to get lights in the hand of kind of post emergency response, and that kind of transparency and really collecting this kind of data can be really helpful for our company as it holds itself accountable, and you only can do this by having good measurement systems. Okay, so that's, that is sort of on the social entrepreneur side. It's collecting the data and then using it, and continuing to have that data feed into the decision making that you are doing as you think about the overall work of your organization. Okay, so that's the social entrepreneur side, so I want to switch over and talk a little bit about the impact investing world. So, these are now the people who fund us, so we've talked about social entrepreneurs, and now I want to talk about the people who fund them. So a colleague of ours, Jessica Jeffers, who's at the time was at Booth, and did some work with some folks at Wharton and Georgia State on understanding what's happening in the implementation of contract, contracts in impact investing. So what they wanted to under, they actually looked at hundreds of examples, like real examples, actual documents from impact investors who, and what they were able to look at were essentially their term sheets and their contracts. And so, what they found in looking at these contracts, right, like what gets put in the contract often gets focused on is that the way that a lot of the impact was happening or getting codified was in what they called operational impact. So funds would actually, the investors themselves, as they were making investments in these organizations, and they would look at what was being tracked and measured in their diligence process, and would set up sort of some requirements around impact measurement. I will say, I've seen some of this data that they were working with, and a lot of it was like there's kind of a main term sheet, and then there's an addendum, and most of this work was being captured, the impact that was being kind of captured in the addendum. So it was part of the package, but what they often were looking at is what are the ways in which we can measure the sort of operational impact? So some of that was like, what do we want you to measure? Like identifying, measuring, and reporting on some kind of goals. So again, this is like what I just talked about the social entrepreneurs need to do now, here you're seeing actually impact investors are asking for that upfront as they're making these investments. But there were other things too around like veto rights on changing the business model, thinking about like what other, right, what other sort of rules, rights, and responsibilities they were going to be expecting from the entrepreneurs, from the company in pursuit of impact. There also was sort of this like what the authors of this called kind of aspirational impact, which was much more this like big sort of vision, and not so much, there was not, that aspirational impact was tied down a lot less. So, high rates of operational impact, lower rates of like really this sort of codifying the aspirational impact. And I think you see this in the real world, so this is again from that same recent survey from the GIIN, and this is at like incorporating impact goals into investment terms and the frequency of that. This is from 307 impact investing funds that were self-reported. They are actually codifying impact targets within their legal documents, but that's still only 50%. And there's other things they're doing, thinking about adjusting their time horizon, providing flexible repayment structures, lowering the cost of capital, like those are great, but a full 36% in terms of incorporating impact goals into the actual investment terms are not doing anything. And most, you know, about a half are are doing something. So, it's still a work in progress kind of in terms of what actually gets legalized in the actual legal documents. So much of this then is on kind of the more of a, a, you know, kind of a informal maybe basis.

Christina: Okay, so I want to just, in that informal-ness, I want to have one more poll. This was just sort of because it's fun. What do you think, how frequently do you think impact investors actually measure their social environmental performance? Oh my god, I love it. Nobody has said never, I love that. Literally nobody has said, that makes me happy. Okay. Oh, one person. Oh, slowing down here, so I'm going to end the poll and share the results. So most of you are saying quarterly with a big chunk of annual. I appreciate nobody said, like only one person said never, and that makes me sort of happy to hear, because you would think that there's not very many people that never. Okay, so most people quarterly, lot big chunk annually, some, the other ad hoc. So, let me show you what the actual is. So, quarterly and annually is exactly where you see the biggest concentrations, I think if actually the biggest is in annually. So kind of once a year, they ask their portfolio companies to report, and then they are reporting as well, or they're looking at measurement. Almost nobody is actually never doing it, so there you go, but I think that's where you're seeing, and very few are doing it on an ad hoc basis, which I think is great, which means this both never an ad hoc feel like they're like kind of secondary thoughts, so I think most people you're seeing doing something either quarterly or annually. Okay, so what are people doing? What is the method that most funds, again, this is now we're talking about funds and impact investors, what are they doing? This is from a couple years ago, this is from their June, 2019 survey, the GIIN again. And at the time, so this was a little while ago, but my guess is, and I have a little more data I can show you. My guess is this has gotten a like a little bit better, but most are using qualitative information, so 66% are using qualitative information to measure social environmental performance. Some are using these are using their own proprietary metrics, but they're not really aligning those with internal framework. And this is the one that I think is changing the most, because as more frameworks have started to get put out there and more have gotten adopted, I think you're seeing some movement here in the sort of this proprietary internal metrics. But kind of the big things that are happening even between 2019 and now, so these are some of the big players. If you are interested in this work, I would highly recommend going into this Impact Management Project, their website, and spending a little time understanding this organization. So the Impact Management Project, I believe it's outta the UK, is a group of the kind of the biggest players with the biggest dollars in impact investing. So there are a lot of little funds that are part of the Impact Management Project, but there are a lot of the big guys too. And they have sort of said, and they're mentioned a lot of ways the sort of pusher of this, these words impact management in this industry. They have a set of sort of, I don't like call them something, but I would essentially call them doctrines, like sort of things that they believe, and there are a handful of them. And you can go read about kind of what they recommend, and they're relatively high-level, but they provide some real guidance on, what does it mean? And I think this is kind of that like, you know, if you're going to call yourself an impact investor, you should probably have impact. And so that's where, and positive impact in particular, is really where they're coming out. We want to make sure we're measuring to really understand both the positive and the negative impact of what we're doing, and what we're doing as an investor. So, the Impact Management Project is kind of this high-level orientation, and I think the GIIN is a big part of that and has been doing a lot of work in this area as well. In terms of more the like underlying sort of infrastructure, Impact Management Projects more like a sort of a framework, the infrastructure, the two biggest players in the infrastructure are GIIRS and IRIS. And now IRIS is now called IRIS+, so they've like added a plus, which has to do with some additional standards and reporting. But the way you can think about this is IRIS is like... If you ever spend any time looking at 10-Ks or 10-Qs, which are the publicly reported data that public companies in the United States have to report 10-Ks and 10-Qs. If you look at a 10-K or 10-Q, you will see in there that part of what is required is that every section has a standard definition. So when you look at one 10-K and you look at one for one company, and a 10-K for another company, it's the same definition when they talk about things like inventory carry, or or whatever. Okay, so that's what IRIS is trying to do. They're trying to create a set of definitions for impact terms that are the same for everybody. There's also SASB being the stand, the sustainability, the sustainability, it's like the accounting terms but for sustainability, but that's just sustainability, whereas IRS has definitions that are like those, much wider than that, includes a lot around social outcomes and governance outcomes. Okay, so that's IRIS, is like the definitions. And then GIIRS, you can go to them and actually ask them to rate you, and it's a little bit like getting like an S&P credit rating. You can get a determination from GIIRS about how you're doing. Okay, so these are some of the big, you know, the big players. The other big thing that's happening, and I think this is so fascinating, is the UN's sustainable development goals. And if you were in, if you were, I would like be super interested that I have, next time I do this, I'm going to do a poll on this. Who's heard of these? Because it's becoming much, much more common that people know what this is. So, these are the sustainable development goals. There's 17 of them. There used to be something called the Millennial Development Goals, the MDGs. Most of you probably don't remember that because maybe were, I don't know, it depends on how old you are, but most of my MBA students don't about those because they were millennials, so they were from like the 2000 to 2015 or something, right? Right in there, and the way that the millennial development goals were set up, which is kind of a fun fact, is the UN, like seven people at the UN were like, "We should have some goals that the whole world can get behind." And so they sat in a room, like seven people, and they came up with seven, I think it was seven or eight goals, and they like put them out there. I don't actually know this, but I suspect that even the UN was surprised by how much people got excited about these. So the millennial development goals really had a lot of uptick, and they, people really got behind kind of reporting and thinking about these goals, and thinking about how we were going to get there, and it kind of became this organizing system, so that was the millennial level goals. And then when they kind of came up for renewal, so to speak, and I think it was 2015 was kind of the end of that, the end of those goals with when they wanted to reach them, and they ended up reporting on how they did, and some of them they did better, and others they did worse.

Christina: Anyway, the UN undertook a much more comprehensive process to come up with this sustainable model goals. And this is really what you see are these seven teams, so it was very collaborative process, not just seven people sitting in a room, which is probably the best, but really collaborative process across many organizations to kind of come up with these goals. And what's particularly cool about these goals, and you can go on their website and play around with them, if you click on say number nine, industry, innovation, and infrastructure, behind each big goal are a set of outcomes that they're after, and a set of metrics, remember, back to our theory of change, right? So, a set of metrics that guide those. So part of what you can do is you can think about, okay, if I am going to, what a lot of organizations will do is they'll be like, "I'm going to claim my organization is working on like 8, 9, 10. Those are the three things that most align to what I'm doing." And then what you can say is you can start to report, because you go in, you double click on number nine, and you see like, these are the outcomes. Okay, I'm going to start tracking those outcomes. Here are the metrics that correlate with those outcomes, I'm going to start tracking those metrics. And then you can actually report to, there's each of these goals has kind of a home agency where you can report your data. That's very cool. It's kind of the first time, I mean, I've been doing this work for, I don't know, 25 years or whatever, it's the first time I've ever seen a, any kind of consensus about what we're measuring and what we're after as like, globally, I mean, and it really is globally. So this is something worth understanding more, and I think one of the things you can see in the data, so this is back to that same survey, it's really the SDGs and IRIS+ that are gaining the most traction. So, what this is this is the survey, the same survey from 2003 that I showed you earlier from the GIIN. This is they're asking this question about use of standardized frameworks and principles, so as a kind of framework for guiding strategy, you see, I know like the number is really tiny. I can't get it to be bigger. I think it says 76% are saying they're using the UN STGs as a guide for their strategy, which is great. Then you also see these info, so there it is impact management norms, so that's not doctrines, norms, although I would say the UN SDGs are much clearer and much more detailed, the norms are a little bit more high-level, so I think you're really seeing these two types of frameworks kind of lead the pack. And then in terms of tools and systems, IRIS+ is just like the breakaway winner, relative to any of the, like the GIIN has their own reporting, and not actually, the GIIN helped to create IRIS+, but sorry, not the GIIN, the Global Reporting Initiative, SASB, there's a bunch of others, but you're really seeing IRIS+ kind of be the breakaway underlying infrastructure that's being used. Okay, last thing, and then how am I doing? Am I doing okay on time?

Kara: Yep, absolutely. We have great questions, so we'll do those at the end, thanks.

Christina: Great, so last thing I just want to bring up is this Impact Multiple of Money. Someone mentioned this in the chat. So, this is another framework that's getting some traction, although I would say really with much bigger funds. So this was developed by the RISE Fund, which is a PE platform, so private equity platform, and developed with, in conjunction with Bridgespan. And the idea behind the Impact Multiple of Money is that you use a theory-based approach, so you sort of say, "Okay, in theory, what kinds of outcomes would I expect from the literature?" I'll give you this, this is the example comes from the article about this. So they, the RISE Fund is an investor in EVERFI. EVERFI, it provides online training for a whole host of types of interventions, and one of the interventions that EVERFI offers, one of the products is called Haven. Haven is a online training to try to prevent sexual assault, in particular with a focus on college campuses. So, we know from data that 10.3, and this is in the US, 10.3% of undergraduate women, and 2.5% of undergraduate men experience sexual assault every year, and so Haven is designed to try to prevent those encounters. Okay, so we know from according to, so this is the way the Impact Multiple of Money works. I'm going to explain this. So, what they start with is the data, the research. So according to a 2007 study that evaluated the effects of an in-person course on preventing sexual assault that was taught a northeastern United States University, people who got the in-person training at that university saw sexual assault at the university decline 19% for women, and 36% for men. That's amazing, that's great. We want to see those kinds of results in interventions. So then what EVERFI is saying is, okay, well we know this in-person training in the northeast had these impacts, so let's try to understand, if we know they did, how do we extrapolate that for our own, to quantify our own impact? IE, to create a Impact Multiple of Money. So, this is essentially what they do. So what we know is, sorry, that's a K, should be an M. Data tells us that an intervention that, like if you can reduce sexual assaults, for every sexual assault you reduce, you save 3 million in sort of savings to society. So you try to quantify what the savings to society is in the context of that intervention, and we know that 10%, 10.5% of those receiving this, receiving the benefit actually, or benefit from the intervention, and the company reaches 3 million people. If you multiply those things together, you essentially get a value for every dollar invested. I'm sorry, hang on. You first you have to multiply these, and then you have to divide by the amount of money that was required to get to that point. So if it took $20 million to get to EVERFI breakeven, then you say it's $20 million. So you take the value at the top, and then in the numerator, and then you divide by the amount of money it took to launch the company, 20 million. The impact multiple money is 47,000 for every dollar invested. And I made these numbers up, just to be clear, like these are totally made up. But just to give you an illustrative example of how you would create, how you would calculate an Impact Multiple of Money. And if you're the investor, and you put in 25% of that 20 million, you get to claim that 25%. So, that's the Impact Multiple of Money. I think it's a really clever idea. I think what is challenging, and I think this is something that the RISE Fund is trying to do better at, is, you know, EVERFI is, or Haven is a program that is online, right? Not in-person, and the last I checked, the northeastern United States did not look like the whole rest of the United States, and so you're departing from the data about a particular place in context to make an assumption about what's happening everywhere with an online course. And so, the thing about an IMM is that the, you have to have good underlying research that very closely linked with your theory of change at your particular investment in order for it to have meaning, because otherwise, it's just garbage in, garbage out. So it is something that's getting subtraction, the problem I think with this is that you have to have this clear, like the research has to be pretty aligned for it to really be meaningful. Okay, so my last point is just to say all of this is critical, both what the social entrepreneurs are doing inside their organizations, and what the impact investors are doing in terms of impact management and measurement, because it's a critical management function, it's a critical thing we need to do, because without it, a little bit of this like, if a tree falls in the forest doesn't make a sound, if we're an impact company, if we're going to claim to be an impact investor, we're going to claim to be an impact company and we're not measuring and managing our impact, then are you really an impact company? So it's all in the DNA of the company, and really kind of doing that measurement work. So, that's what I got. I will stop sharing, and I'm happy to take questions.

Kara: Yeah, thank you. I'll let you catch your breath for a second. That was really fantastic. Thank you, Christina. So I'm going to do a couple in the chat, and then it might be helpful if you just want to look at the Q&A yourself, Christina, because some are kind of long, and some acronyms, things like that. But there's a comment on in the chat maybe about 10 minutes ago or so, "Comparing the aspirational and operational impacts or valid indicators of achieving the intents, are there certain approaches to do such comparisons?" It's on the right-

Christina: I didn't totally understand the question.

Kara: Yeah, that's okay.

Christina: But the...

Kara: It's from Dr. Bermane, if you're still on, feel free to repost on the right there.

Christina: Are there any aspirational, operational. Yeah, I think the thing about the aspirational impacts is that they, what the researchers found in the data was an aspirational didn't have much, like, it wasn't tied down, it was sort of more like a mission statement. You know, "We're going to end hunger, we're going to, you know, whatever, solve poverty." And it was much more of the operational impacts that actually gave grounding, but there was a pretty wide difference between those, right? The operational impacts are going to be much more like basic, so, yeah, I think that's where you're seeing some of the differences in terms of what those two different kinds of codification in the legal document is. Okay, so. So we talked-

Kara: The first one that was right at the beginning of the presentation.

Christina: Yeah, and we talked a little bit about the STGs. Yeah, I'm like a big fan. I think what's hard about the STGs, and now you'll see, I mean, I don't know, I spend a lot of time in this space, so I see them everywhere now. I mean, they're just like, it's like when you buy a blue car, then everyone has a blue car. You know about the STGs, and then you see them everywhere, and people are putting them on their website and talking about how they're aligning their work to these like, the little boxes. The problem is I think a lot of people are skeptical. It's an easy thing to be like, "Oh yeah, I totally do the STGs, like I had this," and not actually do the reporting work, or aligning your work to the measurements. So it's, like a lot of things, it's in the details. Impact investing firms can effectively gauge impact derived from second level beneficiary. Yeah, actually there's a great, so the one of the questions in the chat was about the sort of second level beneficiaries, or what I sometimes refer to as value spillover effects. So there's actually a great, it's old, and here again I'm happy to share, we can go back and sort of share articles if people are interested in the details, but there's a great article called like, "Making Hybrids Work," and there's a framework that talks about how aligned are your customers and your beneficiaries? Like, is the person who pays the same as the person who receives? So that's like one dimension, either they're the same or they're not. And then it's a question of like, is the benefit you're getting direct? So think about like, if it's a healthcare intervention, you get the healthcare, you are better, like it's immediate, it's direct. Then there's value contingent spillover, they like spillover effects. So, spillover effects are like, microfinance is a great example of this. If you get a loan, the thing they do, if you get a loan, like that's nice, but it doesn't actually create the impact you want to have. The loan helps you improve your business, and by improving your business, then you can do things like invest in your kids' education, invest in your house, have a safer house, move to a nicer place, whatever. So these are these kind of spillover, and what you have to do to the question that was asked, you gotta track those spillover effects. So thinking a little bit about like, are your impacts direct? For every widget you sell, you have a direct impact, or is there a couple of steps forward? And if you're going to do that, I think this is why microfinance has had, microfinance as an industry has had such a hard time quantifying its impact, because much of what it does is actually a spillover effect. Okay, there's question about traditional corporations utilizing frameworks for measurements CSR. I mean, I see very inconsistent use of this. I mean, I think quite frankly, like, we're just trying to get the impact investing folks to do it. I think you see, like the CSR as a whole other world. If anything, I think where you're seeing public companies align is much more on the SASB, like the sustainability standards, because, I mean, it's like not just coming, it is already here that the companies, public companies in particular are going to have to report on their environmental impacts. That ship is like not just, like it set sail and it is like coming into the harbor. So, when you talk about traditional companies, I mean, that's just coming down the pike quick. They tend to use more the SASB, the the sustainability standards, because it is just focused on environmental impacts, and it is focused on sustainability. Okay, intersection of sustainability and mission driven ventures. How can organizations effectively balance profit and purpose?

Christina: Onuh, is that how you say your name? Onuh? I spent a lot of my energy, my brain energy thinking about this question. I actually wrote an article for the Booth Review on this topic of how as a manager do you keep your team all rowing in the same direction when it comes to this purpose and profitability? And I was on the board of a company, actually a company that came out, another one that came out of Booth, and I spent a lot of time, and I talk about this in my article, I spent a lot of time working with the CEO on this problem, because invariably, there are people on your team. So even if you as the leader can kind of hold these two ideas at the same time, frankly, like in a lot of ways, some of your team is going to pull you more towards the financial profit side, and some of your team is going to be pulling you more towards the impact side, and they both are there for both reasons, but invariably, you're going to get pulled. And so part of what you have to do, and so I'm going to talk about this a little bit in the article, you have to teach the other side why the other one's important, more or less. So on the impact side, you have to explain to the impact pulling people that if we don't make money, we can't do any of the impact. And you have to show them, you can't just tell them that, you have to show them in the numbers, explain how the numbers work, and help them understand levels of threshold where numbers get to be too important, versus where impact gets lost. So, that's the impact side. On the financial side, what you have to explain to them and show them in the details is that if we screw up the impact, we will actually destroy the financial value of our company, that the financial value of the company and the impact are actually tied together. And so you can see these numbers in the financial statements will go down if we essentially screw up the impact side, and we therefore lose trust, lose credibility, lose our reputation, lose our team, et cetera, et cetera, customers. So a part of what we need to do is actually come at helping people on your team understand both sides by helping them see why what they care about will be impacted by the choices that they make in the kind of day-to-day decision. So, that's in the Booth Review. I just summarized the article, but you can read the whole thing. I think it's great.

Kara: I can pull that and post it, yeah. Just a couple from the chat, I can just read a couple quick ones probably. Do you see data scarcity being a common barrier for measuring outcomes?

Christina: The sort of scarcity piece imply, to some extent, implies that like, you're only looking at data that's sort of out there. Companies have tons of data internally, and that's mostly what they're using. So, I don't think data scarcity is the issue, I think data, willing to mine your own data and investing in mining your own data is probably the bigger barrier.

Kara: I'll read one more, and then you can go back to the Q&A. I'll pull some links to Chicago Booth Review. What role can or should AI play in impact investing, such as measurement, any innovations? Are there any innovations happening in the industry? It's kinda a two-part.

Christina: Yeah, so I mean, AI is everywhere. I spend most of my time in this, in sort of impact investing, social entrepreneurship, social entrepreneur or social venture space, but I do spend a little time working with our traditional ventures. I mean, you're not, like, I don't know how any of you are in the venture capital space right now, or private equity for that matter, those markets have really dried up. There's not nearly as much money going out the door as there used to be, and sort of a slip. But the companies that are getting funded are those with AI, like almost everybody's got AI in what they're doing now, it's just in inevitable. What's interesting when you like, like the intersection of measurement in AI is, what people are starting to talk about is doing like predictive, so the Impact Multiple of Money, which we just walked through, is essentially a way of thinking about predicting impact, and what is AI and or machine learning, but predicting what's going to happen? So, this idea of like a theory based, so understanding what's the theory behind, "If do X, I will get Y," and getting better and better at that through the sort of machine learning or AI tools that we have available to us now, being able to predict, and therefore being able to make better investment decisions, make better decisions in our companies about where we put money, because we're able to see what that potential impact will be. And then you have to kind of follow up and make sure it's happening, but that's kind of where I see the intersection. People are talking about like predictive impact and predictive analytics for impact, like if you go on the Stand for Social Innovation Review, you can read a little bit about that. Okay, I'm going to do one that's not about this topic, but interesting one about an MBA.

Kara: Yeah, I was going to ask that at some point anyway, that would be really great.

Christina: So, somebody asked this question about going into for-profit impact with or without an MBA, what type of person do you think makes sense for to get an MBA first, and then the biggest benefit of an MBA? So, I really, I don't, you know, I am biased, obviously. My belief is that it is the tools you learn in business school today that are the most needed in the sector. Whether we're talking about the for-profit social ventures or the nonprofit sector, or quite frankly the traditional profit maximizing sector, what do we need to do to solve like, you know, the world has a lot of problems, which I often will break down into just two, which is climate change and equality. At the end of the day, that is probably the two giant biggest forces, and many of the other problems that we see in the world. And we need a lot of, we need a lot of smart people to help us move the needle on those two issues. When you think about what it is that needs to happen to move the needle on those issues, we need more resources going into those to solving the problems. And quite frankly, we need to be much more efficient in how we tackle them. So it's not just more dollars, it's actually like how do you ring out of every dollar that's available more impact? So that's about efficiency, that's about use of data, that's about operations, that's about supply chain. That's about how you use your financial management tools to be able to understand, like it's, you know, if we teach you anything at Booth, it's that stuff for sure. The other piece of it is that we need to know what we're doing is working. We need to prove the efficacy of what we're doing, and we need to keep doing that, and we need to keep managing to that. And again, same idea. Having the tools to be able to understand, what am I trying to achieve, and am I doing it? Those two pieces, proving efficiency, I'm sorry, improving efficiency, proving efficacy are the exact things that you learn in business school, and I think more and more those tools, whether you want to go work in no profit or for-profit, you want to do something into corporate responsibility, or just like embedded in a company trying to help make it a traditional profit-maximizing company better, or even the government, right? I mean, we need those tools. So I'm a big proponent, again, I am biased, I will admit, but I've been following the sector for a very long time. I think more than ever, it is those tools that are really going to drive change. So, I don't have a strong opinion about the second part of this question, which is the type of person that makes sense to get an MBA first. There's lots of reasons I always advocate that you should get an MBA because you know what you want to do with it, not just to get an MBA. So that's my opinion, but I think we need more people who care about the big issues that have the tools that we can teach you in business school to be in the world.

Kara: Yeah, and that's a lot of what you're saying is I have to think the impetus of our Civic Scholars Program back in 2016 with the Neubauer Family Foundation, who funds that for those to have more people, great leaders with these backgrounds and skillsets in nonprofit and government, again, I talked about the beginning, I can repost those links as well. So, I really appreciate that answer. So I will, yeah, probably have about 10 more minutes, and then, so you can-

Christina: Yeah, I'll try to do a couple more. There's a question about kind of which reporting standard to follow. I would ask the other people in your peer set which, what they're doing. If you're focused on energy climate, change in sustainability, I mean, I think IRIS+ is probably the one that's going to win. That'd be my guess over SASB, and I think, again, I thinks SASB's going to be much more important when it comes to like, the public companies and public company reporting, and the SEC, but if you're a relatively small company, and you're looking for in VC or impact investing dollars, I think IRIS is the way to go. Don't quote me, because I don't actually know what the right answer is, but what I would suggest to you do is talk to some of the people in your peer set, talk to some of the investors that you're interested in trying to, like maybe the next, like in the next round of funding that you might want to get and ask them, what are they looking for, or what are they using? Charles, I wish I could tell you how to measure the social impact of building hospitals in rural areas, I do not know enough about rural areas. That's a big, like rural United States, rural India, rural Vietnam, I don't have any idea, and the sort of, like building hospitals, and I think one of the things I will say in general is that if you don't have a theory of change, if you don't know what outcomes you're after and why you're doing what you're doing, then you can't build an impact measurement system period. So if you do nothing else, at least start with why are you doing what you're doing? Like why is building hospitals in rural areas important, and what does that, like when you do that, like what outcomes are you expecting? And that's the sort of underlying, and the Bridgespan group, even though much of the work is really designed for nonprofits, you can go into Bridgespan, you can just search Bridgespan, theory of change intended impact. They have like a whole cache of resources that you can use to do that work, and you can, there's Stanford Social Innovation Review also has some good resources on the application of theory of change to impact investing and social ventures. Okay, let's see. Are there others in the chat, Kara?

Kara: I'm not seeing anything in the chat, and I've just been posting a bunch of links too to Rustandy, the SNBC to Chicago Booth Review. So, I'll keep scanning if you want to do a couple more from the Q&A.

Christina: Yeah. So Puja, there are operational mandatory regulatory reporting submissions for impact measurement, no, not in the United States. There's some proposals in the UK, is my understanding, and they really have to do with tax incentives. So in the UK, there's some special tax incentives if you want to be an investor in impact companies. We do not have those in the United States, but no, there are not any current like, or mandatory, regulatory, whatever submissions. There are starting to be in the, and again, in public companies, the SEC is creating new guidance about what public companies have to report, particularly in their environmental risks. And that is like, I don't follow it closely enough, but there's been a lot of movement there. So, that's the only place where you're seeing requirements. Let's see, companies already, if company product already provides some form of impact, for instance, Starlink, necessary to measure impact, I think it's always necessary to measure impact for this reason, which is... Well, first of all, I said this already, you can't call yourself an impact company if you don't pay attention to your impact, period. You don't get to, that's not how this works. Social ventures are those that are managed, measured, and governed, and financed, but managed, measured, and governed to actually achieve some outcome, to some social or environmental outcome. So if you're not goin to manage, measure, or govern in a way that does that, then you can't call yourself an impact company. You're just a company that happens to have impact, because that's really what management is about. That's my opinion, and I think that's what you're seeing, the whole of impact investing, the world, the whole impact investing world is like, "Oh yeah, we gotta start doing that." We really have to with it be more serious about the word impact, and like actually have some proof. So, you're talking about a company that has some product where the impact and the product like go together. You don't have to get crazy about your impact measurement, but you should probably count the number of products you sell, who's buying them, and what segments. Invariably, you might have different segments. If you have a product that creates more impact for women than men, and you have a very small number of women, maybe you want to spend some time trying to grow that market share with women. So you can't do that, you can't think about those questions, about the way your product has impact if you don't actually know where it's going, who it's having impact on. And again, this all goes back to, was your theory changed? So I'm not advocating for like, spending tons of money, or being super crazy about building some like system for measuring impact, but if you're not doing the basics, then I don't think you get to call yourself an impact company. So, for what that's worth. Okay, let's see. Data scarcity, emerging trends. Let's see. Do you perceive a gap between the US versus the EU and UK new legislation requirement? Yeah, actually, it's interesting. I mean, I think the UK has been ahead of the US in impact investing really since the beginning, even though the term was actually coined by an American, on kind of behalf of an American organization. I actually think the UK really took a huge leap forward, and they have a little more incentive, like tax incentives. They've got a little more robust sort of infrastructure there. I don't know why that is. I mean, part of it is just, there's a guy there, a guy named Ronald Cohen who kind of made it his thing for a while, as it really like propelled the UK. So, there is some differences. There's actually, if you look up Impact Alpha, which is that newsletter, if you go into their website, they actually have, someone wrote an article about the differences between the UK and the, the differences between the UK and the US in terms of impact investing, and I know this in particular, because I was just teaching actually, we're talking about impact investing next week in my class that I teach here. And there's how impact venture capital differs between the US versus Europe. It's from October 5th, 2021, Impact Tech, but it's the, and it's written by this guy Paul Miller who runs an an organization called Bethnal Green Ventures. So, he lays out some of the key differences, and I do think there's some key differences, particularly I think they're ahead of us in the US. You see much less activity on impact investing in Asia and in Africa broadly. There is absolutely activity, I actually think Africa is like kind of catching up quickly, but different parts of the world, and there's like a lot of nuance to that. So, yeah, I do see some differences. What else we got? These are like, some of these are very specific.

Kara: Good questions, for sure, you can answer. Great audience.

Christina: Yeah, I mean, this is what we want to see in our MBA student. My favorite students are the ones who ask really hard questions. What tools from the, and I'll take the last one, what tools from the MBA have you used most since leaving the program? You know, I mean. For me, like I'm just like, I'll take the last two minutes to tell a little bit of my own story. I kind of ended up in community development accidentally. I wanted to do something with impact, but I really ended up in that for-profit social venture space sort of an accident. A recruiter ended up finding me, and whatever, whatever. And I went to business school a couple of years, I still worked for a few years, and then I went to business school, as I said, part-time, and it was totally transformational. It changed my life, and I went to the university to go undergrad. It wasn't like I didn't know economics or like whatever, but business school in particular was transformational. And I think, we talk about the idea of not teaching you what to think, but how to think, and I mean I think the frameworks and the way that I could approach problems, I mean, I would literally go to class, at nine o'clock, I'd be done with class, and I would go home, and I would totally change a presentation I was about to get the CEO the next day because of something I had learned in class. That happened multiple times over the three years I was in school. So, for me, it's hard to really distinguish one thing that, I mean, I have many friends from the program. I think that the network has been a huge value add for me. Booth people tend to be very supportive of each other. That probably happens in lots of alumni groups, but I find that Booth people are really willing to pay it forward and almost always talk to you. But I would say the thing that I most personally took away is how to think about hard problems, and it's like a combination for me of clear frameworks. So I just gave you a bunch of frameworks, like the theory of change framework that I talked about the hybrid framework, like there's some really clear ways to organize your thoughts that I think I got a lot of when I was in business school, but it's then, like how do I ask the right questions and how do I think about the right data to put into those frameworks that really helped me to be a much, so I was an operator for years. I built businesses, I developed products. I still think of myself as an operator and a manager, and I think those tools have continued to be the most beneficial for me, and it's something I try to bring to the classroom, because I think that's what people need. I mean, you got a pretty good sense of my style in today's class, and this is what I teach. I mean, I try to help you think about what are the frameworks that are actually going to help you organize your thoughts, and then what do you need to put into those frameworks in order to actually get the outputs you want? So, that's what I would say. Good luck to everyone on the call, and your pursuit of an MBA. Maybe I'll see some of you in my class someday. Thanks.

Kara: If you happen to be around, it is open for visits this quarter too in the evening program. Keep that in mind. So, thank you so much, Christina. That was a phenomenal session, and we'll continue having sessions under this topic, so keep an eye on the masterclass site, and thank you all for your time today, really appreciate it. Please stay in touch. All right, thanks. Bye, everybody.