I used to think ‘impact’ was something easy to see, to define, or to quantify. My first year in the Community Development and Action Master’s program taught me quite the opposite. ‘Impact’ can either be easy or hard to define, depending on who you are
talking to or what you are talking about. That’s why when I learned about the opportunity to participate in an Impact Investing competition, I knew I had to apply. MIINT, the MBA Impact Investing Network & Training competition, is an annual competition held where a $50,000 investment to a social enterprise sits on the line. Teams that advance to nationals pitch a social enterprise to experienced impact investors, with one winner taking home the prize. I was interested in MIINT for two reasons: First, my last job had been for a company that invested in early-stage health care companies, so I had some experience in this field. Second, I was immensely curious to see how impact was defined and more importantly, how it was pitched to real investors.
Throughout the semester, my team and I researched local social enterprises that met deal criteria, conducted due diligence, and worked on how we would pitch the company. A learning moment for me, and perhaps all of us, was that instead of pitching the company, we really needed to pitch the deal. How good of a deal was our company from both an investment perspective and from an impact perspective? This gave me the first clue as to how these investors would look at impact. Basically, they wanted quantifiable and scalable impact – two great things to look for in a social enterprise. However, impact can be so much more than just what you can count or what you can see.
At the conference, we listened to about 12 of the other business schools pitch and got to hear the judges questions. There were 15 minutes for questions, and the judges ran out of time for every single presentation which goes to show they were not leaving any rock unturned. However, a large percentage of these questions revolved around the financial value and it was rare to hear a question about the impact. The presentations covered the impact, but at a surface level, leaving lots to be desired. I absolutely understand the need to really dive into the financials and the business operations, but it seemed to me that the impact side of this impact investing conference was left on the backburner.
Like I said, impact is a hard thing to define but it doesn’t become hard until you start to see the ripple effects that take place in people’s lives due to seemingly small actions. I work with the formerly incarcerated population at Project Return and they are constantly asked to define or quantify their impact. Some impact, like the number of people who get jobs after coming to us, is easy to see and to count. But that job is so much more than a number. For so many, it’s a way to transition from living at a shelter to renting an apartment. It’s a way to regain custody of their children, or start saving for a car. Many social enterprises are engaging in impact that ripples through the lives of the people they touch, and while that makes impact harder to count or harder to prove that it exists, it also makes it so much more valuable. Impact investing need not shy away from impact simply because it’s complicated, but learn about the systemic problems that make it complicated and then use the power of investment to address them. Then we can move toward true and lasting change.