In my life’s journey prior to Fuqua, I worked as a consultant, (aka hired brain) in the public sector. My work involved advising urban school districts in how to best efficiently use their resources. Through this work, I saw how conversations were sometimes asking “How do we survive with what we have” instead of “How do we innovate?” That’s when the lightbulb went off in my head and I became interested in the fields of philanthropy and impact investing as ways to nurture innovation in the social sector.
Unfortunately, I had zero experience with impact investing! If anything, those two words, “impact investing” felt like a distant hashtag that had magically appeared in the circles of the impact-minded. That’s why I decided to pursue my MBA at Fuqua with a concrete goal of participating in its CASE i3 Consulting Practicum (CASE i3CP). This program pairs a team of select MBA students with an impact investing question that a company is wrestling with. I knew that it was the experience I needed in order to learn more about this space. After half-a-year of hard work, my CASE i3CP journey is ending. As I reflect, I wonder about how I would respond if an employer or classmate asks about my CASE i3CP experience and what I got out of it. My first reaction would be to smile, and then I would share 3 key things that I took away from this amazing journey:
1. Gaining Hands-on Experience Developing a Real Impact Investing Deliverable
One of the most important things that I took away from CASE i3CP was the hands-on experience of developing a real impact investing deliverable that will be used by our client.
For context, my team’s client had recently started diving more into the catalytical capital side of impact investing. Catalytic capital, in a nutshell, means more impact-first investments, that will help attract more future investors. Therefore, our client partnered with CASE i3CP and asked that my team research innovative finance mechanisms such as blended finance, social impact bonds, guarantees, and income/revenue sharing agreements. The goal was to develop a report for our client that would address the definitions, structures, impact returns/risks, and financial returns/risks of each of these mechanisms.
In the end, we wrote a 60-page report that covered each of these topics and provided our client with helpful due diligence questions for when they consider investments in these innovative finance mechanisms. I went from having zero experience in impact investing to crafting due diligence questions and condensing complex information to be read by investors, advisors, and their clients.
Our client responded to our final report by stating: “I cannot emphasize enough what a great value-add this is for our strategic work moving forward. The concepts you all untangled and have offered concrete analysis on are complex and difficult for most people to understand.
2. Having to Get Smart, Fast, on Impact Investing
To best serve our client, my teammates and I had to get smart, and fast, on impact investing. We achieved this in part by attending several training workshops led by Professor Cathy Clark. In these workshops we explored topics such as the size of impact investing and the spectrum of investors. One of my favorite learnings from these workshops was how the words “impact investing” can mean several things in terms of desired returns/risk/impact and that the actors who pursue impact investing can be very different. For instance, I enjoyed learning about the nuanced differences between CDFIs (Community Development Financial Institution), VC Impact Funds, and socially responsible investment funds.
In addition to Cathy Clark’s workshops, my team got smart, fast, by dedicating countless hour to desk research. My specific portion of our project was focused around Pay for Success investment vehicles, such as Social Impact Bonds (SIBs). I recall how I spent copious hours analyzing and perusing reports published by organizations such as The Brookings Institution, Nonprofit Finance Fund, and The Federal Reserve Bank. We also studied the ins and outs of several SIBs and development impact bonds (DIBs). One specific DIB that I loved learning about was the Quality Education India Development Impact Bond. This $9.2 million DIB “Aims to improve education outcomes for over 200,000 primary school students over a four-year period from 2018 to 2022.”
Through the workshops and desk research, my team and I gained deep knowledge on catalytic capital and impact investing.
3. Accessing Experts and Practitioners
Once we got smart, my team and I had the opportunity to interview experts and practitioners in the field of impact investing, (specifically within catalytic capital). Our desk research paid off. We were able to have complex conversations with experts in the field.
I personally had the opportunity to speak with practitioners who have played a role in structuring renowned social and development impact bonds. Through these conversations, we obtained real-time data on the field and where it is heading. Having these conversations will forever be a highlight of my experience. When else will I have a chance to geek out about such a fun and exciting topic with others who are just as passionate as me about impact investing and catalytic capital!?
As I reflect on CASE i3CP, I am taking away so many learnings. I was able to (1) Obtain hands-on experience with impact investing, (2) Get smarter on impact investing, and (3) Converse with some amazing experts. On top of it all, I had the chance to work with an amazing team of classmates who also cared deeply about social impact. I definitely recommend CASE i3CP to all Fuqua students who are even slightly interested in learning more about the hashtag #impactinvesting.