20 Years of Impact

Impact Investing

During the past decade, a new breed of philanthropist-investor has been driving experimentation to foster novel forms of financial intermediaries and instruments, which has resulted in a vibrantly changing landscape of financial flows in search of social returns. Building upon prior research on venture philanthropy and social capital markets, SEI launched the Forum on Social Impact Investing in 2011 to pursue an action research agenda in conjunction with leading practitioners. This research has led to the development of multiple papers and course notes, a project-based field course, and a case-based course module designed to examine the mobilization of financial resources for social change.

Research Spotlight: Impact Investing

Socially-oriented investors are increasingly demanding opportunities to invest in projects that yield both social and financial returns. This emergent field of "impact investing" requires new financial models, new social metrics, and new regulation. At HBS, our academic research has focused on developing rigorous methodology to evaluate the benefits of social enterprise; while our course development focuses on creating frameworks to implement and manage impact investments-all with the goal of helping an important new industry take off. This is a truly collaborative process and requires working closely with our alumni and leaders in the field.

SEI faculty have created an Impact Investing Course Module (pdf) to assist instructors in designing a unit focused on this burgeoning field. The module includes a combination of cases and supplementary readings along with a brief teaching rationale.

For more on our recent work on impact investing, visit our Business for Social Impact page and view the Business for Social Impact Forum Summary Report (pdf) session on impact investing.


“We need to be a force in drawing more people into being less risk averse, to try the new things that we need in order to create social change. And I think HBS can be a force in driving that change.”

Alvaro Rodriguez Co-founder and managing partner of IGNIAMBA 1995

The Future of Impact Investing

Opening remarks from Sir Ronald Cohen, MBA 1969, at The Future of Impact Investing: A Conversation with Sir Ronald Cohen and Top Leaders in the Field.

Alumni Initiatives

Alumni working in finance and impact investing describe their organizations' goals and give examples of specific projects, including providing working capital loans to small businesses in India, funding partnerships to bring electricity to remote villages in Africa, and bringing personal finance services to residents of the largest slum in Mexico City.

Challenges Ahead

Alumni working in finance and impact investing discuss the field of impact investing and some of the challenges that lie ahead, including developing tools and standards to measure impact, justifying the financial returns, and how to mainstream impact investing into more traditional financial markets.

Measuring Success

Alumni working in finance and impact investing talk about the difficulty of gathering and producing credible data to show the benefit of impact investments given the range of industries affected and types of services provided.

 
 

Alumni Making an Impact

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Daniella Barone Soares CEO, Impetus Private Equity FoundationMBA 1997

"We invest in high-potential charities to support them in developing a long-term strategy that incorporates sustainable income generation, including social investment."

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Lisa Hall Managing Director of Impact Investing Anthos Asset Management B.V. MBA 1993

“I feel like it's such an honor and a privilege to feel like I'm using the skills that I learned from HBS and throughout my career in finance for good.”

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Fran Seegull Chief Investment Officer and Managing Director ImpactAssets MBA 1998

“I wanted to understand how to use the financial capital markets and for-profit mechanisms to move the dial on the world's most pressing problems.”

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Featured Research

Note

1996

Dees, J. Gregory. Social Enterprise Spectrum: Philanthropy to Commerce Harvard Business Publishing Note, April 1996. Subjects covered include: social responsibility and social services.
Article

1997

Grossman, Allen. "Virtuous Capital: What Foundations Can Learn from Venture Capitalists," Harvard Business Review 75, No. 2 (March–April 1997).
Article

1999

Porter, Michael E. and Mark R. Kramer. "Philanthropy's New Agenda: Creating Value," Harvard Business Review 77, No. 6 (November–December 1999).
Working Paper

1999

Grossman, Allen. "Social Enterprise Series No. 12: Philanthropic Social Capital Markets: Performance Driven Philanthropy," Harvard Business School Working Paper, No. 00-002, July 1999.
Article

2001

Austin, James. "The E-Philanthropy Revolution Is Here to Stay," Chronicle of Philanthropy (March 2001).
Article

2002

Porter, Michael E. and Mark R. Kramer. "The Competitive Advantage of Corporate Philanthropy," Harvard Business Review, December 2002.
Article

2003

Quelch, John A. and V. Kasturi Rangan. "Profit Globally, Give Globally," Harvard Business Review 81, No. 12 (December 2003): 16–17.
Article

2010

Battilana, Julie and Silvia Dorado. "Building Sustainable Hybrid Organizations: The Case of Commercial Microfinance Organizations," Academy of Management Journal 53, No. 6 (December 2010).
Article

2010

Kaplan, Robert S. and Allen S. Grossman. "The Emerging Capital Market for Nonprofits," Harvard Business Review 88, No. 10 (October 2010).
Note

2012

Leonard, Herman B. "Dutch." Frameworks for Dialogue and Research about Social Impact Investing Harvard Business School Technical Note 312-091, May 2012. Subjects covered include: balanced scorecard, development stage enterprises, entrepreneurial finance, entrepreneurial management, entrepreneurs, financial instruments, and performance measurement.
Note

2012

Rangan, V. Kasturi, Sarah Appleby, and Laura Moon. The Promise of Impact Investing Harvard Business School Background Note 512-045, February 2012. (Revised July 2012.) Subjects covered include: social enterprise.
Article

2013

Sir Ronald Cohen and William A. Sahlman. "Social Impact Investing Will Be the New Venture Capital," Harvard Business Review Blog, January 2013.
Note

2013

Grossman, Allen, Sarah Appleby, and Caitlin Reimers. Venture Philanthropy: Its Evolution and Its Future Harvard Business Publishing Note, June 2013. Subjects covered include: nonprofit organizations and philanthropies.

Classic Cases

New Profit, Inc., (Heskett, James L., J. Gregory Dees, and Jaan Elias, 2000). Subjects covered include: balanced scorecard, performance measurement, and philanthropies.

EMCF: A New Approach at an Old Foundation, (Grossman, Allen S. and Daniel F. Curran, 2002). Subjects covered include: leadership, organizational change, and philanthropies.

Omidyar-Tufts Microfinance Fund: Striving to Reshape the Social Enterprise Capital Markets, (Chu, Michael and Jean Steege Hazell, 2007). Subjects covered include: microfinance, philanthropies, and trusts.

Absolute Return for Kids, (Leonard, Herman B., Marc J. Epstein, and Melissa Tritter, 2008). Subjects covered include: nonprofit organizations, philanthropies, and strategy.

Acumen Fund: Measurement in Impact Investing (A), (Ebrahim, Alnoor and V. Kasturi Rangan, 2009). Subjects covered include: philanthropies.

Mibanco: Meeting the Mainstreaming of Microfinance, (Chu, Michael and Gustavo A. Herrero, 2009). Subjects covered include: competitive environment, developing countries, emerging markets, international banking, and microfinance.

Root Capital, (Rangan, V. Kasturi and Katharine Lee, 2009). Subjects covered include: fund raising and growth strategy.

United Way, (Grossman, Allen and Catherine Ross, 2009). Subjects covered include: social enterprise and social issues.

Equitas Microfinance: The Fastest-Growing MFI on the Planet, (Narayanan, V.G. and V. Kasturi Rangan, 2010). Subjects covered include: growth strategy, leadership, microfinance, social enterprise, and social responsibility.

The Robin Hood Foundation, (Ebrahim, Alnoor< and Catherine Ross, 2010). Subjects covered include: nonprofit organizations.

Social Finance, Inc., (Cole, Shawn, Rawia Abdel Samad, Matt Berner, and Raluca Dragusanu, 2011). Subjects covered include: entrepreneurial finance, financial instruments, investment management, investments, nonprofit accounting, performance measurement, philanthropies, and social services.

Omidyar Network: Pioneering Impact Investment, (Chu, Michael and Lauren Barley, 2013). Subjects covered include: social enterprise.

Bridges Ventures, (V. Kasturi Rangan and Sarah Appleby, 2013). Subjects covered include: social enterprise, marketing, and financial management.