16 Oct Lenses on Social Impact

On October 10th, I had the pleasure of attending a morning panel discussion on Impact Investing, hosted by MPOWER Financing at the Harvard Club in New York City.

Panel (LtoR): Kapil Sharma (Wipro), Chris Cozzone (Bain Capital Double Impact), Thomas C. Barry (Zephyr Management), Tahira Dosani (Accion Venture Lab), Rachna Saxena (Dalberg Global Development Advisors); Moderated by MPOWER Financing Co-Founder and CIO, Mike Davis

MPOWER Financing is an impact-driven financial technology B-Corporation startup that uses big data to help high-promise international students, with little or no credit history, gain access to student loans to complete their higher education. The founders, Manu Smadja and Mike Davis, see education as an equalizer that could empower ambitious students to reach their goals and close the gap on income inequality.

The event, titled Lenses on Social Impact, sought to shed light on the various perspectives within impact investing, social enterprise and multilateral organizations. MPOWER Financing invited experts, with experience in the different parts of impact investing to share their insights on the topic –

• Thomas C. Barry, President and CEO at Zephyr Management
• Chris Cozzone, Senior Vice President at Bain Capital Double Impact
• Tahira Dosani, Managing Director at Accion Venture Lab
• Rachna Saxena, Associate Partner at Dalberg Global Development Advisors
• Kapil Sharma, Vice President for Government and Public Affairs, North America at Wipro

The Global Impact Investing Network recently estimated that there are $228 billion invested in impact, double the prior year estimate. That statistic is encouraging for social entrepreneurs, in both the profit and non-profit space, as there are a growing number of investors that are interested in mission-driven ventures rather than solely focused on financial returns on investment.

Take Accion Venture Lab, for example. Ms. Tahira Dosani, Managing Director of Accion Venture Lab, highlighted that their first criteria for evaluating startups to invest in is if the venture drives impact. Only then will they dive in to evaluating other aspects of the startup. By doing so, they act as gatekeepers for their investment fund to ensure that all their projects drive change.

Both professionals in the social impact space as well as students of business schools, including NYU Stern and IE Business School, attended the full-house breakfast event. The panel of experts shared a number of important perspectives to achieve impact:

• Social impact projects need to focus on smaller blocks on change rather than big grand schemes. Smaller blocks are achievable and measurable, enabling traction and expansion later on.
• A public-private partnership is critical for effecting social change. The public-sector is also focused on providing public improvements, working with them can improve how social enterprises serve their target segment.
• Measuring social impact is complicated. For example, measuring the number of bank accounts created in under-banked areas does not say much about the effectiveness of a financial inclusion social project. Rather, the measurement should focus on measuring the benefits provided by the project, such as whether there is an increase in savings or an increase in the ability to purchase needed goods and services.
• At the same time, impact investors should avoid turning social enterprises into reporting companies. Social enterprises need to be focused on their clients – the beneficiaries of their services – and not solely on their investors. Impact investors need to understand the limitations of impact measurement and be strategic in the requirements so the organizations can focus more of their resources on delivering change rather than measuring it to satisfy investors.
• Corporate social responsibility and corporate social values are becoming an integral part of private enterprises today. Employees want to feel good about their employers and the projects that they are working on. Companies are turning their attention to social impact projects, which presents an opportunity for social enterprise startups and impact investors to partner with them to help drive change.
  

  MPOWER Financing CEO and Co-Founder, Manu Smadja, presenting at the Lenses on Social Impact Conference

Overall, the event was a vital conversation about impact investing. Impact investing involves more players than traditional investing, from public and private sectors. Additionally, there is more complexity involved as there is a need to satisfy effectiveness in both social impact and financial returns. The more collaboration and mission alignment the different players have towards a common social mission, the more effective we can be at driving change.

Did you attend the event? What were some points you heard that you found particularly insightful? Share your thoughts in the comments below.

About MPOWER Financing

MPOWER Financing, headquartered in Washington, D.C., and with offices in New York City and Bangalore, India, is a mission-driven fintech company and provider of global educational loans. It is the only student lender in the world that leverages both overseas and U.S. credit data, as well as future earning potential, to serve high-promise international and DACA students. MPOWER Financing works with more than 200 top universities and colleges across the nation to provide financing to students from over 200 countries. Since 2014, it has received over $800 million in loan application volume on its platform. MPOWER Financing helps students build their credit histories and provides them with personal finance education and career support to help prepare for life after college. The team is backed by Zephyr Management, Goal Structured Solutions, 1776, Village Capital, VARIV, DreamIt, Fresco, Chilango, K Street and University Ventures. For more information, please visit www.mpowerfinancing.com.

Article written by: Ali Birouti

Ali is a Social Innovation Fellow at IE Business School. Professionally, Ali helps organizations use technology to develop solutions to complex problems. He’s most proud of his work with the government of Senegal to design a mobile-solution enabling people in rural areas register for a taxpayer ID. Currently, he is pursuing his MBA at IE Business School and the Tuck School of Business at Dartmouth. You can connect with him on LinkedIn.