While studying for her MBA at NYU Stern School of Business, Maya Johnston learnt how to build an impact investment portfolio — from sourcing early-stage companies to conducting investment diligence and pitching companies to an investment committee. But it is no classroom exercise; it is using real dollars.
Through the NYU Impact Investment Fund, students from NYU Stern School of Business, its Wagner School of Public Service and NYU Abu Dhabi use funds provided by philanthropic donors. The money is housed in a donor-advised fund, which executes the students’ investment decisions. Profits are reinvested into the fund.
Making real investments, says Johnston, who is one of the programme’s deal team leaders, intensifies the learning process. “It gives a whole new level of gravity to the work you’re doing, because you know you’re dealing with real people,” she says.
NIIF’s investment is directed towards education, financial inclusion, the environment, healthcare and ageing. Johnston’s team is focused on investing in food systems. “We chose food waste and food access,” she explains. “And we’re looking at under-represented and undercapitalised founders in marginalised communities.”
As well as giving her new technical skills, the programme has upended Johnston’s understanding of impact investing. While she once saw it as an activity that had more in common with philanthropy than financial markets, her view is now very different. “You can have outperforming financial results with an impactful business,” she says.
NIIF investments confirm this. In 2023, for example, the investment committee selected Maternova, which uses technology to improve maternal healthcare, for a $30,000 preferred equity investment. By the end of the year, the company had generated revenues of $496,000 and the deal team projected that revenues would reach $1.45mn by 2025.
The evolution of Johnston’s view of impact investing reflects a broader trend in financial markets: the increasing mainstreaming of this approach. No longer is it an activity that was once largely the preserve of philanthropists, foundations and investors prepared to accept lower-than-market-rate returns to achieve positive social or environmental impact.
Today, large investors — such as pension funds and insurers — are entering the impact investing market. The Global Impact Investing Network now puts the value of impact investments — which it defines as those seeking to make a positive impact as well as a financial return — at more than $1.57tn globally.
Moreover, some impact portfolios now have substantial assets under management. For example, impact-focused venture capital firm DBL Partners has more than $1bn under management, while the Rise, Rise Climate and Evercare Health funds of private equity group TPG manage about $25bn in impact-focused capital.
A list of investors, published by the Financial Times in July in partnership with the GIIN, included: Baillie Gifford, the asset management firm, which has almost $8.2bn allocated to impact investments; Zurich, the insurer, with almost $7.9bn; and Vistria, the private equity group, which has almost $11.4bn under management.
As impact investing funding flows have increased, so has the appetite among MBA students to learn how to engage in the market. “We’re seeing demand for this,” says Witold Henisz, vice-dean and faculty director of ESG initiative at the Wharton School, the University of Pennsylvania, which runs similar experiential investing programmes to NYU’s.
He points to the school’s Wharton Impact Venture Associates programme, through which students gain hands-on impact investing experience, and which he sees as part of what draws many students to the school’s MBA programme. “We have so many applications for the Wharton School highlighting WIVA,” says Henisz. “That’s the programme people cite most often.”
Another reflection of the hunger for hands-on experience of impact investing is the size of the applicant pool for the Mosaic Fellowship offered by Impact Capital Managers, a network of impact-focused private capital fund managers that offers first-year graduate students summer placements in member firms.
The programme for summer 2025 received 500 applications for the 31 places, says Nancy Pfund, who founded DBL Partners in 2008. “That’s the largest so far,” notes Pfund, who is an ICM founding board member.
She believes demand for the Mosaic Fellowship and experiential programmes, such as those of NYU and Wharton, stems from the opportunity to make decisions that are not merely theoretical. “It’s a great connector between what people think impact investing is and what they’re learning in the classroom,” says Pfund.
Henisz agrees. “There’s real money at stake,” he says. “That takes it to the next level and provides a bridge between what students do in the classroom and their first job or their first internship.”
As well as experiential learning, many business schools offer impact investing training in the form of electives. At Yale, for example, the Private Capital and Impact Investing course focuses on how venture capital and private equity investment models can be used to make positive environmental and social impact.
At Columbia Business School, students learn skills such as how to evaluate deal opportunities in terms of both financial and social returns, and how to structure and operate impact investment funds.
But it is not only big-name schools offering these programmes. Pfund points to the MBA programmes of institutions such as University of Oregon, University of Southern California, and George Washington University. “It’s not just at the elite schools,” she says.
At the University of Utah’s David Eccles School of Business, it was a $13mn gift from Jim Sorenson — an entrepreneur, business leader, innovator and impact investor — that enabled the creation of the Sorenson Impact Institute.
As well as academic teaching on impact investing, the institute offers students opportunities to learn by doing, through internships and experiential learning, where they work in deal teams making venture investments in impact-focused companies.
Since 2013, the Sorenson Impact Investing Student Program has invested almost $43mn in more than 100 companies from 16 countries. Capital for the investments comes from the Sorenson Impact Foundation, the Joan and Tim Fenton Founders Fund and the University Venture Fund, a student-led fund.
US schools are not alone in introducing impact investing into the MBA curriculum. The international nature of the trend is reflected in the syllabi collected by the Impact & Sustainable Finance Faculty Consortium, a global network of faculty members.
“Some of the classes are fantastic and some schools are working on it,” says Megan Kashner, director of social impact at Northwestern University’s Kellogg School of Management and a consortium steering committee member. “But we have over 400 syllabi from different schools.”
The mainstreaming of impact investing in recent years has helped schools develop these syllabi, says Sarah Gordon, a visiting professor in practice at the London School of Economics’ Grantham Research Institute.
Gordon, a former Financial Times business editor, points out that a growing number of firms have been practising impact investing for many years and so have a track record of delivering impact and financial returns — and data to go with it.
“If you’re constructing a curriculum, there’s sufficient material on transparency, measurement, monitoring and accountability,” she says. “So you have the material now — which, even five years ago, and certainly 10 years ago, didn’t exist.”
The next question, however, is the extent to which schools will integrate impact investing principles into courses such as finance, accounting and operations. “At this point, it’s more in the electives,” says Pfund. “I’d like to see more representation of impact models in the core curriculum. It is beginning to happen, but that’s still ahead of us.”
Given the pace at which business schools change their core curriculum, this will not be easy. “Wharton’s a huge place and things move slowly,” says Henisz. “When the students and alumni demand it, that’s the first step to getting it into the core. But there’s a process.”
However, Maria Teresa Zappia — deputy chief executive and chief impact and blended finance officer at BlueOrchard, the impact investing arm of Schroders — argues that the core curriculum remains an essential part of the education of anyone who wants to become an impact investor. “First and foremost, you need to know how a traditional investment process works,” she says.
“A lot of young talent wants to move straight into sustainable investment without having investment expertise — and that’s not necessarily the best approach” adds Zappia, who is also global head of sustainability and impact at Schroders.
Nor does taking an impact investing course mean an MBA student will become an impact investor. “My sense is that the next generation of students see it as more fluid,” says Katie Macc, chief executive at the Sorenson Impact Institute.
“It’s one thing to work in the impact investing field,” she says. “But what we want is for this to influence all decisions, whether that’s our buying decisions, our professional decisions, or our investment decisions.”
That is the effect it has had on Johnston, based on her experience at NYU Stern. ‘‘No matter what I do afterwards, it’s shaped that path by making sure impact is always a focus,” she says. “And my hope is that, at some point in the future, all investing is impact investing.”
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