The video delves into the transformative developments in philanthropy, impact investing, and stakeholder empowerment over the past 25 years, highlighting the strategic innovations that have emerged. Government and private sectors are increasingly intersecting to drive social progress, as evidenced by the founding of the White House Office of Social Innovation under President Obama, inspired by articles in the Stanford Social Innovation Review. The video features a panel of experts including Laura Hattendorf, Darren Dodson, Heidi Patel, and Neha Dalal, who discuss their roles in impact investing and the significance of strategic philanthropy.

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Key Vocabularies and Common Phrases:

1. philanthropy [fɪˈlænθrəpi] - (n.) - The desire to promote the welfare of others, typically through the generous donation of money to good causes. - Synonyms: (charity, benevolence, altruism)

Original strategic plan, a focus on innovations in philanthropy was actually part of the stated mission statement.

2. efficacy [ˈɛfɪkəsi] - (n.) - The ability to produce a desired or intended result. - Synonyms: (effectiveness, efficiency, potency)

Malago is very much about scale, hopefully about efficacy, sustainability and scale.

3. systematic [ˌsɪstəˈmætɪk] - (adj.) - Done or acting according to a fixed plan or system; methodical. - Synonyms: (methodical, organized, structured)

Initially started within doing systematic testing of subprime lending portfolios.

4. hyper-competitive [ˈhaɪpər-kəmˈpetətɪv] - (adj.) - Extremely competitive; characterized by fierce competition. - Synonyms: (fierce, intense, cutthroat)

Decades of venture working in one way and the headlines that venture capital companies get don't reflect these stories of impact.

5. innovative [ˈɪnəˌveɪtɪv] - (adj.) - Featuring new methods; advanced and original. - Synonyms: (inventive, novel, groundbreaking)

Like what's the most innovative, right? Well, sometimes it's just like empowering essential workers to do the work that they do and reach more people more easily

6. intermediary [ˌɪntərˈmiːdiəri] - (n.) - A person who acts as a link between people to try to bring about an agreement or reconciliation. - Synonyms: (mediator, go-between, agent)

So managers are new, intermediaries are new.

7. fundamental [ˌfʌndəˈmɛntl] - (adj.) - Forming a necessary base or core; of central importance. - Synonyms: (basic, essential, primary)

The companies that get venture backing become household names.

8. subprime [ˌsʌbˈpraɪm] - (adj.) - Denoting or relating to credit or loan arrangement for borrowers with a poor credit history. - Synonyms: (nonprime, below prime, lower grade)

systematic testing of subprime lending portfolios.

9. Strategic philanthropy [strəˈtiːdʒɪk fɪˈlænθrəpi] - (n.) - A form of philanthropy that is focused on achieving specific outcomes and aligning with an organization's overall strategy. - Synonyms: (planned giving, mission-driven charity, targeted philanthropy)

So if we think about trends to strategic philanthropy, venture philanthropy 20 years ago.

10. inflection point [ɪnˈflɛkʃən pɔɪnt] - (n.) - A moment of dramatic change, especially in development or situation. - Synonyms: (turning point, pivotal moment, watershed)

For having an inflection point in the growth of impact investing broadly defined

Funding Transformative Change - Lessons from the Vanguard of Impact Investing and Philanthropy

One of the things I think is really interesting, if we think about the 25 years since the launch of CSI, there's been some really dramatic developments in how we think of moving capital to impact. Actually, this was foreseen by the founders of csi. If you look in the original strategic plan, a focus on innovations in philanthropy was actually part of the stated mission statement. So if we think about trends to strategic philanthropy, venture philanthropy 20 years ago, more recently a push toward more stakeholder based empowerment philanthropy, if we think about how government has been engaging in innovation and supporting innovation.

As a matter of fact, it was an article in the Stanford Social Innovation Review that inspired the launch of the White House Office of Social Innovation under the Obama administration. And it was a GSB alum who directed the Social Innovation Fund. And if we think about just the dramatic growth in impact investing, for those who maybe aren't as familiar in recent years, our student led GSB Impact Fund is amazing. And you know, every year almost twice as many students apply for that as the number of spots we have. So we've seen a lot of really interesting innovations and development.

So we've got a great panel here of folks who've been involved in impact investing and philanthropy to help us think about these developments and what they mean today and some of the challenges coming ahead. So what I'd like to do is introduce our panelists today. On my left, your right, we have here Laura Hattendorf, who's a senior advisor to the Mago Foundation. Next, Laura, we have Darren Dodson, the founder and managing director of Illumina Capital, followed by Heidi Patel, the managing partner at Rethink Impact, and Neha Dalal, who's vice president.

And I promise you we didn't plan this, but all former panelists are also lecturers here in addition to being alumni. So I think this is particularly exciting. And so for students in the audience, if you hear things you're excited about, we really strongly encourage you to sign up for their classes on these exact topics. So maybe what we'll do is starting from my left and proceeding across. Can you give yourself each a brief introduction, talk about the work you do and how you got into that line of work that's so fascinating. So we'll start there.

So, Laura, would you mind starting? Sure, I'll start. Everyone can hear this. Good. Yes. All right. So as I said, I'm currently a senior advisor at the Malago foundation, but I have a long history there. I joined the Malago foundation in 2007 when there was really nothing going on there. At that time, for 15 years, Kevin and I co created that. Kevin Starr is the CEO and I co created that foundation to where it is now. What Malago does is we find and fund early stage entrepreneurs who are really tackling the basic needs of the very poor.

What that means is that we mainly fund in sub Saharan Africa and some parts of Asia. For many years I ran all the grants, operations and investments of the foundation and then with Kevin designed many of the frameworks that we are well known for now. But Malaga is very much about scale, hopefully about efficacy, sustainability and scale as one of our earlier speakers spoke about. But that's what we're really doing in that space. But I will say my journey has been very much linked to the GSB in many ways.

When I left the gsb I co founded a conservation organization and I met my co founder through an introduction from a professor Jeremy Bulow. That really launched me on that path. Then when I joined Malago, I was doing work for the alumni consulting team. Part of that work was I had to interview this guy named Kevin Starr who was on the board of one of the organizations we were doing a project for at the same time was on a school on the PTA school board. And the guy there was telling me I got to meet this guy named Kevin Starr.

So I'm like okay, I guess I got to go meet that guy. Then of course I became a lecturer at the GSB in 2000. When did we become lecturers? Russ? I co teached with Russ I don't know, maybe about 10 or 11 years ago. So it's my journey has been very linked to this university and I'm very grateful for it.

That's amazing. Thank you for sharing. Darren, how about yourself? What do you do and how'd you get there? Sure. I'm the managing director of Illumina Capital and we're a private equity venture capital and growth fund of funds. So what we focus on is addressing bias in the investment process as a strategy for unlocking impact and returns. So the way that I got there I initially started within doing systematic testing of subprime lending portfolios and proving with 60 attorneys that low income, often Latinx and black people are overcharged relative to risk in the subprime lending market and then use that data to pass laws in 18 states that currently save low income homeowners about $9.1 billion in excessive fees and interest and have every year since 2003 or 4 when that was passed.

It's great work by the center for Responsible Lending which is where I worked previously and then came here to the GSB to figure out how to build organizations that wouldn't do that to people that wouldn't systematically overcharge them because of their race or their gender. Not good business, but also not good for humanity either. After attending gsb, Hurricane Katrina hit the day I started school. I worked with 170 students and 300 students from other schools to build an organization that is called the Idea Village.

But later the main program was renamed the Colter Challenge and partnered with Jim Coulter, who's a trustee of Stanford and graduated business school, to kind of bring a couple thousand MBA students to address different challenges in New Orleans for early stage entrepreneurial ecosystems. And then most recently, before founding Looming Capital, I worked at the Calvert Funds and managed a portfolio for the board of directors of 80 positions in five continents around the world. That work kind of informed the work that I do right now in looking at bias in the investment management ecosystem. And happy to chat more about that later on and pass it over to Heidi.

That's awesome. Thanks, Darren. Heidi, let me come back to you in a moment, if you don't mind. Neha, could you mind introducing yourself? What do you do and how'd you get there? Sure. I'm actually going to flip the order on that. I'll first tell you how I got there and then we'll get into what I do. But I'm a child of immigrants. My parents came here from India. My dad had to borrow the cost of his flight to actually afford to be able to come. And it's a very classic immigration story where the doors to opportunity really opened up for my family here.

And what I'm trying to spend my life doing is opening those doors more broadly. So I started my career in government at the White House Council of Economic Advisors where I worked on economic mobility, education, and a number of different interrelated issues. But I quickly realized that there are actually three big pools of money to to really drive social change. There's the government public dollars, there's the social nonprofit philanthropic dollars, and finally there's the for profit impact investing and business dollars.

And I figured all three are actually quite similar. They're about how do you take limited capital and most apply it to drive impact and there needs to be a lot more collaboration between them. So that brought me to Stanford's business school, which was my first exposure to the private sector. And it was an incredible experience. And in particular, where the journey to my current job really came in is I took a class with two folks Paul Brest, who used to be dean of the law school and used to run the Hewlett foundation, and Mark Wolfson.

When I was considering what I wanted to do after the gsb, Mark sat me down and he shared with me that he runs and he co founded a multifamily office called Jasperidge Partners, which has really strong ties to Stanford's business school. What we do is we manage around $40 billion on behalf of ultra high net worth families and also some institutional clients. And most of my colleagues are in the business of making these families and these institutions wealth. But as Mark likes to point out, there are really a few things you can do with your wealth.

You can spend it, which people are really good at doing on their own. You can transfer it to your loved ones, which we support through trust in a Safe place planning, or you can use it to make the world a better place. And what he shared with me is that he had been informally helping our families for years on that, but he really wanted to double down and actually make this a more formal part of the business. And he had actually taken that same class that he teaches at Stanford and taught it to his partners at Jasper Ridge.

And they all did their homework for 16 weeks and they read what they had to read and at the end of it they were like, yes, we want to do this, we want to double down. That's when they brought me on. I graduated in 2021 right after they did that. And I helped them launch the new philanthropic advisory team at Jasperidge. We now have three GSB alumni on that team and that's really where the story started.

Awesome. Thank you for sharing that, Heidi. I'm going to piggyback on the question to you as you introduce yourself, what you do and how you've come there. I also want to ask you, I've heard you speak passionately in different audiences and classes of the need to move more capital to impact. So why is Impact investment need?

Why aren't government and philanthropic resources enough? So there's, there's two things for you to think about. Yeah, let me talk about first, why, why venture and what I do. And then I can talk about why private capital more broadly. So I'm managing partner at a firm called Rethink Impact. As of about two months ago, we're the largest venture capital fund in the country, backing one women CEOs who are leading technology companies. They also happen to be driving Impact through the businesses that they're starting and building, which is exciting. So we're at about a little over Half a billion dollars.

One stat that we're really proud of is that we've actually mobilized so far about $1.6 billion towards women and impact. So every dollar we've deployed thus far, $9 from the market has followed because I think speed speaks to just the opportunity, but also the demand, which I'll probably talk a little bit about later. But if you think about startups more broadly, so 10,000 businesses are started every year. Only five of those will ever get venture capital. Yet if you look at all of the companies that have IPO'd since the mid-70s, 42% have had venture capital backing.

So venture capital actually has this really profound impact on our economy and our society. These companies that get venture backing become household names. They develop products and services that go on to reach millions of households, businesses and employees and they create enormous wealth. So they have a profound impact. Yet 98% of every venture capital dollar goes to male CEOs, mostly white. So what we're seeing is that all of these dollars that have these profound impacts are going to a very narrow sliver of our society, which means they're going towards a very narrow sliver of solutions and a very narrow sliver of problems are actually getting addressed and we're really missing out.

Society is missing out. And investors I would argue are really being underserved. I was reading a report from McKinsey on the way, the way down here and it reported that I think you'll love these, you probably know these stats. Non diverse teams of venture backed companies are 27% less likely to outperform. This was in 2020. By 2023 that number had more than doubled. They are 66% less likely to outperform the market. So investors are burying this homogeneity tax by not investing in teams like the ones that we support, that Darren supports to his LP investments.

So that's what we do at Rethink. We're trying to use venture capital as this tool for transformational impact that can reach millions and create ripple effects and role models along the way. Only one in every 140 venture backed companies ever becomes a billion dollar business. So far we're at 4 out of 44. So so far so good. So we'll keep going.

So venture capital, when we talk about this, at the impact fund which NEHA helped lead, which is really exciting, it's just an incredible program that the CSI runs led by Halle Middleman, we look at trying to size the problem. If you look at UN SDGs, Hank Paulson wrote in the New York Times in 2016 that we need about $90 trillion to address the 17 UN SDGs over a period of time. With the passes of time, that number has grown. If you look at BCG's net zero report, they report that $150 trillion is needed by 2050. So this need is growing. So let's just say $100 trillion. So 10 trillion a year.

How do we get there? Let's look at global GDP. Last year it was $105 trillion. Let's imagine that all the world leaders are able to come together in a room and shake hands and agree to deploy capital to solve our biggest social, environmental problems. We can all imagine that happening, right? So take 2%. That gets us to 2 trillion a year out of a need of 10. And then, all respect, let's talk about philanthropy. So it is incredibly important. It is a really important leg of the stool alongside government.

So charitable assets in the US total about $10 trillion. And there's more in the US than there is anywhere in the world. And if most of those dollars follow the 5% rule, and I have to imagine that in this room of all rooms, you understand what the 5% rule is. So that's about a half a trillion dollars a year. So two and a half. That leaves a 75% gap.

If we cannot figure a way to harness the $450 trillion of private investment capital around the world, we will never have a shot. I think the speaker on the last panel made a really good point about urgency. Right? Whether it's social problems or environmental, the time is now. We're running out. The gap is widening. So for me, impact investing, any flavor you want, be at the tip of the spear, which is what venture capital is all across that spectrum towards blended finance, we need it all to mobilize and quickly.

So I wonder if we could all think together and have a little conversation here. What are the keys, key hurdles or obstacles that remain to moving more capital to impact? Thoughts on the challenge that we're facing, especially in the next 25 years? Who'd like to start? I think one of the challenges is we don't have enough models to move capital. So venture is one form of moving capital, and it's really not the right form of capital. For 98% of stuff out there. It just doesn't follow the same risk return paradigm.

That's a huge challenge. The stuff that I work in, the buying power of the market is much lower. We do grants, debt, equity, we do all of it. We match the form of the capital to the nature of the problem. But there's lots of problems where you have underlying consumers with very little buying power. The, that has an impact on the business model, obviously. So there's a lot of interesting potential business ideas out there.

But the current ways that we deploy that capital to early stage organizations is tied up in this very strict model. And I think it's very frustrating to entrepreneurs, incredibly frustrating to entrepreneurs that if you don't fit that model, if you're not a tech company serving fairly high income people, it's, it's very difficult to access that kind of funding. So I'm hoping that we have different models of funding. So we've been looking at some of them, whether it's around revenue sharing, whether it's around a different kind of payout over time. They're complicated.

The market doesn't love them because they're not known entities. But we must break that model if we're going to get that kind of capital out. Thanks, Lauren. Other thoughts? What are the obstacles? Hurdles? Yeah, one of the things that we were really interested in to Heidi's statistic around the 1.3% of $82 trillion in capital that's managed by women and people of color run funds. When we think about that number, we think about the question why that is, that it's not shifting despite 40 years of outperformance or equal performance of women and people of color led funds.

And that's the national association of Investment Companies that cited that statistic. And when we look into that, what we did is we ran a research experiment to ask the question, well, why is this? And we tested 180 asset allocators that manage $4 trillion in capital. And then we published the findings and what we found is the higher black fund managers perform, the less capital they're allocated. A shocking finding.

One of the things being in the Charlie Munger building today, thinking about Charlie Munger's orientation to compounding knowledge. And we work with our fund managers to address implicit bias and compound their knowledge in this area of not overlooking and underestimating women and people of color, which is something I think that is very consistent with the way that he invested. Compounding knowledge leads to compounding returns over time. So an investor that stopped learning is a very dangerous investor. One of the ways that they can keep learning is not overestimating and overlooking.

Underestimating, overlooking women and people of color, which is consistent with so much of what we've learned here over the years at Stanford and inconsistent with a lot of other things and investment theory. So just wanted to share that. Research is a critical important point of all of our work here at the gsb and applying that to this unique problem is something that I just share as an important thing with a lot of my panelists.

I would add two things. One is storytelling. So I would maybe push back on Laura's point a little bit that it's not just vulnerability. D.C. backed companies serving the 1% that are getting the dollars. So the companies that we've invested in that have become multi billion dollar businesses. One example was grown out of the gsb. It's skilled education. And Rachel Romer graduated from the GSB saying I want to help America's workforce.

Low income hourly frontline workers go back to college for a dollar a day. Sounds like a nonprofit. It's now four and a half billion dollar business. Spring Health wanted to bring personalized mental health, precision mental health, take the trial and error out to employees. When she pivoted during COVID to focus on the 99% workforce. Think of doordash instacart warehouse workers.

The company just grew like crazy and it's now a $3.5 billion business serving the 99%. So it is possible. But when we've had this, you know, decades of venture working in one way and the headlines that venture capital companies get don't reflect these stories of impact and when female founders do end up in the headlines, it's oftentimes for other things. And I think, you know, I have optimism when the IPO markets open and M and A starts to pick up again. Hopefully we will start. There are so many of these stories sitting on the sidelines that are ready for primetime and that's going to be an awesome moment.

The second thing I would say is that what's been holding the field back and I think Stanford can play a role, is that it's still really under intermediated. We don't have enough managers. And so managers are new, intermediaries are new. A lot of financial advisors are not. So to me that's an enormous opportunity to think about a generational changeover, a generational shift. That's where education comes in.

So educating investors and advisors of tomorrow, how to think through multiple lenses, how not to be terrified of things like sustainability or impact or blended finance. But they're actually, they have facility with it, they've trained in it, they've done projects in it, they've had experiential things like the impact fund. So training that next generation of advisors and intermediaries, I think is going to be critical for having their. For having an inflection point in the growth of impact investing broadly defined.

Thank you. I'll add two more things, but before I do that, I will note that I was one of those folks who was trained through the impact fund and through Heidi's great advising. And now I'm an advisor in the wealth management space. So perfect case study. The two things I would add is one, understanding the role of impact and investing versus other sectors. And I'll build a bit upon what Heidi and Laura shared on this.

And two, impact measurement. So on the first piece, you know, I think Heidi really nicely laid out the size of the problem and how we're going to need all types of capital. I think a lot of people are still trying to figure out where should each of these three sectors play, right? Government versus business versus grants. And then the social sector. Very similar to Laura.

When we work with our families, we ask them, start with the problem you want to solve in the world and let that guide you to the right capital type, whether it's an impact investment, whether it's C3 nonprofit dollars, or whether it's C4 lobbying dollars. And what we often find is that business is often a first line of defense in a lot of ways that can actually solve a lot of problems in really effective and scalable ways. But it can't solve everything because of market failures. And actually sometimes it creates the problems that other sectors that need to solve.

So government can often step in in those cases. But we know that the government fails at some points too. And that's why you also need more nonprofit funding as well. But really you need all three legs of the stool. And I think that understanding about how the sectors play together, if we had a broader understanding on that, we would be able to direct more capital through impact investing.

The second is on impact measurement. So when you think about financial returns, it took the fields a while, but we coalesced on a few standard metrics, right? Things like moic, irr, et cetera. And just like financial metrics, before you make an investment in impact investment, when you're thinking about impact, you're making assumptions, right? And you're trying to guess what the impact will be, just like you're trying to guess the financial returns.

The difference is that after the investment is made and it plays out, you tend to know what the returns were. At the end of the day, you don't always know what the impact was. At the end of the day, impact is really, really hard to measure For a variety of reasons until we can better measure impact, it's very hard to direct more money towards impact investing and towards the most effective methodologies because people don't know what they're getting from it. You can't let perfect be the enemy of good. You have to keep working towards these pieces, but we do need to improve those systems.

And I think this has played out in society. You saw this big wave towards impact investing and then you've actually seen a bit of a pullback because people have said, hey wait, they're branding themselves as an impact investor, but it doesn't actually make sense when I look at the details. And they're branding themselves as an impact investor and they're branding themselves as an impact investor and it's our lack of ability to be precise about impact measurement that I think has allowed for this and that has allowed for this very fair pushback in a lot of cases.

Fascinating. You've all shared challenges, hurdles, obstacles. But you also, in introducing yourself mentioned many of you mentioned a few formative experiences you had while you were here as students. For the students in the room, I wonder any recommendations or thoughts you would have or how could they prepare themselves for careers in this field? Is there something they can do as students? Are there skills, mindsets, experiences that you would encourage them to consider if they want to pursue careers in this space?

Who'd like to start with that? I can get started as maybe the most recent grad. My entire exposure to this field happened through the gsb. Right? So the first, I promise Matt didn't tell us to come up here and be to say nice things about csi, but I'll say nice things about CSI anyway because it really all started here. The Impact Fund is an incredible opportunity to really get that hands on experience.

As someone who again came in with zero for profit experience or private sector experience. By my second year, thanks to mentorship of Heidi, the students older than me or a year ahead of me, I was able to lead the Impact Fund my second year. And that's the only reason I was able to enter this current career within a wealth management firm working on grants, impact investments, policy, advocacy, et cetera.

Beyond that and also shout out Hallie, who's standing in the back who plays such a big role at CSI on that. But beyond that, there's so many other resources to make use of the various advisors at csi. There's a number of different funding opportunities. As you heard from some of the current students earlier, there's incredible classes to take like the class I took with Mark and There's a lot of internship opportunities. I think I mentioned I was looking at all three sectors when I came here.

I was able to explore impact investing through the Impact Fund and also through an internship in Impact Investing with a couple GSB alumni, I was able to spend time in grant making through the Gates foundation. And I was able to still stay in policy through some stuff with the Biden campaign and transition team. And it was really all enabled by this place. So make use of all the opportunities. Thanks, Neha.

Anybody else want to share your thoughts? Yeah, I would say don't stress. You don't have to figure it all out in your one internship and your one job afterwards. So when I talk to students, I talk about the GSB really is forever. I was here, I did all the things, I did all the competitions. I think I was the first Smith intern to work for an impact investing firm that had a for profit complaint component. So I got denied, I fought the fight, I won, I got to go there and I went to go work for that organization after I graduated and I had to, I took advantage of the GSB loan forgiveness.

And so after two years I graduated from that. But then I wanted to do something really bold and so I kicked my kind of existence into the ether and I actually moved to India to work for DLIGHT Design. So it's really fun to see Ned and had these really formative experiences working for Sam in that office in Delight. You know, I was there about a month after they started shipping product in India. And his experience in working with impact investors and traditional VCs is really what sparked my desire to come back to the US and to help drive forward my version of impact investing and what I thought it could be, what with rigor and discipline and authenticity around impact DNA.

But to move to India and make $700 a month, I once again had to go back very humbly to the GSB and get back on loan forgiveness to do all of that. And then being able to come back and work for New Island Capital. Charles Ewald hired me. Cause he met, he got my resume from Jacqueline Novogratz at Acumen Fund, another GSB graduation. I don't know if he would have hired me if he hadn't seen GSB on my resume. And known, kind of a known quantity, right.

We took that experience working together for years. We turned that into this class at the GSB called Investing for Good. This will be our 10th year teaching it. And we're now doing deals with funds that were started by our students. We just invested in a company that was founded by another one of the investors from the GSB Impact Fund. So these can.

And I met my partner when I after I, after I turned grades in first year of teaching the next day I flew to New York and I started work at Rethink Impact. I met my now co managing partner Jenny Abramson because she was looking for a partner and she contacted my classmate Delaney Steele who was like running Ross and she said I don't know anything about impact investing but my classmate from 15 years ago teaches a class at Stanford. Her name's Heidi. Why don't you go talk talk to her. And that conversation changed my life and changed the trajectory of my career.

And so it all comes back to not just these two years but this GSB community that you will build and leverage and contribute to for decades. Wow. Such a testament to the power of this community and this network. Darren, what would your suggestions be? Yeah, my thought is I see Jim Phil's here who had a big influence on my life while I was here at the GSB. Really grateful for the 390 I took with him to learn more about New Orleans and go down.

I think I flew down during school and sat down with a bunch of entrepreneurs that were four African American women who I think the city of New Orleans may not have been rebuilt if it wasn't for these four folks. We ended up bringing 1,000 different business school students down as I mentioned before and ended up Harvard and Cornell and other schools ended up following on. But one of the things that taught me I guess is to try to start doing what you're thinking about doing.

Now of course don't start a company because the school doesn't like companies. Get started during school but try to get exposure to the people. The next thing I would say is don't try your best to meet with people who don't share your same political views in order to further cross aisle kind of innovation.

One of the things that I learned is that many people at the gsb, including Jim Coulter, hadn't started Rise Fund at that time and put 20 billion into impact investing. And when you read his bio and you're sitting as a student, you might not think that he's focused on impact investing, but when you connect with people at a heart level, at a touchy feely level and really engage kind of across differences, especially right now, this is one of the few places that I think can really enable cross sector across innovation around meeting the solutions of the future that our world so desperately needs.

And yeah, I Guess it's just spend time with people who are different than you is I guess take home message. That's great advice. Laura, any words that you'd offer for students, I would say you can also use. I mean many of you know you can use your GSB experience to try different things, try out different things. So and one thing that I did was I had to signal I was really interested in changing careers. Before I came to business school, I went to Wharton Undergrad.

I had a degree in finance. From there I went to consulting and then I did real estate, commercial real estate development and I wanted to get engaged in conservation. People looked at my resume and said really? It just didn't speak that way. So I took the opportunity to take a Smith internship during my summer and work for the National Park Service. It really changed the whole trajectory.

I never of course went to work for the National Park Service but it lended credibility to my aim to do something different after business school and opened up a whole nother network. Use the unique resources that are here to pursue those kinds of opportunities and use your professors. Heidi's probably funded students have come out of the gsb. Malago has definitely funded students that have come out of the GSB personally, we have funded students that have come out of the gsb. So use that network in a respectful way. But it's a great network and it's not self serving.

It's quite in the spirit of making the world a better place really. And generally I think the students here want to support their classmates and want to see that in the world. I'll add another point. Take the four classes that these folks teach. Honestly, it'll get you most of the way. The certificate in Public Management and Social Innovation. Learn so much.

Can I shift to the alumni? So for the alumni in the audience who may be thinking about how they could be more effective in their philanthropy or want to dabble in impact investing, any kind of advice you would offer to alums on how to learn more, how to think about moving capital effectively. Anyone want to share a few thoughts? Who'd like to start? Heidi, you want to start? Sure. I would say be expansive in what impact means to you. I mean I think we need so much and we need it so quickly.

I would not fall prey to how sexyperism can be in the impact space. It's got to be perfectly measured and perfectly defined and sit in this rubric and check all the boxes and then it's impact. I think we will hear from speakers even later today who will say what I Do is an impact. And I would say you might be a person of color investing in women and people of color. And just by I've seen it in my own work.

Just by having fund managers, CEOs, execs who represent a different slice of our society, who are people of color living and leading in excellence, that creates profound ripple effects in an organization. So if you're in that, to me that's impact. If you're in a venture capital role and you decide I'm only going to fund people of color if you are in a lending position and you do the same if you, I mean there's people say mentoring, but I think allyship and shadowing and shine theory can work just as well, if not better.

Bring that next generation with you. Bring them into those rooms, put them under the spotlight. I think GSB'ers love to give advice. Feels good. Let's do info interview. But take the action. Mentoring is not just advice. It's putting someone in a room, giving them the mic, shining a light on them, inviting them in front of a classroom.

Seeing someone like Neha in a lecture position is awesome. We did not have this five years ago. Impact can take lots of shapes and forms and I would just be expansive in how you think about what it means to you and how you can contribute to it and take action. It doesn't have to fit in this perfect box and done by these practitioners who've been at it for a while. I think there might be a lot more impact potential in your day to day lives if you take a more expansive view of how you might define it.

Such great advice. Other thoughts that folks have for the alumni in the room. I'm going to double click on that a little bit and my advice would be to learn by doing so. When we work with the families at Jasperidge, once somebody decides they want to do impact investing or grant making or whatever, there are a number of different strategic questions and challenges they have to address to be impactful. But actually where more people get stuck is the step before that, which is getting to that point where they're ready to start deploying and then playing in the sandbox today.

And it's actually those behavioral behavior barriers that stop more people than the latter strategic barriers. I would take a page out of the GSB Impact Fund where often the best way to learn is by doing. Going back to what we were talking about. Don't let perfect be the enemy of good. Take your best shot. Do what you're interested in doing with whatever version of impact measurement or strategy, et cetera, you have, and let that process of doing it be the way that you continue to get better.

We often hear from family members who are in their 60s or 70s or even 80s, that man, I wish I had started earlier. We never hear from those who started young or those who got their kids involved very young. I'm Talking to a 15 year old this week. We never hear from them saying, damn, I wish I'd waited before I got started. Just do such great advice.

I would say just. And I was a little late coming to this admittedly, but I found it really interesting. I mentioned talk to people that have different perspectives, but read research from people that have different perspectives and read research in general, which I found just really, really powerful way to kind of think about the tools that might scale one day and what are some of the uneven underpinning ideas. Bring research ideas to folks who are part of the university and professors that are pursuing different areas and maybe share a coffee around what you think you're working on and how it might show up in a case so that others can learn over time. Because part of what we need is a systematic way to address many of these different systematic challenges across impact, including climate, as was mentioned before.

But systematic bias is another one where I spend a lot of time and that discussion is critical to moving our collective work forward. Thanks, Karen. And I would say I'm all for learning by doing and being expansive and thinking about that. But I'm also, I think if there you should be intentional, there should be some intentionality in what you want to do with your money as well, since we're talking about investing here and there's different money serves different purposes. Some money you're putting into things that are going to fund your retirement and you want to kind of screen it for social stuff and that's great.

That's one kind of impact investing. But there's another kind that some of you might be interested in. It's not for everybody where you're deeply thinking about a problem and and then you really do need to think about what is the right kind of capital to solve that problem. What are the different ways that you might intervene and look at the research and data that goes along with that. There's a ton of stuff that is funded that's impact oriented, that does not really pass the impact test later down the road.

And so people know me, I'm like a believer in rigor and intentionality and I think you should bring that to this space as well. Thanks so much. Such wonderful advice Both for students and alums. Let's turn it over to students alums. Now. We have just time enough for a couple questions and we have some mics circulating. So is there a question for the panel? If you raise your hand, we will bring a mic over to you.

How about if you wouldn't mind, here comes the mic behind you. Yeah. Thank you very much for speaking to us. My question is about financing hybrid organizations. So I feel like a lot of problems. You need to sort of approach it both from a for profit and nonprofit perspective.

So how do you feel about financing hybrid organizations? Would you say it's a good idea or sort of gets into a great area? Who has thoughts on financing hybrid organizations approaching different ways, different models? 100%. I think it goes to what we've been saying about start with the problem, let that guide you to the right solution. And as you say, sometimes it's a impact investment, sometimes it's a grant, sometimes it's a policy advocacy strategy. I think one thing you can think about is is there a single entity that is very good at both, or do you actually want to fund a portfolio of entities that can really leverage different strategies and different issue areas? It'll look differently. Yes.

Over here. Is there a hand? Sorry. Hi. Hello. Thank you so much. This was great. What are some of the most interesting applications of AI that you've seen in your investing? Oh, wow.

Fascinating. AI and investing in philanthropy. Thoughts briefly? Well, whether it's AI or machine learning, I've decided that as there's. There's some fine lines here, but one of the interesting things that it's being done to use is targeting and interventions. If you can use big data to understand the demographics of an area and predict what's going to happen there. I'm talking specifically about an organization called Educate Girls that operates in India.

Get out of school girls back into school. Using machine learning and AI, they're able to look at the entire Indian continent, understand where the problem is the biggest and where it's predicted to be the biggest, and really target their resources in those areas so that they much more efficiently use the capital that they have. That's one. I've seen it in a lot of different places, whether it's in different education, conservation, whatever. Targeting is a good use of it.

I was looking at Professor Narako's work at Stanford Law School. Many of you may have seen his great work on ChatGPT. If you're selling a Corolla, ChatGPT suggests you sell it for about 1000 bucks less. If you have a black sounding name and like Bob wants to sell a Corolla vs Jamal wants to sell a Corolla and Jamal is given the lower price. Black women face the largest discrepancy.

So you start. Moody's basically has 3,000 frontline analysts that are underwriting with augmented AI, different algorithms that are popping up and causing the prices of different stocks, states, countries, et cetera. So you can imagine some of the challenges with if it's just a black sounding name, without any evidence to the contrary, these algorithms could have disastrous impacts on financial underwriting and risk tolerance in the overall financial system.

Any other brief response? Can I just say one other that's really interesting is in the healthcare space, I don't know if any of you saw that research that came out where AI outperformed doctor diagnosis. In the paper this week we're seeing our organization starting to use AI and algorithms for treating patients in a lot of parts of the world, particularly for women. This is what made me think about it. Women are treated very poorly by the health care system. This is a way to overcome the biases that are built into that. That's another super interesting application that we've seen.

There's also just so much low hanging fruit. I think it's, it's always fun. Like what's the most innovative, right? Well, sometimes it's just like empowering essential workers to do the work that they do and reach more people more easily. We have an enormous shortage in healthcare workers, so. And they spend a lot of their time on billing, on admin, on prep and so if you can just take out. So I see it as a replacement for labor within key industries like education. Right.

So there's a great company called Magic School which is really helping teachers who are feeling burned out to get AI enabled personalized homework assignments and lesson plans for students. We're seeing it again in the healthcare space. Just allowing these incredible specialists and clinicians to do what they were trained to do and to relieve them from the administrative burden, which is really a huge cost drag on our healthcare system. And when you can do that, you can start to address some of these access and affordability issues. So sometimes it's the most boring stuff that's going to have the most interesting impact.

So with that gang, we're going to have to regretfully call our panel to a close. Really appreciate all the perspectives. Are all of you going to be able to stay around for the reception later? If there's other questions. But we really appreciate your time with us, so please join me in thanking our panelists.

PHILANTHROPY, INNOVATION, LEADERSHIP, IMPACT INVESTING, SOCIAL INNOVATION, STRATEGIC PHILANTHROPY, STANFORD GRADUATE SCHOOL OF BUSINESS