I joined the MIINT competition, because I believe that impact investing offers a great chance/opportunity for a synergistic collaboration with the public sector. Impact investing has enormous potential to help address development challenges in emerging economies. It can also act as a strategic partner of governments in advanced economies to tackle social issues; especially now when it is critical to adapt to existing structures.

Prior to commencing the LSE MPA, I worked as a social business consultant with Professor Muhamad Yunus at Yunus Social Business. Here, I supported the development of potato farmers in order for them to become formal suppliers of McCain Foods Ltd. From this experience, I learned social enterprises could deliver public goods effectively and adapt to changing circumstances easier than heavy governmental bureaucracies, especially in developing countries. Concurrently, I also realised most social enterprises lack the impact measurement tools, social policy knowledge and long-term view to successfully solve a specific social need. I had pitched about the social enterprises to investors, but it remained a puzzle to me what criteria they used to make their final decision. It is with this experience in mind that I joined the MPA-MIINT team. For me, it was a chance to add to my prior experiences by learning how things appear from the investor’s perspective. Through the MIINT competition, I had direct experience of:

1. sourcing social enterprises
2. assessing their investment readiness
3. completing the due diligence process to justify why they were worth the investment

Having worked with social enterprises before and knowing that London is Europe’s hub for social entrepreneurship; I thought this would be an easy task. However, it ended up being harder than anticipated.

I approached the competition from a perspective of someone with experience in the sector, but aiming to work in the public sector. During the competition I wanted to discover how impact investment and public policy could converge to deliver public goods more effectively and of a higher quality.

There is an ongoing discussion on how to define impact investment. The Global Impact Investing Network (GIIN) defines impact investment as “investment made into companies, organizations or funds with the intention to generate measurable social or environmental impact alongside a financial return.”

Impact investing challenged the long-held view that social and environmental issues had to be addressed by altruistic donations and that market investments should exclusively focus on achieving and maximising financial returns. Social, environmental and developmental needs have to be addressed creatively, sustainably and with flexible mechanisms and for that we need:

1. the financial muscle of the private sector
2. the altruism of the philanthropist
3. the organizational structure the public sector

Governments are already supporting impact investment, for example in the UK, the governments provide a 30% tax relief for social investments. The European Union created the “European Social Entrepreneurship Funds” to enable a better dialogue between entrepreneurs and impact investors.  In 2013, the G8 leadership launched the Social Impact Investing Forum to enhance global collaboration on impact measurement, assess allocation, mission alignment and international development.

These examples show the connection between the public sector and impact investment already exists and it is for us – MPAers and not MBAers– to strengthen this relationship. Social enterprises with correct guidance in how to successfully deliver a public good and thorough impact measurement strategy can become, if they are not already, key players in policy making. Impact investing is certainly not the panacea for poverty reduction and many questions and issues have to be further explored. But what is true is that future policy makers have to lead this process and the MIINT competition is an excellent opportunity to get a glimpse of the sector and network with key stakeholders.

 Ingrid von Schiller is in her second year of the LSE Master of Public Administration.