Philanthropy in Utah took a large step on Jan. 29 when the business school at the University of Utah announced the creation of the James Lee Sorenson Center for Global Impact Investing through a $13 million personal gift from Sorenson himself. While there had been activity around impact investing in the Intermountain West, this gift put Salt Lake on the map in a new way. Why was this so different? There are several reasons.
First, the gift recognizes that having an impact matters. Far too many philanthropic donations do not lead to long-term change. Second, the gift was meant to influence future generations. By funding curriculum development, Sorensen is changing the way business is taught in Utah and hopefully at other business schools, as well. Third, the gift supports the University Impact Fund which gives students from the University of Utah, Brigham Young University, Westminster College, Utah State and many other colleges the opportunity to learn about impact investing from a hands-on perspective.
The hands-on work generated by the University Impact Fund (UIF) is directed by Lewis Hower, who is now the director of the new center. UIF is an innovative program through which students, leading impact investors and social entrepreneurs from around the world cooperate on transactions that make the world a better place.
Impact investing has been around for a long time and has been called by different names. At its best, impact investing is about the process through which private money is spent to support private businesses which bring significant social changes and in some cases, environmental improvement. In many situations, the impacts are measured both socially and environmentally.
A personal example of how students have learned from experience involves Wilfried Eyi. As a student at Brigham Young University, Wilfried began working on one of the UIF deals involving a fishery supply chain in Bali. Before UIF got involved, the fishermen made a few cents per fish and the catch went through two brokers with half of the fish spoiling before being taken to foreign markets. The new model purchases the fish directly from the fishermen, pays them three times more than they were being paid and introduces coolers to reduce waste. The chance to gain real life experience in the impact investing field has been meaningful to Wilfried and to the fishermen in Bali.
Sorenson said of what he is trying to do with the donation that, "I'm interested in philanthropy that has the potential for significant, scalable, self-sustaining, social change. The James Lee Sorenson Global Impact Investing Center does that as it provides students an immersive eductional experience as they help philanthropies and early stage impact investors find and make investments in enterprises that address humanitarian, social, and environmental problems and opportunities."
One of the great things about this donation is that a trial balloon was launched when the UIF was founded in 2010. Many months have passed and Sorenson has a good sense of where this set of projects is going. Good philanthropy has all the types of attributes found in what is being done with the Sorenson Center for Global Impact Investing. This initiative has shown a willingness to create a smaller trial before launching a bigger effort. Long-term goals are clearly in place and the center relies on the positive forces of the private sector to drive social change.
John Hoffmire is the director of the Said Business School Venture Fund at the University of Oxford.