Rajan Kundra ignored it for a while. But eventually, that one nagging question — the one that had been bothering him for years — finally got to him.

It got to him even though Kundra had a pretty good thing going for himself up on Wall Street, where after a decade of hard work he had been named senior vice president at a major investment bank.

“But I was always facing the ‘What next?’ question,” says Kundra, WG’93. “It almost always permeated the way I thought about everything. Wall Street is an excellent training ground, and so a lot of people use Wall Street for that training and the skill building. But then they end up asking themselves, like I did, ‘What next?’ ”

Kundra, at least, didn’t have to look all that far for his answer.

Specifically, only about nine blocks.

That’s where he found the U.S. headquarters for the Acumen Fund, a social venture capital firm that has the stated goal of investing $100 million into promising young companies that can deliver results on two equally important fronts: profitability and social impact.

“We focus our investments on the macro level, with companies that we believe can deliver basic necessities to the poor,” says Kundra, who also previously worked as a Vice President at J.P. Morgan. “For the most part these companies we invest in are for-profit companies, focused on new business models and new market approaches.”

Acumen targets companies that serve the “base of the pyramid” — the very poorest of the world’s poor, more than 3 billion in number, who do not have access to even the most basic services. Acumen officials like Kundra, who serves as director of capital markets and energy portfolio, and fellow Wharton grad Omer Imtiazuddin, WG’03, who serves as health portfolio manager, believe their firm’s work can eventually touch the lives of 50 million people worldwide.

In short, they believe good businesses — profitable businesses — can do great things.

“I knew I didn’t want to go back to investment banking,” explains Imtiazuddin. “I grew up in Pakistan. I had always seen the poverty around me, and I think I always had a desire to make a difference in this world. I didn’t get that opportunity on Wall Street, given the hours and everything else. So having had that desire, I used Wharton as a sounding board to see if this was one of those things I really could make a career out of. I want my career to be something where I’d find great meaning beyond mere financial rewards.”

He’s not alone.

There is a real and quantifiable trend emerging in business today: An increasing awareness among business leaders of the enormous challenges facing the world — and, more importantly, a growing commitment among those same leaders to do something about them.

At the 2007 Wharton Economic Forum in Philadelphia, Rajat Gupta, former Senior Partner Worldwide, McKinsey & Company, said business must reinforce constructive contact and dialogue with society to “earn the right to serve. Corporate responsibility is not a luxury — we must work with partners to address problems facing society to shape social contract between business and society.”

At the 2008 World Economic Forum in Davos, Microsoft founder Bill Gates called it “creative capitalism” — “an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world’s inequities.”

And in a 2008 Financial Times essay, Wharton Dean Thomas Robertson asserted that pursuing positive global social impact is not just about doing “good,” but a logical business opportunity, not only for NGOs, but for multinational corporations. He wrote, “They transcend national borders and governments, have resources that may exceed those of governments, and may garner more confidence than governments. In addition to providing skills and resources, corporations can also implement social responsibility codes that help build a better environment in which to do business and that potentially can encourage economic development.”

In rising markets such as China and India, investment from Western corporations has been credited with everything from improving human rights and labor standards to creating an entire new middle class, while funds funneled through micro-finance organizations and firms like Acumen Fund are creating real results in improving health care, stimulating economic growth, and giving new hope to millions. Meanwhile, entrepreneurs and established companies alike are also seeking out new sources of energy, investing in promising new technologies, and implementing new programs and policies that will make sustainable use of natural resources.

Society as a Stakeholder

At Wharton, Dean Robertson has been promoting the idea of “business as a force for social good” since his arrival last summer. In his Financial Times essay, he challenged business schools and their graduates, defining “social impact” and “social responsibility” in part as “the ways in which businesses need to take into account not only their shareholders, but other stakeholders as well.”

The idea is intentionally broad, encompassing many initiatives and extending far beyond the administration.

“A lot of our students are interested in experience in developing countries, and giving something in return — but not just giving something away,” Robertson says. “Twenty-three percent of our students took jobs in other countries this year, and many of them chose India and China. We are seeing more and more students like them. These are students who are leaving Wharton with more of a social conscience and a greater willingness to go help the world. We find our alumni are turning to us, too, asking, ‘How do we give back?’”

This fall Robertson will formally launch the Wharton Institute for Social Impact, a new research center that will harness all of the School’s social capabilities under one initiative, allowing faculty and students to attack the world’s problems more effectively than ever.

The Institute will place Wharton at the forefront of the business world’s ever-sharpening focus on social entrepreneurship. It will arrive just as the students who comprise Wharton Social Impact — a group dedicated to using business skills to promote the greater good — prepare to host the prestigious national Net Impact conference for the first time.

The conference will bring more than 1,800 business students and professionals to Philadelphia to discuss the myriad ways business can create “social and environmental value.” Conference organizer Emily Schiller, WG’09, says interest in Wharton Social Impact — and the idea that business can do good things while also generating good profits — is at an all- time high.

“Year after year, the number of students who attend Wharton Social Impact’s events is increasing and increasing,” Schiller says. “We have 65 students from just the class of 2009 volunteering to help, and they’re not just signing a piece of paper saying, ‘I support the conference.’ They’re out there literally pounding the pavement and really doing substantive things to advance this cause. In class with my cohort, we’re having these conversations about what corporate responsibility really means — what it means for the reality of the job, and how that can work for a company and still make money.”

Profitability, Not Philanthropy

Schiller understands that concept — making money and serving the greater good — isn’t easy to grasp. This isn’t philanthropy, after all, it’s business.

“That’s a conversation we have every day at Wharton, and it’s something that’s really at the forefront of people’s minds,” Schiller says.

And not just at Wharton. A recent report from the Aspen Institute, a Washington, D.C.-based organization dedicated to fostering values-based leadership, surveyed MBA students from top business schools from around the country, including Wharton, and found that 26% said they were interesting in finding work that would allow them to make a “contribution to society.” That’s up from just 15% who said the same five years back.

The report also found current MBA students were “thinking more broadly about the primary responsibilities of a company” than students of the past, and that while the students continued to see generating profits as a primary focus for companies, an increasing number of them also said creating value for the communities in which they operate was also a major corporate responsibility.

“I came to Wharton because I wanted to understand what the profit motivations were to do something [with social impact], because ultimately, that’s what transforms business,” Schiller says. “But the thing is, we’re finding empirical evidence that beyond just breaking even, these strategies might be a more profitable way of doing things.”

Take Wal-Mart. America’s most dominant retailer may not have many friends among mom-and-pop stores and Main Street supporters, but this corporate giant has recognized the strategic value of doing things in a way that might be called “socially responsible” — especially when doing so results in better profits. With fisheries threatened by the twin stresses of over-fishing and environmental degradation, Wal-Mart in 2006 pledged to eventually buy all of its seafood from renewable fisheries.

The move required Wal-Mart to rebuild its entire supply chain, but the payoff is enormous: Wal-Mart ensures for itself a steady supply of controversy-free fish. The world’s oceans, meanwhile, will be protected.

“They realized over-fishing was draining the ocean’s population of seafood,” Schiller says. “And they knew that if they didn’t do something they would in the near future be taking a huge business loss. They said, ‘We need to change the way we fish.’ They did that.”

Those examples are especially plentiful, it seems, in the developing world — where they are needed most.

Forward-thinking entrepreneurs, academics, and long-established multinational corporations are pushing forward initiatives that negotiate the very balance Schiller and her classmates have struggled with: profits with social impact. The Acumen Fund, for example, is bankrolling companies that will do everything from improve ambulance service for India’s poor to offer cheap, accessible, quality obstetric care for millions of under-served pregnant women.

The much-lauded microfinance movement is one starting point.

The Microfinance Revolution

Developed by Nobel Laureate Muhammad Yunus, founder of the pioneering Grameen Bank, microfinance is essentially banking targeted at the extremely poor — the kind of people who had been ignored by the banking establishment for decades. By delivering small amounts of capital — loans as small as $100 — to the poorest of the poor, Yunus believed lenders could spark the development of new economies and tap into the long-ignored entrepreneurial talents of those mired in poverty.

The effects have been sweeping. The World Bank says microlending has directly impacted a half-billion people around the world, and Forbes estimates microfinance institutions delivered 33 million loans in 2007 alone.

“Traditional loans were not effective enough in getting the resources to entrepreneurs in developing countries,” adds Mauro Guillen, Wharton professor of management and director of the Joseph H. Lauder Institute for Management & International Studies. “Poor countries lack a really well developed financial system and so only the well-connected can get loans. So microfinance makes a lot of sense.”

It makes sense, Guillen says, for the simple reason that it’s effective. Many leading experts consider microlending one of the world’s most promising means of creating new small businesses, and new hope, for the world’s communities.

The idea of microloans has been expanded into businesses like GrameenPhone, founded by Iqbal Quadir, G’83, WG’87. Quadir partnered with Grameen Bank to bring 200,000 phones to Bangladeshi villages through GrameenPhone, serving 80 million people with an average of 400 people using each of those phones.

Quadir proposed that Grameen make $200 loans to women who would use the money to purchase phones, then sell fellow villagers airtime. The fees would allow the women to pay back their debt to the bank and support themselves and their families. Quadir also convinced Telenor, the Norwegian telephone company, to invest in his company and build the network.

GrameenPhone has become a raging success financially. A group of Americans who backed him originally collectively put in $1.65 million and got $33 million back eight years later selling their stake.

More important is the impact on the women, families, and villages that gained both connectivity and income.

Are there perils in microfinance? Certainly, says Guillen. Firms who get into this business must deliver loans only to those people who can make something of them — and, of course, eventually pay them back. Profitability, as always, remains the bottom line.

Yunus’s Grameen Bank in 2007 posted a profit of $1.56 million. Its followers are apparently doing well, too: MicroBanking Bulletin says a recent survey of more than 60 microfinance institutions from around the world revealed an average rate of return on loans of about 2.5%. While that rate of return won’t render hedge funds obsolete, it proves that the lending model can be sustainable for the long term.

“If this can create jobs, if it can enable people to be able to work in their household, and they can spend three to four hours a day attending to some kind of business, they can put back into the market whatever they produce,” Guillen says. “All of that can have huge impact. In developed countries, the bulk of the jobs are created by small business — dry cleaners, restaurants, repair shops. You cannot do it without small business. No economy can.”

A New Model of Social Entrepreneurship

Microfinance is only one financial innovation making a societal impact. Ian C. MacMillan, the Dhirubhai Ambani Professor of Innovation and Entrepreneurship; Professor of Management and Director of the Sol C. Snider Entrepreneurial Research Center espouses entrepreneurial philanthropy that supports business entrepreneurship under a for-profit model that attacks social problems and creates new societal wealth.

The basic thesis is that many social problems, if looked at through an entrepreneurial lens, create opportunities to launch a business that generates profits by alleviating the initial problem, says MacMillan.

In 2006, the Snider Center launched a Societal Wealth Generation program to spread the model by identifying societal problems, designing a solution, and then recruiting an entrepreneur willing to run the business. So far, projects under MacMillan’s auspices have developed software to manage HIV/AIDS treatment in Botswana, a high-end cookie company in a dirt-poor township in South Africa, and a Zambian animal feed business.

His ambitions are as huge as the problems he’s tackling.

“I try to distinguish between social entrepreneurship vs. societal wealth creation,” says MacMillan. “We are not talking about hot dog stands; rather we are trying to launch high-impact programs that help thousands, if not tens of thousands, of people.”

Sustainability at the Bottom Line

For developing nations that are rich in natural resources, sustainability is a core issue that has too long taken a backseat to short-term concerns. As Secretary of Planning and Economic Development in the Brazilian state of Amazonas, Denis Minev, WG’03, is trying to balance the environmental and economic future of a state, more than twice as large as Texas, that also happens to be blessed with some of the most pristine rain forests in South America. Minev aims to preserve them.

Since he’s taken over as secretary, the annual deforestation rate in Amazonas has been cut in half, and now stands at just 0.05%. At the same time, annual economic growth in the state has reached 9%.

Minev says he’s accomplished this through a variety of new programs and initiatives that encourage new growth in green industries. After state environmental preserves were established throughout the forest, Amazonas then staffed those with local residents, helping bolster local economies while also preserving virgin forest. Increased investment in science and technology is aimed at turning up new ways to tap into the wealth of the forest without cutting it down. Meanwhile, guaranteed pricing on sustainable forest goods — including rubber and oil products — has encouraged new growth in green business sectors. The state also built 28 new ports to help these new businesses succeed.

“Our main challenge is to make the forest worth more standing up than lying down,” Minev says. “And our policies are focused on such an equation being true.”

The truth is that no business can afford not to care about sustainability.


Steve Weinberg, WG’82, has been thinking about sustainable business practice since the early 1980s, long before it was trendy, and long before it was accepted as common sense. So it’s no surprise that, today, Weinberg runs his own company, Philadelphia-based National Foundry Products, a sales agency representing global foundries and forging plants, as sustainably and responsibly as he can.

“When it comes to my own backyard, is that I do what I can do,” says Weinberg, whose firm is also one of the founders of B Corporation, a Berwyn, PA-based group that promotes businesses capable of creating benefit for all stakeholders, not just shareholders. “At my office we telecommute. We do carbon offsets. I work out of my home office, so I offset my home office. We contribute to things to help businesses be more sustainable.”

Weinberg is also a board member for Sun Farm Networks, a New Jersey-based solar energy firm, founder of Sustainable Mount Airy, an organization in Philadelphia’s Mount Airy neighborhood that aims to foster “an inclusive, democratic approach to creating a just and sustainable community,” and cochair of the Philadelphia Sustainable Business Network. He’s the real-world embodiment of what Robertson envisions the Institute for Social Impact’s environmental role to eventually be: Identifying problems, finding solutions, contributing to the greater environmental effort, acting responsibly.

Of course, as Weinberg and others admit, there are limits. His company grew from sales of $3 million to $30 million over 20 years of hard work, Weinberg says, and more growth remains the ultimate goal.

“Being a sales organization, there’s only so much leverage I have,” Weinberg says. “I mean, they’re my clients. I work for them. In the metals business, there’s tremendous pressure for savings. Just trying to stay in business is the biggest concern for a lot of the people I work with. I understand you have to guard your bottom line. Besides, you don’t do anyone favors if you don’t stay in business.”

The Business Opportunity in Social Good

Tucker Twitmyer would agree. Twitmyer, C’90, WG’96, hadn’t planned a career in funding new energy sources. In fact, prior to joining Wayne, PA-based EnerTech Capital, Twitmyer had carved out a career in more traditional markets, first as a senior manager at Anderson Consulting and later as managing director of the private equity service firm Katalyst LLC.


While at Katalyst, though, he came into contact with the folks from EnerTech. He was intrigued by the opportunities presented in developing new energy sources. A few years later, he joined the firm himself.

As a managing partner, Twitmyer oversees investments into everything from solar power to oil and gas, energy grid improvements to energy efficiency. The firm manages three funds totaling nearly $370 million. It has invested in nearly 50 energy companies and helped push along nine IPOs. Its portfolio includes firms ranging from WellDog, which has developed a more profitable way to extract methane from coal beds, to Franklin Fuel Cells, which is working to improve the cost-effectiveness of fuel cells, to Advent Solar, which produces advanced solar cells that operate at lower cost.

Having been in the sector for more than a decade now, Twitmyer can attest to just how much interest in these new clean-energy technology has grown, both among the public and, more importantly, investors. And given that so many traditional businesses, and so many savvy investors, are now seeing the value in these potentially revolutionary technologies — technologies that could wean the world of carbon-based energy — Twitmyer says he truly believes clean energy does have a legitimate future.

He’s got another reason to believe, too: EnerTech’s investors are making money. Twitmyer says EnerTech delivered a 46% net return to investors in its first fund, and is currently among the top quartile in its second.

“We’re saving the planet one company at a time,” Twitmyer says. “And hopefully while we’re doing that, we’re making outsized returns for those that have chosen to invest in us.”

Leadership for a Movement

From resource conservation to fighting poverty to simply being better citizens of the world, the Wharton community from Dean Robertson on down believes business can, and should, strive to be successful both on the bottom line and as citizens of the world.

“There are more and more students getting interested in getting exposed to the problems of the developing world — thinking about these problems,” Guillen says.

The popularity of the Wharton Social Impact clubs proves his point. So, too, does the increasing number of students like Schiller who are coming to Wharton specifically to launch careers as social entrepreneurs. Then there’s the remarkable work already being done by such Wharton faculty as Ian C. MacMillan, who recently worked with residents of Zambia to help launch a sustainable new chicken feed plant, and Eric Orts, who has been tapped to lead the Initiative for Global Environmental Leadership.

Robertson says business — corporations, entrepreneurs, academics, students — have an even greater challenge before them, especially when it comes to solving global poverty.

In this world of 6.6 billion people, more than half live on less than $2 a day. Handouts from developed nations can only do so much.

But he argues that business has the potential to deliver what handouts cannot: hope.

“These countries lack management capability, and they just get a lot of money thrown at them,” he says. “But there’s some very considerable debate around the idea that, although it’s nice to engage in foreign aid, it may be more important to develop capabilities in those developing countries so they can actually become self-sufficient.”

This is where business schools can help, he says. And the Institute for Social Impact should position Wharton to be able to fill that role. But even Robertson admits he struggles to quantify what the school could reasonably expect to accomplish.

“The major business schools have been redefined as global business schools,” he says. “Wharton does a lot, really, in teaching social initiatives. But the important question, I think, is really: What can you really do? “

Business’ may not have all the answers, but it may well have some of them.

Says Acumen Fund’s Kundra: “There is an entire emerging space around social entrepreneurship and social investment. We’re in the early stages of this opportunity, where we have people who are financially trained, accounting trained, redeploying themselves and turning this into a new career. In the past, I think people considered working at a nonprofit as a step toward retirement. That whole mindset, I think, has been broken.”

This article includes material from Knowledge@Wharton.