The Intersection of Finance and Social Justice

PADM-GP 4313 - 001

The Intersection of Finance and Social Justice

Spring 2018

Class Information: Tuesdays 4:55PM - 6:35PM, BOBS Room LL149

Andrea Armeni

Office hours by appointment

Prerequisites:CORE-GP 1021 and CORE-GP 1022 or URPL-GP 2660; PADM-GP 2147 recommended

Course Description

This course explores the notion of finance as a tool for social change. It provides an overview of different approaches to the question of aligning investments and values and aim to empower the student with a framework for the evaluation of the role of finance in society along a continuum from “avoiding the bad” to “building the good.” It is geared toward both finance and social change practitioners.

This course is not about impact investing; it is, however, about what impact investors ought to take into consideration: how finance and social change strategies intersect. Using impact investing as a starting point – but not an end point – this course provides a critical overview of the opportunities for finance to contribute to social change, and for social change to inform finance. It covers emerging strategies ranging from divestment in the public equities markets to direct investments into social enterprises, touching on some of the major topics and current challenges, with the aim of empowering current and future practitioners to think about finance and social change in novel ways.

The course will explore the relationship between racial justice and finance as a case study on the capital-based approaches for a social change agenda.

Course Structure and Objectives

This course starts from a historical perspective, looking at different models and precedents for the advancement of social change outcomes through finance. It then explores the current approaches and provides a conceptual framework for their critique. A focus on racial justice as a topical area offers the possibility for students to analyze more in depth the opportunities and challenges of driving social change through finance.

Each session is designed so that the student receives:

-An overview of the issue

-An understanding of why the issue matters

-A conceptual framework to think about the issue independently

At the end of the course, the student should be able to understand how a practitioner would think about different approaches in social finance, should be familiarized with the main debates in this space, and should have a basis from which to evaluate social finance opportunities from the perspective of social change.

Required Readings

Each session centers on a presentation and a guided discussion; students are expected to have completed the readings prior to class to participate meaningfully in the discussion.

The longer readings provide needed context and should not be overlooked. It is recommended that you do all the reading; if that is not feasible, you should read the shorter pieces and at the very least do a close skim of the longer ones; the most relevant selections will be pointed out. You will also receive a beach reading list of materials that may be useful and of interest if you wish to go deeper with the topic, either during the course or after.

The readings will be available via NYU Classes and the bookstore.

It is expected that the final project will lead you to sources well beyond the required readings.

NYU Classes

All announcements, resources, and assignments will be delivered through the NYU Classes site. I may modify assignments, due dates, and other aspects of the course as we go through the term with advance notice provided as soon as possible through the course website.

Academic Integrity

Academic integrity is a vital component of Wagner and NYU. Each student is required to sign and abide by Wagner’s Academic Code. Plagiarism of any form will not be tolerated since you have all signed an Academic Oath and are bound by the academic code of the school. Every student is expected to maintain academic integrity and is expected to report violations to me. If you are unsure about what is expected of you, ask.

Henry and Lucy Moses Center for Students with Disabilities at NYU

Academic accommodations are available for students with disabilities. Please visit the Moses Center for Students with Disabilities (CSD) website at and click on the Reasonable Accommodations and How to Register tab or call or e-mail CSD at (212-998-4980 or ) for information. Students who are requesting academic accommodations are strongly advised to reach out to the Moses Center as early as possible in the semester for assistance.

NYU’s Policy on Religious Holidays

University policy states that members of any religious group may, without penalty, absent themselves from classes when required in compliance with their religious obligations. If you expect to be absent for a religious holiday, please notify me in advance; in that way, we may be able to arrange for a recording of the session. You will not be penalized for anything missed. If you foresee missing two or more sessions for religious holidays, you may want to consider taking this course at another point.

Class Policies

Attendance and active participation is fundamental to this course. Students are expected to be ready for class in time and be engaged throughout. If electronics prove to be a distraction, I reserve the option to ban electronics from class. You can expect to be called on at any time and contribute meaningfully to the discussion.

To the extent that I will rely on slide decks for the presentations, those will be made available after the class on NYU Classes.

Late submission policy: no late submissions will be accepted.

Response time: it is best to contact me by email. Please feel free to email multiple times if you do not receive a response within the time of your liking.

Evaluation

Your course grade will be determined as follows:

Active Class Participation: 25% of total grade.

Participation is awarded based on punctual attendance (one unexcused absence or late arrival is permitted) and active engagement in class discussions. Missing or being late for two or more classes for the semester will negatively impact your participation grade. Extraordinary circumstances include religious observances and illness but you must give notice via email as soon as possible.

If you foresee missing a class due to personal obligations, please notify me via email but also note that it will count as your one allotted unexcused absence. All students benefit from high levels of participation, so you are expected to do readings prior to class, attend class, and contribute to the discussion. Attendance is taken at the beginning of every class and I will be making note of those who routinely participate in the discussion.

A note on the assigned reading: while you will not be quizzed on the assigned reading, your ability to understand the class discussions and to meaningfully contribute to them will be seriously impaired. Your grade will likewise be affected by a clear demonstration, whether in class or in the assignments, that you are not familiar with the main concepts in the readings.

Memo Questions: 35% of total grade.

At the end of each session, with the exception of session six, students will be given a “memo question” (for a total of five “memo questions”) that is due by 11:59 PM on the evening prior to the following class.

Each memo question is an opportunity for the student to lay out her or his thinking on the issue offered for analysis – as it would be presented to someone making a decision based on the student recommendation. Memos are expected to be one to two pages in length, except that one memo, at the student’s choice, should be a longer piece (4-5 pages) and offers to opportunity to lay out the thinking in more depth.

An additional one-page final memo will be assigned prior to the last session, and will be due at the end of the exam period.

All memos above should be single-spaced, 12 point Times New Roman font, 1-inch margins, and should bear your name and a descriptive title at the top.

Group or Individual Project: 40% of total grade.

The project assignment will be discussed in detail in Session Three. It will involve an analysis of an issue discussed in class that builds on the conceptual framework presented throughout the course. The emphasis of the project should be on the competent application of the conceptual framework to a specific and well-defined issue, rather than on getting to the correct answer.

Students are expected to pick a narrow topic, research and analyze it, and prepare a spoken presentation of the analysis. While I will be available to give some feedback on the choice of topic in case of major doubt, please note that you will also be graded on the choice of your topic and should not rely primarily on me for topic assignment.

The final product will take the form of a pre-recorded five to ten minute spoken presentation, which can be aided by a background slide deck (PowerPoint or equivalent). Rather than presenting in class, students are asked to submit a video of the presentation – as if it were the presentation to be delivered in class – to me and to every other student, three days prior to Session Seven. Each student should be prepared to address questions on their presentation in class during Session Seven.

Students will not be graded on the aesthetics of the video; it can be recorded on a smartphone, so long as it’s clearly audible. Students will be graded on topic choice, content, underlying research, analysis, clarity of the presentation, and ability to address questions in class.

It is mandatory for each student to review every other student’s or group’s work and be prepared to be called upon to comment in class. Each student will bring to Sessions Seven:

●At a minimum one question for one of the fellow students, and ideally a list of questions related to the various presentations.

●A statement, ranging from one word to one paragraph, on what theme the student has noticed across the various presentations.

Students can work individually or in groups of two or three. If students work in a group, they will still be graded individually on their presentation and ability to address questions in class.

Overview of Semester

Grading Scale and Rubric

Students will receive grades according to the following scale:

There is no A+

A = 4.0 points

A- = 3.7 points

B+ = 3.3 points

B = 3.0 points

B- = 2.7 points

C+ = 2.3 points

C = 2.0 points

C- = 1.7 points

There are no D+/D/D-

F (fail) = 0.0 points

Student grades will be assigned according to the following criteria:

(A) Excellent: Exceptional work for a graduate student. Work at this level is unusually thorough, well-reasoned, creative, methodologically sophisticated, and well written. Work is of exceptional, professional quality.

(A-) Very good: Very strong work for a graduate student. Work at this level shows signs of creativity, is thorough and well-reasoned, indicates strong understanding of appropriate methodological or analytical approaches, and meets professional standards.

(B+) Good: Sound work for a graduate student; well-reasoned and thorough, methodologically sound. This is the graduate student grade that indicates the student has fully accomplished the basic objectives of the course.

(B) Adequate: Competent work for a graduate student even though some weaknesses are evident. Demonstrates competency in the key course objectivesbut shows some indication that understanding of some important issues is less than complete. Methodological or analytical approaches used are adequate but student has not been thorough or has shown other weaknesses or limitations.

(B-) Borderline: Weak work for a graduate student; meets the minimal expectations for a graduate student in the course. Understanding of salient issues is somewhat incomplete. Methodological or analytical work performed in the course is minimally adequate. Overall performance, if consistent in graduate courses, would not suffice to sustain graduate status in “good standing.”

(C/-/+) Deficient: Inadequate work for a graduate student; does not meet the minimal expectations for a graduate student in the course. Work is inadequately developed or flawed by numerous errors and misunderstanding of important issues. Methodological or analytical work performed is weak and fails to demonstrate knowledge or technical competence expected of graduate students.

(F) Fail: Work fails to meet even minimal expectations for course credit for a graduate student. Performance has been consistently weak in methodology and understanding, with serious limits in many areas. Weaknesses or limits are pervasive.

Detailed Course Overview

SESSION ONE: Introduction to the course, and the role of finance in society

• Course content overview

▪Overview of topics to be covered and recurring themes

▪Why you are here and what you would like to get out of it

• Logistical overview

▪What you can expect and what is expected of you

▪Communications and professionalism

▪Clarifications and agreements

• Presentation

▪The historical role of finance in society and the rise of financialization

▪How is “now” different?

Assigned Readings [to be completed before class]:

Konczal, Michael. “Frenzied Financialization.” Washington Monthly. November/December 2014.

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Bower, Joseph L., and Paine, Lynn S. “The Error at the Heart of Corporate Leadership.” HarvardBusiness Review. (

Fantacci L. (2017) “Resocialising Finance to Exit the Crisis.” In: Magatti M. (eds) The Crisis Conundrum. Palgrave Macmillan, Cham.

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Motta, Wallis. “Self-Funded Social Impact Investment: An Interdisciplinary Analysis of the Sardex Mutual Credit System.” Journal of Social Entrepreneurship 8.2 (2017): 149-64. (available at

Foroohar, Rana. Makers and Takers: The Rise of Finance and the Fall of American Business. (first two chapters)

Singer, Joseph William. The Edges of the Field: Lessons on the Obligations of Ownership. (first two chapters?)

Assignment of Memo Question One (due the evening prior to Session Two):

“The function of the financial system is to assign capital to its highest value use.” Discuss.

SESSION TWO: A historical and sectoral overview of social change in finance across asset classes and across actors

• The history, emergence, and evolution of social and values-based approaches to finance: drivers and trends (pick up from Session One)
• The revocation of the corporate charter, the Quakers, the nuns, and South Africa
• The rise of divestment and shareholder activism
• The Community Reinvestment Act, CDFIs, CDVC, and impact investors
• The Why of social change through finance: finance vs. government, finance vs. philanthropy

Assigned Readings [to be completed before class]:

Huyssen, D. (2015). "From Socialism to Hedge Fund: The Human Element and the New History of Capitalism." Journal of World-Systems Research 21(2): 287-312

McLaughlin, E. (2012). "An experiment in banking the poor: the Irish Mont-de-Piété, c. 1830–1850." Financial History Review 20(1): 49-72.

World Economic Forum: From the Margins to the Mainstream. (

Behar, Andrew. The Shareholder Action Guide. (excerpts)

Cloyd, Mary Ann. “Shareholder Activism: Who, What, When, and How?”. Harvard Law School Forum on Corporate Governance and Financial Regulation. 7 April 2015. ( and full report:

Pope Francis, Encyclica. “The Need to Protect Employment.” Laudato Sii. (Sections 124-129) (available at

Assignment of Memo Question Two (due the evening prior to Session Three) – forthcoming

SESSION THREE: Current Mainstream Approaches

• Different players in different roles: foundations, billionaires, laborers, and the nuns’ pension funds
• Influencing decision makers in different areas, from asset owners to fund managers
• Public market strategies: the issue of governance and the issue of additionality
• Case analysis: CalPERS’s “Three Types of Capital” approach
• Direct investments and social enterprise as the mainstay of impact investing
• Place-based investments: direct funding to historically undercapitalized communities
• Finding impact in unexpected places
• What does ‘impact’ mean in each asset class?
• Discussion of project assignment and presentations due prior to Session Seven

Assigned Readings [to be completed before class]:

“Investor Statement on the Dakota Access Pipeline.” (

Baldini, Noelle S. “Measuring the Quality, not Quantity, of Job Creation.” Cascade No. 90, Winter 2016. (

California Public Employees’ Retirement System, “Total Fund Investment Policy.” (selections) (

Heron Foundation, “Investment Policy Statement”. December 5, 2016.

“Investor Group Urges Blue Apron to Ditch No-Vote Shares.” Council of Institutional Investors. (available at

“FTSE Russell Voting Rights Consultation – Next Steps.” (available at

Lund, Dorothy Shapiro, “Nonvoting Shares and Efficient Corporate Governance”. September 22, 2017. (available at

Serafeim, George, and Grewal, Jody. "ESG Metrics: Reshaping Capitalism?". March 2016. (Harvard Business School Technical Note 116037)

Rulemaking Petition by the Human Capital Management Coalition to the Securities Exchange Commission. July 6, 2017. (available at

Assignment of Memo Question Three (due the evening prior to Session Four) – forthcoming

SESSION FOUR: The impact investing approach to social change via finance: a critique

• Does impact investing advance social change, and if so, how?
• Varying perspectives on what “social change” means
• TPG’s RISE Fund and the Buen Vivir Fund
• Additionality, intentionality, crowding in, blending and subsidizing capital
• The pursuit of social justice in finance: power, agency, accountability, value extraction, and the allocation of risks and returns
• Wealth inequality, tax avoidance, and the investor’s public role
• Strategies for transformation: incrementalism, sequencing, and “escape valves”; “avoiding the bad” and “creating the good”

Assigned Readings [to be completed before class]: