Editor’s note: This post is part of our SOCAP11 conference coverage in San Francisco. Check in tomorrow for Day 2 coverage of SOCAP11.
Hundreds of innovators, investors and social entrepreneurs invaded Fort Mason in San Francisco yesterday, armed with conversations swirling around buzz words including meaning, sustainability, impact investing and scale. SOCAP11 kicked off today with a strong start, beginning with a focus on meaning and its preservation. As the day passed and sessions adjourned, here are some key takeaways and themes that emerged from Day 1 at SOCAP11.
The Quest for Funding
The Ultimate funding issue to solve: how can we maximize impact for the target population? – Kevin Starr, Mulago Foundation
One of the biggest issues that is being tackled at SOCAP is: how do we support large scale ventures as well as smaller capital for early stage social enterprises? The scarcity of support and tricky frameworks in this space means that we have to be aware of how we approach the concept of funding. The need cycle of funding currently serves different purposes: small grants for start up prototypes and then evolving into seed capital for scale. Kevin Starr from the Mulago Foundation framed this quest best with the following questions: Is it needed? Does it work? Will it get to those who need it? Will they use it well?
Opening Panel Session. L to R: Kevin Jones (SOCAP), Rosa Lee-Harden (SOCAP), Kevin Starr (Mulago Foundation), Saba Gul (Bags for Bliss), Steve Wright (Grameen Foundation), Matt (Social Entrepreneur)
Starr’s take almost seems cautionary, but for good measure. Given the loose framework for this space, the dissemination of capital needs to be thought out and implemented strategically to pave way for the next generation of ventures and continuously improve on the quest for funding. A secondary perspective on funding would be from a regulatory standpoint, which could also be the cause of the scarcity in early stage funding. In the democratization of impact-investing session, Dana Mauriello from Profounder as well as Michael Van Patten from Mission Markets touched upon the gray areas of regulations in which solutions exists to serve this gap – in particular Regulation D504 and D505. However, in order to truly scale, we need to work within the current regulatory structure and with the gate-keepers (institutional investors, banks, etc.) to make this sustainable.
People powered track Statistic: 98% of investors are not allowed to make impact investments because they aren’t accredited
Universal and effective metrics
Once again, the topic of measuring social impact surfaces at SOCAP11. There is a reason why this theme resurfaces frequently in almost every session I attended, and this is because as a collective, we struggle to find a common language to communicate our definition of social impact. Steve Wright, Director of Social Performance at the Grameen Foundation highlighted this issue best in the opening panel session that we need to manage what matters instead of holding up each social enterprise against a ruler and seeing if they measure up.
What we need to recognize is that in anything, there will be an opportunity cost/tradeoff when we’re looking at doing good vs. making return. The real question should be: to what extent? What we also need to come to terms with, is that measuring the social impact of a dollar invested is relative to a person’s definition of impact. The Business Case for Impact Metrics session alluded to benchmarking as a solution to find a common ground to define social impact, but its feasibility to implement remained in theory. Reality is, high impact rarely means high return or even quick results particularly in the energy and environment ecosystems. The conversation of metrics also resided in the disparity between what investors are looking for: measurement, and what end-users care about at the end of the day: a quality product. The social impact story is just icing on the cake. A long-term solution to this age-old question would be to change consumer mindset as a driving force for products and metrics.
Good news is that we are breaking ground on answering this question. Notably, the Global Impact Investing Network has had some great initiatives to advance this conversation. Yesterday, they released their first Performance Analysis for the Impact Investing Industry and have been getting signed support from impact investing leaders for standardized impact measurement.
Tapping into the global ecosystem
There is a myriad of approaches in the social innovation and social entrepreneurship sector. The initiatives and conversations at SOCAP11 draws from the wealth of knowledge from a design perspective to innovation energy solutions. Giles Cassels highlighted in the afternoon plenary session just how powerful as a collective this movement is through the crowd-funded MicroPlace platform.
“Until the great mass of the people shall be filled with the sense of responsibility for each other’s welfare, social justice can never be attained.” – Helen Keller
Panel Session: Igniting a global community of impact investors. L to R: Patrick Donigue (Hoop Fund), Jo-Ann Tan (Acumen Fund), Natalia Oberti Noguera (Pipeline Fund Fellowship), Giles Cassels (MicroPlace), Scott Anderson (First unitarian Society Microfinance Fund)
There are key aspects of this global ecosystem that we should keep in mind to create a community that would rally behind a cause: 1) We should leverage current networks; 2) It starts with an experience of social impact; 3) Valuing offline connections as much as online; 4) Remove degrees of separation; to 5) open access to different perspectives. Natalia Oberti Noguera, founder of the Pipeline Fund Fellowship stressed upon the importance of diversity in culture, embracing cross-generational knowledge and being comfortable with ambiguity. Jo-Ann Tan from Acumen Fund built upon this with the importance of sharing, learning and leading by doing as a global like-minded community.
We need to build a movement that investors and governments would chase, and not the other way around. It is evident by the plethora of resources at SOCAP11 that this is possible. The creation of a social capital markets has already started – the real question is: are you part of this movement?
*Featured Pic credit: www.socialcapitalmarkets.net