Having listened to much of the commentary (blog, twitter and alike) at this year’s SOCAP09 conference in San Francisco, I thought I’d write this small piece as an addendum to what’s happening internationally and echo the themes which we are experiencing in the semi-rainbow nation. I will write a sequel to this blog entry once I attend and participate at this year’s Kaelo Business Summit (I am sitting on the Creative Capitalism and Measuring Social Impact panel if any of you out there in the internet ether wish to say ‘hi’), and mention any other interesting discussions there.
So Lets jump into it:
Metrics, bloody Metrics: Never has the Social Value Metrics debate rolled off the tongue so sexily and consistently in the worldwide SE community. At SOCAP, talk of the town was most definitely Margot @ Rockerfeller’s work on finding a single taxonomy for social value mertrics. I guess when the groundswell of a ‘market place’ for impact investing begins, finding those universal sets of indicators to really attribute what’s going down in social / environmental impact becomes the name of the game.
At Heart, we’ve migrated onto Salesforce.com in anticipation of Acumen’s Pulse portfolio management system which has been built with Google. Once that little piece of gear gets cranking, and we begin to report our social & environmental impacts through Pulse, so does the centralised repository start aggregating and delivering benchmarks (I always knew I would put my indexing, benchmarking and financial attribution skills to good use).
So ladies and gentlemen, mark my words, within the next 5 years we’ll begin to track the impact and heartbeat of capital allocation on mother earth. Rockerfeller has also shown an interest in Heart assisting and developing the IRIS indicators for developing nations.
The bottleneck of High risk Seed Capital: Much talk was on this topic and blogged quite heavily. Many non-profit social ventures are easily started through leveraging friends, family and immediate networks to raise early seed capital. But internationally there is a great need for high risk seed capital invested into for-profit social ventures.
I am so glad to hear this being echoed internationally. Like bloody John the Baptist eating locusts in the desert, we (Heart) have been preaching to the planet that a ‘new capital structure needs to be created which is capable of driving social change’. We hope that the business case which we’ve developed for Standard Bank and key external partners can prove that this new capital structure is possible in a completely sustainable way. (the secret – funds and incubators – shhh – not too loud!).
In our experience, the best way to seed start social ventures is through a combination of ‘patient’ debt, and later a downstream capital re-balance towards equity participation. It also seems that a plausible way to incubate for-profit ventures at seed phase, is through a non-profit vehicle. Once operationally sustainable, flipping it into a commercial entity (where applicable of course) is a route to market (especially if the venture is capable of raising some grant money).
Lack of truly paradigm shifting SEs: There are many important social ventures, doing great work. But paradigm shattering social enterprises which work at scale are few and far between. I do kind of blame the above point, of the lack of a capital structure or angel investors which typify the web/tech VC space.
Lack of political will: From a South African context, there are multiple high level dialogues set to defining the space. Unfortunately from a social / political context, many of our government leaders defining the social entrepreneurship dialogue in SA come from an NGO, trade unionist / labout movement background. This largely has resulted in a negative opinion being formed around the potential of utilising capitalistic principles (specifically around privately owned enterprises) to drive social change. I will keep you informed on how this progresses …
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