Emerging Social Capital Markets

I will begin with the confession that throughout the Social Capital Markets conference I had to stretch my brain to stay connected to much of the conversation. As you would predict, much of the conversation was made up of very specific references to traditional financial mechanisms, capital markets and a whole lexicon of language that is just barely familiar to me. Lucky for me, I had Bob Wright *, DSVP founding partner and banker/lawyer extrordinaire who kindly helped by translating for me!


There was a sense that the scale of our global issues are massive, and the only way to really achieve the social impact we seek is to tap in to the private and public resources at the scale that can make a meaningful difference. The questions raised included: how do we use the existing tools, infrastructure and resources in dramatically different ways to address some of our most pressing social issues? And, how do we begin to construct new tools to achieve the impact we seek. Therefore, much of the conversation narrowed around the following areas.

1. Building and accessing social venture investment funds such as Calvert, Acumen, Schwab Charitable, Good Capital, Renewal2, IGNIA, and many more. There was a general sense that social investors need to get more familiar with each other and what segment of the investment continuum that each are focused. There is an opportunity and a need to develop ways to signal each other and hand off investments at different stages as in the venture capital world of seed, venture, equity, and private funding.


2. Measuring social impact in a way that involves standards of risk assessment and a true cost and wholistic approach to value. New tools announced included Impact Reporting Investment Standards (IRIS) and Global Impact Inves ting Rating System (GIIRS). What I found most interesting here is watching a very common conversation that has been happening for the last ten years in the social sector (about how to you measure social impact or social ROI), now happening among financial experts. Keep in mind, these folks are used to seeing quarterly reports on the status of their investments. Try giving quarterly reports on how one community solving povety. Community change has a different timeframe. However, what is most exciting is having this conversation among experts who are well versed in quantitative analysis. Together, we are sure to advance these ideas faster.

3. The perceptions of risk vs. real value in social investments. The recognition that often times investors and philanthropists are the same people with different expectations. I heard a term used, "Two-Pocket Investor" which refers to someone who thinks differently of their philanthropic investments vs. their financial investments. There was some confusion from the investor community why some of our philanthropic institutions deem social enterprises as too risky and yet preferred to give a grant. A solution offered up was a "stacked investment" which is a blend of financial investments and grants to help distribute the risk.


4. And, finally, their was amazing ideas and wisdom shared on starting a social enterprise. (see previous blog post on this topic)


*Bob, the world awaits your genius tweets.