Day one is over. I spent the day tweeting what I heard as did many others. There were some repeated themes that I heard.
Real Value
Putting revenue generation aside for the moment, Social investment is
characterized by a focus on creating value. This manifests in at least
two ways. 1) Deep vetting of social entrepreneurs. I referred to this
in my last post as retro-investing: investing in smart people with good
ideas, clear and coherent plans and predictable success. 2) Solving
problems. Our world is plagued by massive intractable problems.
Solving any part of any of these problems is valuable.
Measurement
In a for profit entity you measure success by the size of your
financial return. That's math. social enterprise (or socially
responsible business) you measure social impact. That's not math. It
is agreed that social impact is roughly what all stakeholders believe,
on aggregate, to be success but measuring that is either marketing or
impenetrable. Most organizations seem to be working to create proxies
for impact. More on this as the conference progresses.
Social Actors, Definitions
Social Responsible Business - a business, likely for profit, that is
concerned about providing value to all of it's stakeholders, not just
its stockholders. The is a lot of room between a corporation with
great benefits and a corporation that will "do no evil"
Social Enterprise (with unrelated commercial engine) - An organization whose reason for being is to address a social ill and the cash they earn pays to advance their social impact. (Working Assets)
Social Enterprise (whose business is to address a social ill) - An organization that can is designed to sustainably address a social ill by creating a revenue generating organization that directly addresses the problem. (Building sanitation stations in urban areas in the developing world. Selling eye glasses to the BOP.)
The role of philanthropy
How can philanthropy avoid being a market distorting subsidy (in the lingo of investors) and instead play a role in the investment paradigm? it is my believe, and one that I heard voiced by Martin Fisher of Kick Start the other day, that philanthropy needs to take the role of absorbing risk. However, this gets messy cause philanthropists instantly understand their role in that equation as making it possible for some other investor to get rich (reap an ROI) by leveraging their money. which is what they wanted in the first place, but when the philanthropy is actually structured in to the deal, it goes wonky. Philanthropists tend to like to stay at arms length, funding the initiative, not investing (with 0% to -100% return).
Enough for now...
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