The lure of technology lies in its dynamism. The development of sleeker hardware and faster software lingers just around the corner, fueling the competitive desire to get to it first. Within the organizations birthed by this drive, the lights are dim, the drive is high, and snacks abound to keep you energized.
It’s this type of drive, curiosity and competition that brings some technology entrepreneurs, as investors, to the world of social enterprise.
I had the privilege of helping to open the Calgary Microcredit Conference this past weekend on a panel with Mark Durieux, University of Calgary, and Rupert Scofield, FINCA where we provided our thoughts to answer the day’s question and conference theme: Microcredit and Beyond - The Emerging Wave of Social Business & Social Entrepreneurship.
On a Saturday morning, two hundred Calgarians turned out to think through the opportunities that microcredit, and more broadly, microfinance, has provided over the past thirty years, and to deal with the challenges that have arisen in the industry.
I winced slightly during the opening session of SOCAP and wondered if I’d wandered into another variation of dealing with white man’s guilt. Phrases like “changed forever”, “southeast Asia”, “compelled to do something”, and “Peace Corps” sounded like the clichés of philanthropy and of international development. I thought, perhaps, that we were here to do something new, with a new perspective, and that we’d traveled beyond some of these sentiments.
Like my colleagues who have written their reflections on SOCAP, I gleaned a massive amount of information on the spaces within social entrepreneurship and impact investing. I do this work because I love the newness and the possibility. I love the build. While much of their reflection has landed on the financial and investing side, there is room for the perspective from a cultural studies side, from critical theory to reflect on the dynamics of what we are building.
Last week, I wrote to IDEO and recommended that, along with food production and maternal health, they should add ‘social finance’ as a design challenge on their OpenIDEO site. I was pleasantly surprised to receive an email, from a real person, acknowledging my request and noting that it’ll be added to the list. With all of the time I spend thinking about social finance, I am constantly reminded that it’s not the finance that is the challenge - it’s our design.
Too often I’ll get stuck in looking at the world of “social” (business, enterprise, & finance) from one vantage point – incorporation status. I’ll start discussions based on the pros and cons of being for-profit, non-profit, or charitable. As the conversation progresses, I’ll finish with a rousing validation of why blended value is important in the world today. It’s that nugget doesn’t really sink in, because I’ve lost my audience long before I got to it. Maybe it was just a rut, but at some point I stepped back and wondered, what am I talking about? It’s important to keep the big question in sight – what is our intention in doing this work?
A few weeks ago, I sat in a conversation about social finance amongst the community economic development (CED) crowd in Calgary. Together, we had a great conversation surrounding Canadian demand for slow money, patient capital, and discounted community mortgages.
The one common theme emerging from our different takes was demand. There is demand for investing in social good. There were a number of us who had explored and invested in ethical funds, hoping they would satisfy our demand. We felt a bit let down when we saw that the companies in ethical funds were the same ones in regular funds. Others among us had experience investing in Kiva, but wanted an option to loan their money to local organizations. There were still others who had put together their own community mortgages.
When I started writing for SocialFinance.ca, I had the intention to write about events unfolding in social enterprise within Western Canada. I’ve broadened my perspective since then, but I’m always looking for great news from the West that I can share. Today, I’m particularly excited to share the news that a new foundation in Calgary has committed itself to furthering the social entrepreneurship movement.
The Trico Charitable Foundation has announced three major initiatives to encourage and promote social entrepreneurship in Calgary, Alberta and across Canada. Keeping in mind the challenges and complexity of social enterprise development, the Foundation has partnered with a number of organizations to help spearhead interest and investment in social enterprise.
I’m going to toss an idea out to the crowd that I’ve been mulling over for the past six months. I’m wondering how far-fetched this idea is and whether anyone is already testing the assumptions.
In all the literature I’m reading on social finance, we have lawyers talking about what public policy can do, we have entrepreneurs talking about what businesses can do, and we have the philanthropic sector talking about what foundations (and networks of organizations) can do.
The underlying assumption in all of these discussions is that what must be created, due to regulation, norms, or otherwise, must be done through organizations.
Craig Dearden-Phillips wrote the best line I’ve read in a while, “It would, in fact, be more rational to just go and work for a social enterprise than start one.” Simple and true. And problematic.
In his September 18th post, Craig describes his decision to go private business vs. CIC in opening his latest venture in the UK. His decision to go private business is worthy of discussion as we continue to figure out how to make social enterprise and social finance work in Canada. (There’s irony in his choice.)
This post began as an innocent nod to the Calgary Microcredit Conference that is taking place on September 11. In Alberta, just as in many places, we are seeing folks come forward into the nonprofit sector and social space who want to do more than donate their money.
A year ago, I started quietly along a path to understand the legal and regulatory structures and challenges of social enterprise. It was a quest for knowledge and was parlayed into a course on public policy for nonprofits. For six months, I diligently read everything published on the topic with the hopes that my knowledge in the topic would expand and I’d be able to influence the topic. Starting out slowly and independently, I never imagined how quickly the ball would start to roll.
Social finance, rather than detracting an organization from their mission, provides the ability for an organization to achieve their mission using a more robust diversity of tools, namely, generate revenue. Too often we assume a broad philosophical gap between for-profit and non-profit organizations. Non-profits are laden with cumbersome attempts at fundraising through donations and grants, which can be said to detract from time spent on their mission, where as generating revenue from any type of activity could provide a steady source of funds.
For-profit organizations and their ability to provide income to investors have been offered numerous financial options and products. Rather than detracting from a for-profit organizations business or product, these options allow for and encourage growth and success. The added advantage that for-profit organizations have is that they can rely on market indicators to let them know if they are failing. The non-profit sector is working on ways to create these feedback mechanisms and social finance can be one way of assisting.
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Your Guide to Social Finance
SocialFinance.ca hosts an online guide that helps social entrepreneurs learn how to attract financing for their social ventures.
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