SOCAP 2009: Trends, mandates and action steps required for the creation of a robust social capital marketplace
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A report on the SoCap 2009 conference to the MaRS Discovery District community. By Tim Draimin, Adam Jagelewski and Jennifer White
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SOCAP 2009: Trends, mandates and action steps required for the creation of a robust social capital marketplace
- 1. SOCAP 2009: Trends, Mandates and Action Steps required for the creation of a robust social capital marketplace Presented by: Tim Draimin Adam Jagelewski Jennifer R. White 1
- 2. the momentum builds.... 2 SOCAP 2009 White House Office of Social Innovation and Civic Participation Inclusive participation of capital markets Scale of Social Enterprises Measurement as a means to evaluate social and financial impact SOCAP and Canada The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
- 3. “We need an Obama!” US innovation in a Canadian Context 3
- 4. the momentum builds.... 4 SOCAP 2009 White House Office of Social Innovation and Civic Participation Inclusive participation of capital markets Social Enterprises and creation of value Measurement as a means to evaluate social and financial impact SOCAP and Canada The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
- 5. We missed an opportunity.. It’s amazing that the average portfolio is down close to 30% while some microfinance opportunities are average a return of 7%-15% yet investors are going back to the same advisors – WHY? - Jed Emerson, Uhuru Capital Management 5 Attracting institutional investment…The supply side
- 6. Attracting institutional investment…The supply side 6 SOCIAL ENTERPRISE SPACE The social capital market has continued to evolve in financial structure and product set, encouraging increased investment but more work is needed.
- 7. Mark Cheng on Leveraging Philanthropic Dollars 7 Play Video >
- 8. the momentum builds.... 8 SOCAP 2009 White House Office of Social Innovation and Civic Participation Inclusive participation of capital markets Social Enterprises and creation of value Measurement as a means to evaluate social and financial impact SOCAP and Canada The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
- 9. How Can We Build the demand for social capital investment ? 9 We would be better off as an industry if we rid ourselves of the non profits that do not demonstrate impact; and better off if we rid ourselves of investors that don’t invest in the best possible way for impact - Kevin Starr, Mulago Foundation
- 10. How can Social Enterprise encourage capital investment? The Demand Side An investment review.. Would you invest in a business or social enterprise that did not demonstrate results and impact clearly? Accountable, Measurable Social Enterprises & Failure Current State of Social Sector What is needed Business Acumen Rigor & Analysis 10
- 11. David Green: A Social Perspective on Business Acumen 11 Play Video >
- 12. the momentum builds.... 12 SOCAP 2009 White House Office of Social Innovation and Civic Participation Inclusive participation of capital markets Social Enterprises and creation of value Measurement as a means to evaluate social and financial impact SOCAP and Canada The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
- 13. What is Impact and how do we measure our results? 13 Metrics are the carbon of the social impact ecosystem and the policy environment is the oxygen - Lucy Bernholz, Blueprint R&D
- 14. Impact Evaluation Is… Confusing Fragmented Misaligned Uncomfortable Simple and understandable Outcome focused Aligned 14
- 15. SoCap’s response: Advancement in this complex space… 15 Global Impact Investment Network (GIIN) Tools and Resources for Assessing Social Impact (TRACI) Impact Reporting and Investment Standards (IRIS) B Corp Pulse Outcome Dashboard SROI
- 16. Traditional Approach, New Language Investors seek out new opportunities for investments, new ways to cultivate opportunities 16
- 17. Traditional Approach, New Language Investment decisions are predicated on the availability of research and information 17
- 18. Traditional Approach, New Language And, rating systems 18
- 19. Traditional Approach, New Language Investors rely heavily on the accuracy and completeness of the available information 19
- 20. Traditional Approach, New Language Based on, Standards 20
- 21. Traditional Approach, New Language Investors assume the standards and trust the ratings because the fundamental tools and management systems are in place to collect and report data 21
- 22. Canadian Day Conference Kick-off hosted by Play Video > 22
- 23. Canadian Delegation: Current State Challenges 23 Play Video >
- 24. Canadian Delegation: Opportunities in Social Finance 24 Play Video >
- 25. What does this Mean for Canada?Brainstorming Opportunities
- 26. What does this Mean for Canada? Key Takeaways and Next Steps Collaboration Participation is increasing in the emerging social finance movement in Canada Policy change is critical Social Task Force Change – not-for-profit Social finance is response to important dynamics of change Change – for-profit
- 27. Canadian SoCap 2009 Delegation 27
Notas del editor
- Intro slide with focus of SOCAP 2008 in the recession until now – movement towards more capital injection, people, Walk through agenda with the final point being that we as Canadians got together seeking to place structure and framework around the Canadian mandate.
- The US White House Office of Social Innovation and Civic Participation Opening remarks ( explain using two points); focus on 3 person team and the continued focus on partnership not a top down approach. GovernmentGovernment as an enabler - Measurement & DataProven outcomes with common principlesIncentives Canada – government has made an effort with leadership but yet will have intermediaries to distribute funds = PARTNERSHIP Ie- we don’t want this to look like the health care system. OVERALL – government can be aligned but up to individual actors to create policy change and create a dynamic marketplace.
- Now that we have explained the top town approach we are moving towards government involvement. Let us move towards the next layer – the institutional capital markets and their increased participation.
- Jed’s quote ( quick plug for December 3rd), as the government involves itself to become a convener and partner. How are the markets reacting? What change has taken place since the bottom of the recession? Canada? Humanizing capitalTailoring finance structures, relationships and partnerships that produce better deals for low-income/disadvantaged people (David Green – Ashoka)Philanthropy vs. Investment capital Discrepancy between philanthropy and investment capital is disappearing - desire for sustainable funding - longer term view and investment partnering - leverage other capital pools
- Discrepancy between philanthropy and investment capital is disappearing Classic Market Assumptions are less obvious Co Creation - Philanthropy as an investment class; can be used as first loss capital Creation of financial products that encourage mainstream participants Mark Cheng & his remarks at the SOCAP Canadian Day ( More focus on infrastructure More transparency Emphasis on value creation and valuation techniques Market Assumptions - Models are clear, subsidies for small businesses, value is easy to identify, Modern Portfolio theory has all of the answers for Risk and Return
- Now that we have explained the top town approach we are moving towards government involvement. Let us move towards the next layer – the institutional capital markets and their increased participation.
- Too many non-profits can not demonstrate their value; capital is not used effectivelyUnderperforming non profits, little collaboration, no effective measurement and severe funding limitations Reliance on Government Funds for mission fulfilment Need to create reliable business models that can scale FAILUREGood to Great – Social Sector: encourage business acumen, speak social languageDavid Green Video Clip Scale and move forward – failure/ 80% businesses fail yet not part of our language or system
- Noted consultant for many of the top foundations in the US and analyst of the philanthropic industry. She is founder of a strategy consulting firm specializing in research and design for foundations. Nearly every panel in some way brought up the need to increase transparency and credibility in how organizations define, track, and report on the social and environmental performance of their investments - whether they be in nonprofits or for-profits
- Metrics are not used to evaluate organizations and make knee-jerk reactions to the results. They are used to determine whether an organization will be able to have a sustained valuable impact and scaled social change capabilities.
- Introduce measurement and standards world but not important to get bogged down in the details and acronymns. Important is the vision and similarities to traditional investment world. Important to understand how metrics and evaluation related to the flow of capital into social capital markets and the necessity for enterprise to demonstrate valueInvestors are looking for social impact but are not prepared to deal with detailed metrics and social analysisSara Olsen – there is no easy answers. Metrics/measurement is an uncomfortable discussionThe process: innovation risk rewardThere needs to be a clear value proposition for impact measurement – until then, it will feel very chaotic (Sara Olsen SVT)As impact investment increases in take-up, so does impact measurement scrutiny and fragmentation between players in the sector
- Transition to Canada Day – Summarize: work in progress, accept challenges, accept timeframes. As impact investment increases in take-up, so does impact measurement scrutiny and fragmentation between players in the sector
- Collaboration – socialfinance.ca and national working groups Social task force – group of business leaders to champion a team working to provide tactical recommendations to advance social environment and financial returns on investment Change – nfp – introduce and embrace more diversified, sustainable and resilient business models Change – fp – principle mentality shift to seek out investments that will produce social and/or environmental returns as well as financial Identify Causeway involvement for all takeaways