SPECTRUM 2019

LET’S JOIN FORCES

The next innovation boom isn’t coming from New York or San Francisco — it’s radiating from cities like Atlanta, New Orleans, and Memphis, with a new wave of talented pioneers who are building game-changing socially conscious solutions across industries. The fastest-growing population of American entrepreneurs — people of color — are leading the charge, responding to the real needs of their communities and creating conscious companies that have a purpose beyond profit.

But while brilliant minds are plentiful, investment in and support for leaders of color is not. The racial equity gap persists, preventing great startups from scaling and thriving. Innovators and founders of color are systematically under-recognized and under-resourced. Now is the time for change.

At SOCAP and Conscious Company Media, we know the urgent need for access, inclusion, and impact. For over a decade, we’ve surfaced new solutions by gathering diverse perspectives to address the unique obstacles that we all face when markets fail. Together, we strive to better understand the challenges at hand and implement strategies to overcome those barriers. Let’s explore the full range of possibilities for creating equity and shared prosperity.

This June in Atlanta, GA, we’ll host SPECTRUM — a two-day immersive convening to bring together business leaders, entrepreneurs, thought leaders, cross-sector practitioners, and investors to identify ways to build an impact economy based on equity, diversity, and inclusion where everyone can thrive.

Join us in Atlanta, GA on June 12-13, 2019 to unlock the full range of possibilities.


Accelerator Selection Tool Debuts at SOCAP17

Conveners.org, Sphaera, and ImpactSpace today unveiled the Accelerator Selection Tool, an online database that maps the global impact accelerator landscape. The tool made its debut at the fourth annual Accelerating the Accelerators (AtA) workshop at SOCAP17. The first aggregator of its kind, the tool helps social entrepreneurs easily find accelerator programs that best fit the need of their venture, while providing valuable social enterprise and market trend data to impact accelerators and investors.

The Accelerator Selection Tool is the product of collaboration between Conveners.org, Sphaera, ImpactSpace, and other network partners. Developed using an aggregate of both private and publicly available information about impact accelerator, incubator, business plan competition, and fellowship programs—and distributed by a network of partners who provide the tool as a free resource to their community—the Accelerator Selection Tool provides the most comprehensive impact accelerator program information in the world and is an example of the power of collaboration.

“The Accelerator Selection Tool aggregates information from leading database partners and impact accelerator networks, each of which contributes a piece of the puzzle to create the most comprehensive impact accelerator program information in the world,” said Avary Kent, Executive Director of Conveners.org.

The tool includes data from about 750 social enterprise support programs from around the world, and has been embedded on a dozen partner websites—including GSEN, Mentor Capital Network, and Artha Network—reaching social entrepreneurs across the globe.

“The easier we can make it for social entrepreneurs to find up-to-date information about programs that advance their businesses, the faster they can get to work addressing the urgent problems of our time,” said Dr. Astrid Scholz, CEO of Sphaera. “The Accelerator Selection Tool is a key part of the digital plumbing we are building to make the business of social change more effective.”

To view the tool and for further information about adding your program to the database if you are an impact accelerator, incubator, fellowship program, or business plan competition, visit Conveners.org’s Accelerator Selection Tool webpage.  


Leading with Heart and Building Authentic Relationships to Create Real Change

With over 6,000 alumni, Rockwood Leadership Institute is the United State’s largest provider of multi-day, transformative leadership trainings for social change, nonprofit, and philanthropic communities. Rockwood President Akaya Windwood has been described as a “a one woman social change movement.” She has been credited with elevating the effectiveness of leadership and collaboration in the nonprofit and social change sectors globally. Conveners.org Member SOCAP recently sat down with Windwood for a conversation about leadership, mentorship, and the future of the global social impact movement. This post first appeared in the SOCAP Blog and is republished here with permission.

SOCAP: What are the skills that today’s social leaders need to develop to help us build a fair and equitable society? What can they learn from past social change movements?

Akaya Windwood: I think we need more heart and less brain, frankly. We humans are very clever, and that is both a gift and a challenge.

We are in a time and culture where our minds are over-emphasized and our hearts are de-emphasized, placing more importance on how intelligent we think somebody may be. What’s considered “smart” is based on a particular point of view or set of assumptions about what intelligence is. There are different kinds of intelligence. We need more of what I call “intelligence of the heart”.

We need more leaders who have a deep capacity for empathy and connection, who can recognize that the world doesn’t revolve around them or even the issues they care about, and who see their movements, organizations, and efforts as part of a whole ecosystem.

Nobody can do anything entirely by themselves. It takes all of us. It takes a community. The idea that all one has to do to succeed is work hard is a myth. It’s not true.

SOCAP:  What are the best ways social change leaders can form coalitions or build the relationships that will help them become stronger and more effective?

AW: Coalitions come together generally to do one thing, and then they all go back to whatever they were doing before. I’m much more interested in building authentic relationships that last over time, between organizations and sectors, and across movements. This requires understanding that we are all woven into the same tapestry, and we are part of a web of relationships that are not necessarily strategic. They can be, but when we build our relationships based solely on strategies and campaigns, they’re not going to work over time.

We’re in the business of social transformation, and social transformation happens over the long haul. It can appear as if change happens “in the moment,” but there’s usually years of planning behind it. When marriage equality happened in the United States, it wasn’t that people suddenly changed their minds; it had been years of dreaming and figuring out and building relationships that allowed the nation to move.

If the relationships I form and foster today are authentic, it may be 20 years before something “happens,” but it isn’t about building relationships to get what I want. I think a lot of traditional business consists of that sort of quid pro quo. But that’s not the basis for a sustainable, fair, and just economic system.

SOCAP: Entrepreneurs often come to SOCAP to seek out and build connections with mentors. What would you suggest to the entrepreneurs for how they can approach that search and prepare themselves to be a good partner in that relationship as a mentee.

AW: This is a tricky question. Relationship is inherently reciprocal, but so often we view mentorship as only going one way, which doesn’t get us to where we want to go.

If, as a mentor, I view it as an obligation that’s only about the other person receiving support from me, I miss out on the opportunity of learning and growth for myself. And if the mentee doesn’t believe they have anything to offer me, they lose sight of their strengths and talents. It becomes an extractive relationship, where one person gets something and the other gets depleted. That’s not sustainable.

I mentor a number of folks because I love and care about them, who they are as human beings, and what they want to bring into the world. They’re all younger than I am, and they are going to make this world amazing in ways that I can’t imagine. And yet, they are my partners in making transformation happen. When I view it that way, it becomes a delight to mentor them. They feed me in many ways. I’m happy to help people figure things out, and in that, I get fed. They give me as much as I can offer them in a different way. These are reciprocal relationships.

I always get a little bit uncomfortable when someone says, “I need a mentor. Who’s out there?” I want to ask, “Well, what are you bringing to that?”

This is where race, class, and gender can come into play. When you look at who generally assumes they will be mentored, assumes they deserve to be mentored, they don’t generally look like me. I have made it a point to mentor young women of color, who are often surprised that somebody would see them and say, “Let me help you.” Women, people of color, and people raised poor or working class often don’t believe they deserve mentorship, or don’t know to ask for it.

People who have benefited from this huge system of inequality – mostly wealthy or economically privileged white men – assume that mentorship is part of the deal. That’s not to say that those who fit within that group are bad people, but rather that there’s a system that determines some people are worthy of mentorship, and other people are not. I’m thinking about the other people.

SOCAP: What’s your hope for the future of the global social impact movement?

AW: Looking at this nascent field, I love that it has the capacity to cover a lot of territory. It’s an idea that is not bound by sector, and can have impact across many of them: nonprofit, for-profit, government, philanthropic. In some ways, it is knitting together sectors that have been delineated unnecessarily, and to our detriment.

So I think that, as we clarify what “social impact” means, it will start to include things we can’t even imagine yet.

A trend I’m beginning to see is a shift from accumulation to distribution, as in the movement of resources. People are realizing that having five billion dollars in their pocket is meaningless. You can’t carry around that money. No human being can spend five billion dollars in a lifetime. So it’s just sitting there, being meaningless.

This is what I’m looking to young people for. Folks that are in their 20’s, 30’s, and 40’s are more and more clear that it doesn’t serve the world for anybody to live in poverty. We also don’t need billions of bucks sitting around, stagnant and contributing to a world that is increasingly less viable. I’m deeply hopeful that these young people will be the architects of big systems, and builders of what’s coming next.

SOCAP: This year you will serve as a core faculty member for the first cohort of the RSF Integrative Capital Fellowship. Can you talk about the role that you’re going to play and what you’re hoping will grow out of it?

AW: My background isn’t in finance. My body of wisdom lies in leadership, particularly transformational leadership. What does it take to live and lead from a place of purpose? I believe that each of us is here for a purpose, and leadership is about manifesting that through our work.

That’s what I will be bringing to the Integrated Capital Fellowship. Both to help the fellows be inspired, bold, and courageous, and to help them connect with each other as we think about shifting from accumulation to movement and generosity. I’m especially interested in folks who have the capacity to move large sums of money, because that’s often where it’s stuck.

SOCAP: You participated in a recent SOCAP365 event about Capital Shifts for a Regenerative Economy. Was there something that came out of that conversation that you found particularly interesting?

AW: At one point, I talked about the fact that every time we spend a dime, we’re making an investment and a statement of what we value. That got retweeted, more than I could have anticipated. I wondered why it was so important. Then I realized, for so many, finance and investment are things only “those people” do, people like Warren Buffett. Many of us don’t know that we invest every time we choose where to spend our dollars. It’s not how we think about how we use resources.

I began to see that reshaping the notion of investing to include all of us making investment choices every day will shift how we see ourselves in relation to money. That can happen whether you broker millions in stocks, or use food stamps. I’m imagining a person taking their EBT card and deciding to use it at a specific store because it’s more in alignment with their values. That makes them an investor.

If we all see ourselves as owners of our financial systems — and not passive, powerless people who are acted upon – can you imagine what might be possible?

This post was written by Mandy Gardner and originally appeared in the SOCAP Blog; it is republished here with permission.


International Development Organizations Meet Impact

The big question is: Can they learn to syndicate with other capital, and only use subsidies at the right time.

International development organizations appear recently to have come to the conclusion that there is not enough money in the public sector or in philanthropy to meet the challenges of the world, as expressed by the newly redefined ‘sustainable development goals’. Their solution is to take seriously the opportunity to partner with impact investors and private wealth, who are also focusing on the SDG’s as the compass by which to guide the change they want their for-profit investments to achieve in the world.

But to make that partnership effective, IDO’s will need to start thinking differently. Acting in a traditional unilateral fashion will not work, without regard for initiatives already undertaken in high risk markets by impact investors.  There’s also a cure now for the ‘not invented here’ syndrome that propels unilateral thinking; it’s called ‘major budget cuts to international development finance’. Specifically, IDO’s need to carefully consider when to grant, when to subsidize an early market creation, and when to stop subsidizing an intervention because the market has emerged and a subsidy will undercut the market. Take the example of cook stoves in India.  The World Bank is currently undertaking an initiative focused on cook-stoves in India, with health as their number one stated priority that lends itself to the conclusion that LPG stoves are the best and only technical option.  Whether or not this health factoid is true (and there is ample evidence from the local market that competing local alternative products are strong contenders where it comes to achieving the same emissions goals), this institution is about to flood the market with finance for a stove product sourced in Europe that will essentially wipe out the last 6-8 years of pro-poor, risk financing that impact investors have attempted (at great cost, both direct and indirect) to deploy.  This will likely undercut attempts, both historic and current, at local innovation by local players, and yet again, distortive behavior in the frame of good intentions will provide ‘wins’ in the short term, but highly likely losses in the long term.

One of the smartest subsidies I have seen in the last decades is US AID subsidizing the management fees of three funds to remain at around $15 Million in assets, small enough to fund social enterprises in the “valley of death” (with the $300,000 to $750,000 post accelerator funding), and before they are ready for series A venture funding. In the traditional tech markets that is the space occupied by seed funds or super angels, and those entities either don’t exist or are slow to act in the impact space. The economics of managing venture funds makes funds have to reach $20 to $30 million to be viable to hire top talent with a two percent management fee. AID’s subsidy let Village Capital, the Unitus Seed Fund and the Shell Foundation’s fund bridge this structural gap to finance good companies that could eventually reach series A venture funding, or IFC funding at the $2 million range or so.

Subsidies work to seed a market, but also to distort a market at the next phase when subsidies make it hard to impossible for risk capital-backed ventures to compete with IDO-subsidized programs for specific products, like cook stoves. Later, subsidies to intermediaries make sense for bridging structural gaps in the market to enable more efficient capital flows and the absorption of transaction costs that a market may not yet bear.

Knowing when to subsidize, when not to, or when to subsidize an intermediary is a new kind of strategic analytic exercise for IDO’s who typically may not run a full ‘market maturity’ and concentration assessment before they act. They should do, in the same way that major infrastructure and construction projects do environmental assessments in evaluating unintended impacts before beginning to break ground.  As our colleague Arthur Wood has frequently stated in explaining his paradigm of the social change value chain, an exercise to undertake a major development project must be tempered by an analytic lens that reaches out into the far long term, the ‘beyond’ point at which unintended externalities may be imagined and even evaluated.  Without calculating the imagined value of / or opportunity cost of / or loss /gain of such externalities straight back into the core “cost benefit” budgetary analysis (or outright balance sheet) of a project, nobody can actually achieve a true picture of the impact of a desired intervention.

UN, development and international financial institutions are not known for celebrating their success as a function of measurable outcomes so much as they are known for celebrating their processes.  It is not a stretch to assume that a healthy slice of the $2.3+ trillion in aid that has flowed from the Global ‘North’ to the Global ‘South’ since the beginning of recorded ‘aid flows’ has been allocated to the overheads associated with ‘getting the money and people out there’. No one who knows the world of IDOs would actually dispute this.  Yet now, as tensions rise, global development budgets are hit, and re-organizations begin, our hope is that traditional unilateral ‘ego’ approaches (particularly when they support subsidies) give way to a flurry of higher quality, more collaborative interactions that showcase the best of what humanity has to offer across all sides of the table.

This post was written by Kevin Jones and Audrey Selian, and originally appeared on the SOCAP Blog. It is republished here with permission.


SOCAP Conversations: The State of the Field of Impact Measurement and Evaluation


What should robust evaluation and measurement of impact investing look like? Last year The Rockefeller Foundationpartnered with SOCAP to explore that question through a series of five SOCAP16 conference sessions focused on measurement and evaluation in impact investing and social enterprise. The series brought together diverse leaders from the impact community and outside experts on data, measurement, and evaluation, to share their expertise. It was clear from these discussions that there is a groundswell of interest in measurement and evaluation.

Following the conference, a report supported by The Rockefeller Foundation and co-authored by two designers of those sessions, Jane Reisman and Veronica Olazabal, was released. “Situating the Next Generation of Impact Measurement and Evaluation for Impact Investing” explores various ways the impact investment field, and market-based approaches in general, can establish evidence of social and environmental impacts. We recently spoke with Reisman, the founder of ORS Impact and measurement and evaluation advisor for The Rockefeller Foundation and Olazabal, the director of measurement, evaluation, and organizational performance at the Foundation.

SOCAP: Please describe your journey to understanding the impact measurement and evaluation state of the field.

Jane Reisman: I’ve been on this journey with Veronica and her colleague Nancy MacPherson, the managing director for evaluation, who have been spearheading this at The Rockefeller Foundation. They are attempting to strengthen the evidence base for impact investing and other market solutions because the Foundation has such a strong interest in how to best leverage all forms of capital, including the private sector, to achieve ambitious goals around poverty and resiliency. The evidence base for these approaches really hasn’t kept pace with the growth of impact investing.

Veronica Olazabal: Over the last few years, we have observed tensions between the state of the field and the growth in the evidence base around impact. Part of what happened last year—a large focus of the SOCAP series as well as other discussions anchored by the Rockefeller Philanthropy Advisors, Social Value International, and American Evaluation Association—was confirming demand from the investment community. From that standpoint, last year was a big year for testing this question: Is there demand for strengthening the evidence base? Resoundingly the answer was “yes.”

What are the main headlines in the report?

Veronica Olazabal: The report begins with a review of the current state of impact investing measurement and the social sector and provides a rationale for why this topic continues to be both relevant and critical to addressing global issues. One of the main messages of the paper is that not all social sector investors are the same and thus, they do not need the same level of evidence to make decisions nor do they need to contribute to the impact dialogue in the same way. We believe that, as with financial impact, the risk-return spectrum also holds for social sector impact. Others have also made this observation. So we lay out some propositions: that measurement practices need to evolve and that new practices have to borrow from the strengths of both business and social sectors. The social sector has been working on measuring impact for over 65 years. While working under different assumptions and likely at a different part of the risk-return spectrum than impact investing, “how” to go about measuring social and environmental outcomes and impacts is likely similar enough to provide cross-learning.

Additional questions we dive into are related to what is the state of the art right now? The report does not go through all the specific examples—there have been tons of inventories of who is doing what. What we tried to do is categorize the measurement practices that are shared publicly because so many of them are proprietary—essentially segmenting approaches by purpose and needs. What we found is that the majority of investors are concentrated on standards, such as the IRIS (Impact Reporting and Investment Standards) catalog of metrics produced by the Global Impact Investing Network (GIIN) and others, such as environmental, social, and governance (ESG) approaches. We believe this is a sign that impact investors are using standard metrics as a way of saying we are going to document our impact.

Interestingly, the GIIN has been publicly stating that IRIS was never intended as the be-all and end-all, but that it was an important starting point. Building on this work, the GIIN today is going deeper and looking closely at how to align investments with impact goals—for example, through expansion of their Navigating Impact Initiative with support from The Rockefeller Foundation.

Jane Reisman: Standards are a great start, but there are also other ways of measuring and more specific ideas about measurement that go deeper toward building an evidence base—for example, performance monitoring. A great example of performance monitoring is the Lean Data approach that the Acumen Fund has popularized. It goes beyond outputs to consider social performance outcomes. Social performance is becoming very popular. Many funds are starting to develop performance monitoring and management approaches that move beyond metrics, and into “how” to measure, that is, how to collect the necessary data. We believe this is a good sign, especially since social and environmental metrics are not as straightforward to capture as financial metrics.

These are positive signs, but they are more along the lines of management and monitoring for understanding whether a fund is reaching its intended goals. These approaches do not provide deeper analysis of the whys and external factors, which are important for investors to consider. Often a distinction between monitoring and evaluation is that evaluation asks additional layers of questions to understand how things work and what’s in the way of things working and what are the unintended consequences. Evaluation uses a variety of methods to produce Rigorous Outcome and Impact Evaluations Studies. That stands in contrast to the lean data approach, which is very important for social performance monitoring and a real step forward from using metrics alone.

We also discuss the importance of understanding a market system and system factors if you want to have impact. That has not been talked about much. Looking at the service, resource, or the product alone won’t help you understand whether you’re having impact, or what’s in the way of impact. You must also look at the system factors that surround the intended impact. I recently read a great example of that in a report about internet connectivity. Even though internet technology has reached 80 percent of the globe, only 40 percent of the people it reaches are using an internet connection because factors in the market them from using it. That is when you really need to start looking at systems approaches.

We are suggesting that there is another level of evaluation beyond the business model for most individual impact investment organizations and funds. As a collective, and in many other ways, that is something that needs to be understood. This systems approach has been used quite a bit in multilateral work and as the private sector and impact investors continue to get into impact work, grounding their thinking in a systems mindset and measuring system factors will be important for producing the impact.

What reaction do you hope to see in response to this report?

Jane Reisman: This paper hopes to catalyze a convergence of methods—not looking at any one method as the be-all and end-all, but assessing the situation and determining which method will be most effective in a particular situation. We are suggesting different situations will call for different methodologies and not just a single standard. It is important to look deeper and consider the measurement approach that is being used and the goals you are trying to reach. That will help you determine what method makes the most sense.

It is really a good time for the impact investing industry and the social sector to begin working more collaboratively. They’ve been working in parallel streams and haven’t really connected very much. But over the past year, cross-fertilization has started to happen. The evaluation community is a good partner for the impact investment community in this endeavor. Instead of reinventing the wheel in the social capital markets there are lots of good ideas, tools, and methods that can be built upon and adapted to the new field. Everyone must innovate and create something new in this space.

Looking forward, are there any resources that you would point the SOCAP community to look to?

Jane Reisman: Tremendous work is happening across the globe, across disciplinary teams, and across industry teams—large investors, institutional investors, high net worth individuals, asset managers, asset owners, and evaluators and impact analysts. There are far more conversations happening in allied fields, including the microfinance community. There are five major initiatives that the SOCAP community should be aware of:

  • The Navigating Impact work being led by the GIIN;
  • The Impact Management Project facilitated by Bridges Ventures;
  • The Global Steering Committee that is a follow up from the G8 Task Force;
  • A new World Economic Forum initiative related to impact investing that was discussed in a session at the World Economic Forum in January and is the subject of an action agenda; and
  • The Social Performance Task Force, which is focusing on inclusive economies and financial service providers with social goals and that brings to the table a robust history of learning around impact measurement and evaluation.

Veronica Olazabal: Most importantly, I would say, keep your eyes open for a new generation of measurement and management. Management is as important as measurement. The GIIN created the business case for why measurement helps to manage investments for impact better. Clearly there is lots of demand and lots of commitment to strengthening the process for generating evidence and this is a real game changer.

This post was written by Mandy Gardner and originally appeared in the SOCAP Blog; it is republished here with permission.


Why the Good Capital Project: Interview with John Kohler

The Good Capital Project will convene for the first time this June in New York City. This new SOCAP initiative will bring together a cross-sector collection of experts, practitioners, industry leaders and other stakeholders to drive greater collaboration and accelerate capital flows into purpose driven investments. In the months leading up that event SOCAP will be interviewing key pioneers and leaders in the impact space who have partnered with SOCAP to help make the Good Capital Project a success. This post first appeared on the SOCAP Blog and is republished here with permission.

John Kohler serves as Executive Fellow and Sr. Director of Impact Capital at Miller Center for Social Entrepreneurship. He is co-founder and Director of Toniic. He is an active impact investor and leads impact manager training for ANDE.  Kohler brings his experience with technology companies, start-ups, and 15 years in venture capital to his role at the Miller Center.  He recently published a report through Miller Center entitled: “Total Portfolio Activation for Impact: A Strategy to Move Beyond ESG” and has several previous publications on impact investing.

What led you to become involved in The Good Capital Project?

I received an invitation from Kevin Jones whom I’ve worked with to generate content and thought leadership for SOCAP. The Good Capital Project will be an expansion of the scope and perhaps leadership that SOCAP provides to the sector. The connection of money and meaning has been the byword for everything that SOCAP has done. It has been localized to a major event on the west coast. They’ve had some SOCAP sessions in Europe in year’s past and some convenings on the East Coast through the Impact Hub. I think that the idea of Good Capital is really an evolutionary jump, saying look, let’s bring the key stakeholders not only from capital deployment, but also from measurement and from capacity development, and include a strong international voice. From a practice standpoint, let’s talk through how we move beyond the wonderful, but siloed efforts into more coordinated efforts in the impact sector.

Why is collaboration in this industry so important?

The practice I’ve seen within venture capital, involves a more uniform approach in terms of the capital deployment to support start-ups, the objective to create significant value and become rewarded for undertaking the associated risks. There is also more homogeneity with the investment tools employed, which is primarily equity, and the single minded nature of portfolio assembly. In other words big markets, disruptive technology, and global expansion.

In contrast, the impact investing sector is comprised of a much more heterogenous group of stakeholders, some coming from government development programs, such as DFID and USAID, and some program related support coming from foundations and corporations which address stubborn problems of poverty such as eradication of diseases, or providing maternal care, education, food security, and so on. Some of the participants want to help small businesses grow in certain communities as a different approach to solving poverty. And some  are motivated by the fact that the next two billion people on our planet will be added in base of pyramid markets-and they see that as a huge opportunity. So there are many different stakeholders here. The wide variety of actors, intentions, desired outcomes, and forms of capital, amplifies the need for collaboration.

In terms of capital tools that can be used, we have many different forms that reflect the nature of each impact sector participant.  These include grant capital or concessionary loans, program related investments (PRI), and traditional investment capital. The actors and the form of investment they employ need to learn how to ‘play’ together nicely. Because we are usually working in less than fully developed economies, we often have less than fully developed efficiencies of scale. There are any number of issues affecting start-up success, such as bad monetary policy or regulatory mishandling or sudden changes in import/export bonds or currency devaluation…etc. which can make it more difficult rather than easier for small businesses to develop. Consequently, social enterprises need a longer gestation period than might be expected in New York or London. They need more hand holding, or what we would term business support, and all of these stakeholders are playing a role in ultimately determining what could be successful. This is another reason why I think that collaboration is needed.

What are the three biggest challenges facing the space?

We need to identify the appropriate capital to support an investment-ready enterprise. We need to recruit both or help develop both. That is the first challenge. That marriage is still rough. We often have a lot of mishandling with expectations held by both the entrepreneur and investor.   This results in skittish investors and a longer fund-raising cycle for entrepreneurs.  I often ask our entrepreneurs this question:  “Is the promise you are making to your prospective investor one that your business model will allow you to keep?”  The answer is often “no”.

The second big issue is to get reliable return of capital. If the thesis with impact investing is to used business and market building mechanisms to create prosperity from within underserved communities and solve some of these problems like access to water, electricity, or food security, then we have to demonstrate a ‘round-trip’ of that invested capital.  At this juncture, reliability of return is more important than absolute return.  Developing more investment-ready start-up businesses and utilizing more appropriate investment tools like risk debt or variable payment obligation (VPO) structured exits will help increase the success ratio of impact investing.

A third challenge is that we need a simple set of consistent metrics for the impact being earned. I think a related challenge is to not allow impact to become green-washed. The way we get meaning with a “capital M” is to measure it with a “capital M” in a way that is very easy to do verifiable, and with a distinct outcome that stands above lighter definitions of “impact” that we sometimes encounter.

What are the three biggest opportunities?

First, we need to invite in, or shepherd in, new actors who are already showing signs of interest, including people from the INGO community and people from mission based organizations (from Pope Francis on down) who want to move beyond ESG and take a direct role in helping create beneficial outcomes through impact investments. Additionally, more traditional financial advisors who are coaching high net worth clients or asset owners who are running a family foundation and want to understand how they might organize a portfolio of 100% impactful investments need to be invited in. So that is an opportunity to bring in people who might have used a different tool in the past (philanthropy), but in their hearts and in their actions, they have the same objective and now they want to embrace impact investing.

The second opportunity is to concentrate on some of the game changing or leap-frog technology developments. These are technology innovations that allow poorer communities to avoid large infrastructure investments that have been holding up progress such as implementing electrification, water distribution, last mile health services…etc. How do we use some of these technologies to put in micro grids for electrification or micro-insurance for income protection against crop and climate disasters?  We’ve seen that already happen with mobile money services where we’ve been able to skip having banks build brick and mortar branch offices and instead jump right to the ability to have depository services to cell phone accounts and later to be able to have credit access in those same accounts and institute a form of banking that heretofore hasn’t existed. So, there is an opportunity there to keep on that innovation path because very many revolutionary developments are being thought of that can help poor communities jump into being included in the global economy.

The third opportunity is making sure that, in our own efforts, we don’t forget there are a lot of young people who are starting from a values orientation versus from a “how do I make a lot of money and build my career” orientation. Today’s students are really well prepared. They are amazing young people and they begin their careers with a values orientation. They want to vote their values first before they vote their income. Income is secondary to the type of job they choose. If we cater to, or at least include, this current generation then I think we will see a lot of motivated young adults who have bright ideas that will help the other two opportunities come to fruition.

What would you most like to see come out of The Good Capital Project ?

Well, it is very ambitious endeavor which is great because incrementalism isn’t going to move the needle here. So what I would like to initially see out of the Good Capital Project is a discussion where we rethink a coordinated approach to existing problems in a way that gets the actors working together.

There could be emphasis on best practices and there could be an identification of six or seven key initiatives which Good Capital would start working on. My hope would be that rapid progress is then achieved through formation of sub groups of interested and motivated parties.

Have the foundation of Good Capital be organizations that can fund or lend effort or talent to take the best of what we are doing today, rethink it and try to create much more efficacy. Whether it is achieving greater, more reliable capital or inventing new instruments or deciding on and really promoting a simple but effective and accurate measurement tools, the goal should be an evolutionary blueprint that we can all buy-in to. Whether we are looking at new instruments to allow for better capital or layered capital to allow different investment capital that have different objectives some might be development directives some might be return objectives to participate at the same time. Whether we have simple but effective measurement space on Sustainable Development Goals (SDGs) or derivative works on the SDGs and ways of gathering that in the lean data way, such as Acumen is talking about. Whether we tackle how do we have a shift of the deal generation and support for impact investments come from the global south as opposed to driven by the global north. Any number of conversations that we have could flip the game in our favor so that is what I am hoping for.

As a key leader in this space, is there anything you are working on that you are particularly proud or excited about?

At Miller Center, for the past many years, we’ve taken an integrated approach–we’ve had a social entrepreneur facing aspect to our work and an investor facing body of work. We also enrich the educational experience of the students that are at our university through our programming, but the work is all very practiced based. So what we’ve learned with our entrepreneurs we feed to the investors and what we’ve learned from investors we feedback to our entrepreneurs. We’ve been very active in this way and I think it positively informs our perspective in terms of the true needs and nature of entrepreneurship around the world.  We have paid particular attention to achieving investment readiness for the enterprises that come through our programming.

The second development is that we’ve pioneered different forms of investment other than equity. We love equity in Silicon Valley. We love using equity as a tool. But it is not always the best tool with social enterprises. One of the topics we’ve been presenting at SOCAP over the past couple of years has been how to rethink capital formation for social entrepreneurship, where risk capital can be more widely available while increasing the likelihood of successful investment return.  We also like to promote impact capital as ‘continuous flow’, from philanthropy to investment return.  Too often we see investor mind set rooted in one or the other pocket and not imagining that there is investment opportunity that lies in-between.  This can restrict the amount of impact capital that participates with our entrepreneurs.  Developing confidence building ways of investing such as new tools or impact across asset classes will help the interested but hesitant capital that sits on the sidelines today.

Finally, I think there is always a rapid and innovative set of ideas that come up every year.  We are happy to have Miller Center participating in the Good Capital effort.

This post originally appeared in the SOCAP Blog and is republished here with permission. Learn more about The Good Capital Project here.


The Conveners.org Sessions @ SOCAP16: Impact Convening Information, Tools, Practices, and Outcomes

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SOCAP’s annual gathering of mission-focused investors, entrepreneurs, and social impact leaders is always a highlight for Conveners.org. As an organization with a mission to support the diverse ecosystem of impact-focused conveners and accelerators, we recognize the transformative power that convening has to positively change the world, and SOCAP is a great example of meaningful convening.

During this past conference we co-hosted three sessions over three days, bringing together diverse segments of the social impact community.

The week kicked off with an all-day pre-conference session in support of one of our signature programs, Accelerating the Accelerators (AtA). With our co-hosts, the Miller Center for Social Entrepreneurship and SOCAP, we brought together 35 accelerator program managers from 28 unique accelerators, representing 12 countries around the world to explore how to move collaboration into action. During the week we also met with leaders in the impact mapping community to share initial ideas on developing a new Mapping the Mappersinitiative, an effort currently underway. We then wrapped up the week by celebrating our third birthday with our Convening the Conveners (CtC) community, a membership community of conveners who are dedicated to advancing ecosystem-wide impact through collaboration. Below are outcomes from the three sessions and information on how you can get involved.

Accelerating the Accelerators

In partnership with the Miller Center for Social Entrepreneurship, we co-hosted the third annual Accelerating the Accelerators @SOCAP day-long workshop. A continuation of conversations from years past and similar workshops hosted by community leaders, including Ian Fisk of the Mentor Capital Network, the session served to further build the field for stronger accelerator network ties and more frequent and meaningful peer-to-peer exchanges.

The morning segment focused on gaining a better understanding of how one another’s programs work, what each program does well, and where each program could benefit from support. The afternoon segment was organized as an unconference, with participants sourcing conversation topics that were of the most interest to them, and then creating an agenda to break into small group discussions. These conversations included:

  • Sustainable business models/revenue generators for scaling accelerators
  • Supporting non-selected entrepreneurs
  • Getting entrepreneurs investment
  • Best practices in getting comparison groups
  • How do you measure the impact of your accelerator and the businesses you accelerate?
  • Curriculum best practices

The workshop concluded with the group identifying opportunities to continue exploring topics throughout the coming year through three new AtA Collective Impact Projects run by Conveners.org. Collective Impact Projects (CIPs) are working groups that focus on a specific topic, for a defined period of time, with the objective of creating a new industry resource, solution, or tool. The new CIPs sourced from our sessions at SOCAP include one focused on impact measurement, which has a Slack group going and is open beyond those who signed up at SOCAP; another CIP centers on the support that can be given to entrepreneurs who are not accepted to an accelerator program, and will launch in January; the third CIP is focused on providing feedback for a new initiative called the Accelerator Selection Tool which will get started in Q2 of the new year.

To read more about these unconference sessions, including key takeaways from each conversation, click here. And if you’re interested in joining a Collective Impact Project, send an email to info@conveners.org.

Convening the Conveners

Convening the Conveners (CtC) is a membership program for organizations that use the powerful tool of convening to advance positive change. The program was born at SOCAP13 when Topher Wilkins, CEO of Opportunity Collaboration, organized a gathering to discuss a radical idea: that greater coordination, cooperation, and collaboration among conveners would lead to greater collective impact.

In January 2015, we formally incorporated as Conveners.org and we haven’t looked back since — co-hosting sessions around the globe, building out our membership website, supporting collective impact projects, and establishing a strong team to serve our members.

At SOCAP this year, we celebrated our three-year anniversary, and continued the conversation of how best to convene for impact.

Mapping the Mappers

In the spirit of convening, Conveners.org took a popular quarterly call series called Mapping the Mappers (MtM) and hosted an in-person gathering at SOCAP16 to discuss the formalization of a program on how to generate efficiencies in social ecosystem mapping efforts.

The purpose of the gathering was to coordinate efforts, avoid the trap of re-inventing the wheel, and learn what technologies and approaches have worked well for mapping peers. One outcome of the meeting was the creation and launch of a Mapper Directory, as well as the launch of an MtM Google group, and the setup of a follow-up call in December to continue the conversation and collaboration.

If you’re interested in learning more about this and other Conveners.org initiatives, send us an email at info@conveners.org. And make sure to connect with us next year at SOCAP17!

This post originally appeared in the SOCAP Blog, and is republished here with permission.