NB Financial Health
On the Ground at SOCAP – Day 1: Managing Impact for the Long Term
In 2013, the landscape of impact investing isn’t just changing – it’s shifting beneath our feet.
At SOCAP 2013, alongside the themes of ocean sustainability, health and big data, reaching the “tipping point” of impact investment has emerged as the central pillar of creating systemic and truly transformative change. SOCAP has assembled a group of prominent panelists to kick off the process of mapping the future of impact investment, with the goal of building a sustainable planet with solid livelihoods for everyone. Here’s what happened in the opening plenary session: “Managing Impact for the Long Term.”
- Penelope Douglas, Mission Hub (moderator)
- Morgan Simon, Impact Investor, Transformative Finance Network
- Jean Case, CEO of Case Foundation
- Daryn Dodson, Board-member Ben and Jerry’s and Calvert Funds
- Xavier Helgesen, Chairman and Co-Founder of Off.Grid:Electric
“Fail fast and fail forward”
To illustrate how far the sector has come, panelists discussed the question “Where were we 10 years ago?” Katrina had just hit, the knowledge democratizing giant called AOL had merged with Time Warner, and serial entrepreneur Xavier Helgesen was launching his first venture of “cash for school books.” And in the social sector, the pieces were already moving. To push this shift forward, the panelists discussed the major gaps in impact investing that still need to be addressed.
Jean Case has been celebrating the 15th birthday of the Case Foundation with the launch of the “Be Fearless Initiative.” The initiative looks at the principles that are needed to make transformative change happen. Her advice for the social sector is simple: think of big ideas, don’t be afraid to change, and don’t get too comfortable. And if you must fail, “fail fast and fail forward.” The sector demands resilience.
Needed: More Diversity
It also demands the engagement of diverse groups, especially the youth. Daryn Dodson of Ben and Jerry’s and Calvert Funds stood up suddenly during the plenary and asked anyone under the age of 20 to raise his/her hand. No one in my vicinity moved. Maybe one volunteer’s hand shot up in the back. There is a clear need for sharing of knowledge between generations. Jean Case confirmed this: it’s 10 years later and we still need to educate each other about what models exist.
The message is simple: collaboration is key and knowledge sharing is inevitable
Beyond age diversity, panelists called for regional diversity. According to Daryn Dodson, “Investors focus on the East and West of the U.S. and they completely forget about the impact.” Investors need to take greater risks on smaller markets and talented entrepreneurs in cities like New Orleans.
Be Patient With Profit and Growth
Today, investors are lucky to have diversity in products and a larger range of disruptive technologies to invest in – ones that have global potential. Entrepreneurs like Xavier Helgesen, Chairman and Co-Founder of Off.Grid:Electric, are asking questions like “How do you make solar affordable in the developing world?” Solutions might involve technologies and technical shifts that come with a built-in triple bottom line and that utilize the disruptive power of the internet.
According to Jean Case, “[Xavier] is not just working with a small energy company in Tanzania. He’s lighting up Africa.” Remember, think big ideas.
Xavier Helgesen’s advice to both entrepreneurs and impact investors is simple: be patient with profits and growth in startups. Moreover, learn by doing – on both the investment and startup side – because big risks yield big returns even in the social sector. The key is to redefine risk and to well-define impact.
Building a Movement
Morgan Simon, the former CEO of Toniic and a seasoned impact investor, eloquently offered up a never-failed-tried-and-true definition of impact: “According to Merriam Webster, impact means to impinge or make contact especially forcefully.” Now we’re getting somewhere. Social impact is bigger and more forceful than any individual or organization. Transformative change means building a movement so big that it is not dependent on any one person, institution or enterprise. To make this a reality, the sector requires new metrics and priorities that don’t just measure housing and employment, but the quality of housing and employment and their correlation with other measurements.
Today, we are faced with an opportunity, knowing that trillions will move into the social sector in the text decade. According to Simon, we will need to be patient to make sure that we’re making the right kind of change, while maintaining the youthful, entrepreneurial energy that is needed to push us forward.
Jean Case alluded to Martin Luther King’s “fierce urgency of now” and the mountain-top metaphor from his “I have a dream” speech. “There is a pioneering feel to impact investing that makes us think like it’s been around for a while. But it hasn’t! We haven’t even reached the top of the mountain. The sharing of practices will bring us closer to the tipping point.”
When will the tipping point, that shining light in the distance, actually come? According to our panelists, it will come when impact investing is universally recognized beyond the social sector as a real phenomenon that has the potential to make the right kind of impact, serving the communities that need to be served. For that to happen, those of us who are focused on social enterprise and innovation still have much work ahead.
You can watch the plenary below: