Rob Katz

Social Capital Markets: Cindy Chen on Breaking Silos

Cindy ChenGuest blogger Cindy Chen is a 1st-year MBA student at the Haas School of Business at UC Berkeley, and is interested in helping businesses incorporate impactful social and environmental factors into the design of profitable strategies. Prior to Haas, Cindy worked on business development and consulting for the manufacturing and supply chain of labor-intensive goods in developing countries.? She is a graduate of M.I.T. with a degree in Management Science.

By Cindy Chen

Here at Social Capital Markets, Breaking Silos was another great panel, and one that was especially relevant to our present moment in history. The session’s original agenda was the dismantling of silos as the keystone of the new social capital movement. But given the meltdown of the financial sector in recent weeks, the session evolved into a frank discussion of the successes and failures of cross-sector partnerships and future steps to accelerate the social capital market.?

Katherine Fulton of the Monitor Institute skillfully moderated the diverse set of panelists and encouraged interaction and dialogue with the audience.? The first panelist was David Erickson of the Federal Reserve of San Francisco’s Center for Community Development Investments.? Erickson kicked off the session with a history of the Federal Reserve and its influence on affordable housing in the US.? One important milestone in this history was the Community Reinvestment Act, which stipulated that regulated financial institutions provide credit and deposit services in low-income communities.?? Today, CRA is often blamed for causing the sub-prime crisis, although Erickson noted that it is actually the unregulated mortgage companies and investment banks that are in trouble.?

Next up was Robin Hacke from Living Cities, who provided an ideal case study of cross-sector partnerships.? Living Cities is a philanthropic, corporate and public sector partnership that brings the power of financial markets to urban neighborhoods. Their core value is in bringing together organizations with vastly different motivations – foundations, communities, financial institutions with CRA requirements- and initiating the challenging conversations that are required to reach a common goal.? It was interesting that their model is not restricted to a single issue, but has much broader implications.?? By being in the business of breaking silos, Living Cities can address issues beyond affordable housing to incorporating education, health and wellness, and other community needs.

The third panelist was Sabha Sobhani from the United Nations Development Programme’s Growing Inclusive Markets Initiative. The Growing Markets Initiative is a multi-stakeholder initiative that addresses how business can contribute to human development and the Millennium Development Goals.? Sobhani emphasized that doing business with the poor can create value for all, as the poor can be both clients and customers on the demand side, as well as employees and business owners on the supply side.? His latest publication, Creating Value for All, showcased 50 detailed case studies of successful inclusive business models.

As the new social capital market continues to take shape, one of the biggest challenges the panelists mentioned is scaling efforts in new social areas and geographies.? To do so, creativity and innovation are needed to build a common goal and set of incentives for all of the parties involved.??Creating this alignment will enable the greatest impact in breaking down barriers and increasing communication between the public, private, and nonprofit sectors.