Rob Katz

Social Capital Markets: David Auerbach on Market Creators

David AuerbachGuest blogger David Auerbach works on strategic growth projects for Endeavor, a global organization that supports high-impact entrepreneurs.? He is a 2003 graduate of Yale University.

By David Auerbach

The “Market Creators” panel at SoCap08 provided an excellent primer in what opportunities are out there for investors looking to focus on both social gains and financial gains. As the moderator – Todd Johnson of Jones Day – observed, social returns come in many different forms: Wal-Mart’s Sustainability 360 might have an enormous social impact. That doesn’t mean a social investor would necessarily want to invest in Wal-Mart, however. So how do you sift through all the investment opportunities out there?

The panelists represented a variety of organizations that are looking to highlight social impact for investors. Mark Campanale started the Social Stock Exchange in London as a way to improve access to financing for socially-responsible businesses, such as children’s hospitals and nurseries. Deb Dunn spoke to the power of Global Giving’s online model for finding socially-responsible projects to invest in.Andrew Kassoy talked about his new organization, B-Corp, which serves as a guide for socially-conscious consumers (an estimated 60 million Americans) who have nowhere to turn to identify which companies are socially-responsible. Finally, Elise Lufkin spoke about the Calvert Giving Fund, which enables philanthropic donors to invest in a variety of investment choices that all have a social bent, ranging from pension funds to socially-responsible mutual funds.

All of these examples highlighted that, in fact, markets for social investment already exist and, as every panelist echoed, they are poised to grow. There are still challenges ahead, notably around the legal ramifications of social returns and, similarly, the precise definition of socially responsible, which continues to suffer from Justice Potter Stewart’s definition of obscenity – “I know it when I see it.” These panelists are committed to quantifying social impact and this panel certainly showed that we’re not too far away from these products having mass market appeal.