Social Innovation Comes to Texas with a Bang

As I wrote in an earlier post, I have been part of an exciting new project that is bringing social innovation to Texas.  The Texas Social Innovation Initiative is a partnership between Dallas Social Venture Partners, the OneStar Foundation, and Root Cause in Boston to help seven innovative Dallas-area nonprofits prepare a pitch for growth capital to social investors.

Social Velocity has been one of three consulting teams working with these seven nonprofit organizations to create a compelling growth capital pitch. I have been working with Big Brothers Big Sisters of North Texas helping them prepare a compelling pitch to grow their one-to-one mentoring program for children of imprisoned parents.  I’ve also been working with H.I.S. Bridge Builders to grow their education and employment training program in the poorest parts of Dallas.  Both organizations have demonstrated an ability to change lives in critical ways, they just needed help articulating their work, their results and their plans for growth to an audience of savvy social investors.

Both nonprofits will join five other nonprofit organizations to present their growth pitches to an audience of 300+ potential investors on June 10th. The pitch stage will be the featured component of a day-long showcase of social innovation, called the bigBANG!, at Union Station in Dallas.

The bigBANG! will bring together social investors, philanthropists, social entrepreneurs, nonprofit leaders and others who are interested in connecting money and social change in Texas. The day will feature a socially conscious marketplace, profiles of lessons learned by social entrepreneurs, the fast pitch stage and much more.

But the best part is that this momentum around social innovation in Texas doesn’t have to end on June 10th. OneStar is currently looking for funding to take this project around the state, giving many more innovative nonprofits the opportunity to seek growth capital for their proven solutions. I am so excited to see momentum around social innovation growing in Texas.  It just makes sense that this great big state with a commitment to social issues, a strong entrepreneurial spirit and plenty of cash would be ripe for the social innovation movement to take hold.

If you’re going to be in Dallas on June 10th, come join us!

Tags: Big Brothers Big Sisters North Texas, bigBANG!, Dallas Social Venture Partners, H.I.S. BridgeBuilders, OneStar Foundation, root cause, social entrepreneurs, social investors, Social Velocity, Texas Social Innovation Initiative

Capital for Social Entrepreneurs

I have written before about the importance of creating a social capital market in order to truly make social innovation possible.  A social capital market provides the same depth and breadth of financial vehicles to social entrepreneurs (both nonprofit and for profit) that traditional businesses enjoy.  This means that financial vehicles such as debt, growth capital, seed funding, equity deals and so on would be in ready supply to those organization’s whose business model includes a social impact component.  The upcoming Social Capital Markets Conference (the second annual this September in San Francisco) is a step in the right direction by bringing philanthropists, social investors, social entrepreneurs and others together to talk about how we bring such a market to fruition.

But there are many other examples of entities that are already out there experimenting with new financial vehicles.  Investor’s Circle is one of these.  Investors’ Circle is a network of over 200 angel investors, professional venture capitalists, foundations, family offices and others who are using private capital to promote the transition to a sustainable economy. It is the largest and oldest network of early-stage investors dedicated to funding mission-driven companies. Since 1992, Investors’ Circle has facilitated the flow of over $130 million into 200 for-profit companies and small funds addressing social and environmental issues. Investors’ Circle members have been behind Zip Car, TerraCycle, United Villages, and Verdant Power among others.

Investor’s Circle is an exciting example of what a social capital market begins to look like.  The capital investments that these investors make are different than traditional angel or VC investments.  For these investors, the social impact is critical, so they are willing to be patient about the financial return in order to make sure that it comes with social return.  As one of their investees, Jere Kolstad, CEO and President of Montana Renewables, has said:

IC Members are…investors who share our vision for more sustainable industry, and who express their commitment with patient, long-term investments.  It’s about more than money for this group—they want you to succeed financially, but not at the cost of forfeiting your social and environmental values.

Investors’ Circle is currently doing a Call for Applicants for its Fall Conference and Venture Fair to be held November 15th – 17th, 2009 in Washington, DC.  If you are an early or expansion-stage companies whose business addresses significant social or environmental issues and are in need of capital submit an application by July 31st. Companies that are selected to present to the investors receive:

• Pre-event coaching on your presentation from IC investors
• The opportunity to present to 150 angel and institutional investors interested in socially-responsible deals
• Extensive formal networking opportunities with investors

It’s a pretty great opportunity.  And a great model for bringing more capital into the social innovation space.  I’d love to see more groups like them, especially in the Southwest.

Tags: Investors Circle, Montana Renewables, Social Capital Markets conference, social entrepreneurs, TerraCycle, United Villages, Verdant Power, Zip Car

The Benevolent Energy of a New Generation

I participated in the semi-finalist judging this past week of the Dell Social Innovation Competition, run by the University of Texas’s RGK Center for Philanthropy and Community Service.  The competition invites undergraduate and graduate level students from colleges worldwide to submit business or nonprofit venture plans.  The goal of the competition is to encourage and train students to use entrepreneurial practices in the creation of creative solutions to the world’s most entrenched social problems. Through three elimination rounds of competition one winner is chosen to receive $50,000 for their venture. This year over 1,500 students representing 33 countries studying at hundreds of universities around the globe entered their ideas. 

This is the third year of the competition.  Last year’s winner, Husk Power Systems, turns discarded rice husks into energy in India.  The social enterprise is so innovative they even found a way to turn the ash from the burned husks into fertilizer and cement.  Husk Power Systems was named FastCompany’s Social Enterprise of the Year last year.

The judging process culminated last night in our final decision making meeting.  We were charged with narrowing the 75 semi-finalists down to 3 finalists and an alternate. Those finalists will be announced today.  It was in some ways an overwhelming charge; the ideas and energy of the applicants was amazing.

In the process of judging, however, I was struck by two things.  First, it seems that there is something happening in this generation of students.  When I was in graduate school, towards the end of the dot-com era, most student interest and energy was channelled towards technology opportunities.  So many of my classmates were swept up in the  dot-com craze, hoping to become the next multi-millionaire entrepreneur.  Many thought the old notions of profitability, company valuation, business planning were outdated.  Dot-coms were ushering in an entirely new business model that was breaking all the rules.  Obviously that didn’t pan out.

Now it seems a new energy and excitement is sweeping college and graduate school campuses.  But this energy and excitement has a much more benevolent spin to it.  Now  the rage is to create a social enterprise, to become a social enterpreneur.  The Dell competition is one of countless social enterprise competitions across the globe. There are so many problems facing our world from tremendous poverty and disease, to global warming, to inadequate food and energy supplies, to disparate educational opportunities.  The push is no longer to find the next greatest technology in order to make money, but rather to find the next greatest technology in order to save lives or save the planet.  That’s a really interesting switch.  And an exciting, inspiring one.

Which brings me to the second thing that struck me.  Just as there was hubris in the dot-com boom, I can’t help but wonder if there might be just a little hubris in this trend as well.  I don’t want to dampen the energy and excitement of this generation of idealist at all.  I marvel at their resolve to work towards righting so many disequilibriums.  But I do wonder if some of the social enterprises that emerge, not necessarily in this competition, are borne of Americans thinking that they have the answer to what ails other countries.  I think true solutions to the world’s problems have to be envisioned and created locally, that is to say a social entrepreneur needs to spend some serious time living, breathing, researching and listening to the market they are trying to penetrate.  They also need to find significant local partners to suggest, refine and challenge solutions.  Western countries can absolutely offer ideas and certainly resources to make those solutions a reality, but I’d hate to see anyone in this new generation acting like the missionaries of the 19th and 20th centuries bringing “answers” to developing countries.

That’s not to say that any of the plans we reviewed suffered this fate.  Rather, I’m merely offering a caution to the great idealists of this new generation.  By all means, keep the ideas, energy, enthusiasm and initiative coming.  But at the same time, let’s take a step back and make sure that the ventures being created are locally grown and developed.  That is the only way that they will truly be sustainable solutions.

Tags: Dell Social Innovation Competition, FastCompany, Husk Power Systems, RGK Center, social entrepreneurs

Signs of a Movement

Things are definitely happening.  While our country is struggling to address the largest financial crisis since the Great Depression, to elect a new President, and so on, new ideas in the social sector are building momentum.  Here are just a few examples from the past week of a growing movement:

• The SoCap 2008 (Social Capital Markets) Conference held in San Francisco this week and sponsored by Good Capital saw its registrations double after the financial collapse.  Sessions yesterday were beyond standing room only.  The conference brings together people interested in changing the world through sustainable business (businesses with a social mission). Perhaps some of the talent and resources from the failure of investment banks will be channeled into social return on investment.  It seems people are hungry for a new way.
• New Orleans continues to be a mecca for social innovation.  The Idea Village, a nonprofit working to envigorate the city’s entrepreneurial engine, just announced a $100,000 business idea competition.  The idea has to help retain and engage 25-34 year olds in New Orleans.
• The Council on Foundations wrote an open letter to their 2,000 member foundations asking them to step up during these difficult economic times and help the nonprofits in their communities.  Rather than hide behind the turmoil and their shrinking endowments, foundations should “continue to serve the common good in these uncommon times.”  It remains to be seen what will come out of this call and their members response to it, but the fact that the largest association of foundations in the country realizes the enormity of the situation and wants to react in a new way is encouraging.

Tags: Foundations, New Orleans, Social Enterprise, social innovation

Google’s Social Innovation Competition

Google has just announced the ultimate social innovation competition:  a $10 million prize for up to 5 of the most innovative ideas to help the world.  Their “10 to the 100th Project” encourages people to submit an idea to improve people’s lives.  Broadly, it can be any idea that improves education, the environment, communities, etc.  An overview of the competition is here and the competition site is here.  Submissions are accepted until October 20th, so get thinking.

Tags: competition, Google, improvement, innovation, prize, social, social innovation, world