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Social Finance

A Monster List of Resources For Nonprofit Innovation

Since today is Halloween I wanted to continue a tradition I started last Halloween of providing a list of resources about nonprofit innovation. I’ve created the list below by culling from our constantly evolving and much larger list of resources on the Social Velocity website. Below I’ve handpicked the tools I think are most useful for wielding the money sword, connecting to the larger social innovation movement, and finding inspiration. Please add to the list in the comments of this post.

Happy Halloween!

Wielding the Money Sword

Connecting to the Social Innovation Movement

Finding Inspiration

What have I missed? What books, conferences, articles, tools do you find inspiring and insightful? Add to the list in the comments.

Photo Credit: dimland

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The Future of Financing Social Change: An Interview with Antony Bugg-Levine

In this month’s Social Velocity blog interview, we’re talking with Antony Bugg-Levine. Antony Bugg-Levine is the CEO of Nonprofit Finance Fund, a national nonprofit and financial intermediary dedicated to mobilizing and deploying capital effectively to build a just and vibrant society. In this role, Mr. Bugg-Levine oversees more than $225 million of capital under management and a national consulting practice, and works with a range of philanthropic, private sector and government partners to develop and implement innovative approaches to financing social change. He is the co-author of the newly released Impact Investing: Transforming How We Make Money While Making a Difference.

You can read past interviews in our Social Innovation Interview Series here.

Nell: You’ve recently taken over the helm of the Nonprofit Finance Fund, a pioneer in cutting-edge ideas for better capitalizing the nonprofit sector, like growth capital. What’s next for NFF? Where do you go from here?

Antony: I am humbled and excited to be given the responsibility to lead an organization with such a strong legacy and talented staff. After 31 years of working with nonprofits and funders, Nonprofit Finance Fund understands as well as anyone how we can best raise and use financial resources to create sustainable organizations that together weave the fabric of just and vibrant communities.

Honing and sharing these insights is more important than ever. As the economic crisis has turned into an intractable employment crisis, the communities we work with and the organizations that serve them are facing unprecedented challenges. Business as usual is no longer going to work. But business-as-unusual is increasingly exciting. The crisis has created new opportunities by shaking loose long-held barriers that kept the worlds of social change and business firmly apart.

NFF is well-poised to help ensure that these new opportunities bear fruit, by doing what we have always done–bringing a data-driven approach to identifying what works, and working deeply and closely with social change organizations while communicating effectively with capital providers. We will have more details on our specific strategic direction in early 2012 but are very excited about the possible directions we can take. In many ways, this is our time and we hope to be worthy of these opportunities.

Nell: You recently wrote a book with Jed Emerson about impact investing that charts the field and where it might be going. But the field of impact investing, especially in places like the Social Capital Markets Conference, seems to separate itself from philanthropy and the nonprofit sector. How can and should impact investing and philanthropy collide and what will make that happen?

Antony: Advocates of impact investing have done a great job in the last few years explaining how for-profit investment can be both a morally legitimate and economically effective tool to address intractable social and environmental challenges.

But many of these challenges have been intractable precisely because neither markets nor governments have figured out how to address them. So impact investors will have to collaborate with philanthropists, nonprofits and governments to create comprehensive solutions when no one piece can work alone. At NFF we are increasingly seeing the power and necessity of a “total capital” approach where, for instance, we provide impact investing capital in the form of loans, human capital in the form of (grant-funded) consulting support, and government assistance in the form of subsidy or loan guarantee. This is particularly important as the unemployment crisis places increased demands on already strained organizations. For example, to support a set of leading arts organizations, we secured a PRI from the Mellon Foundation that enabled us to provide loans alongside technical assistance to leading arts organizations. We are now developing a similar integrated approach to support social service agencies such as homeless shelters and soup kitchens.

Nell: The vast majority of money is still bifurcated with for-profit investing on one side and charitable donations on the other. What will it take to change that and get more capital to social change organizations?

Antony: When I began this work at the Rockefeller Foundation almost five years ago I thought we were in the deal-making and infrastructure building business: that a few compelling examples of how impact investing can work and the development of networks and measurement standards to facilitate collaboration would be enough to allow impact investing to take off. But now I realize how impact investing threatens deeply-held mindsets of a bifurcated worldview that insists the only way to solve social challenges is through charity and the only purpose of investing is to make money.

To overcome this belief will require more than analysis and anecdote. Instead we need to build new systems to support the new aspirations. We need:

  • a regulatory and legal framework that recognizes and incentivizes the contributions impact investors can make;
  • educational systems that train young professionals to adapt investment tools to social purpose;
  • measurement systems that allow us to assess and compare the blended value investments generate;
  • nonprofit and for-profit social enterprises equipped to navigate the increasingly complicated strategic options that impact investors present; and,
  • a philanthropic system organized around the question “How can we deploy all our assets to address the social issues we care about?” rather than “How do we give well?”

Nell: What is your idealized financial future for the social change sector? What level and kind of change would you ultimately like to see?

Antony: I envision a day when we organize the social change sector around the problems we seek to solve rather than the tools we happen to hold. Instead of fetishizing the moral or practical supremacy of grant-making or investing, in this world we will recognize that each has a role to play, and they are often most powerful when taken together. Exciting examples are already taking hold. In California, the California Endowment organized a multi-sector coalition to put an end to the “food deserts” that left many poor communities without easy access to purchase healthy food. This collaboration resulted earlier this year in the launch of the FreshWorks Fund that has mobilized grant capital, bank capital, impact investing capital and intellectual capital to bring new grocers into underserved communities. At NFF, we are applying a similar approach in the ArtPlace initiative, which is using arts as an engine for economic development in the US. This initiative has mobilized substantial commitment from private foundations, the US government and commercial banks.

Nell: How much of a panacea for social problems is impact investing? Can double bottom-line investing truly revolutionize how money flows to solving problems? Will it overtake government and philanthropic investment in social problems? And should it?

Antony: Impact investing is not a panacea. We cannot create and sustain a just and vibrant society unless we recognize that many organizations generate social value that cannot be monetized, and instead must be supported through charity and government. But we also must not ignore the vast potential in the trillions of dollars of for-profit investment capital currently lying on the sidelines of the social change agenda.

The global capital markets hold tens of trillions of dollars. Unlocking just one percent for impact investment will bring multiples of the approximately $300 billion in total annual charitable giving in the US. So impact investing can create a huge difference in how quickly or comprehensively we can address those social challenges where lack of money is the main issue.

Impact investing can also be revolutionary by accelerating new discipline in how we identify, assess, and manage our social change agenda. At their best, investors bring a rigor and discipline in allocating scarce resources to their most productive use, where there is a market-based solution. Impact investing will help spur a movement to link social spending to outcomes that a set of organizations can achieve, rather than just the outputs any one organization can deliver. We need to be careful, however, to recognize exactly where these new approaches will work and where simplistic and reductionist thinking will divert resources away from worthy causes or leave behind worthy organizations.

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My Favorite Blogs

I just updated the blogroll on the Social Velocity website. You can see the brand new list under “My Favorite Blogs” on the right hand side of the Blog page, and I’m also including it below for those of you on the RSS feed.

These blogs are my favorite in the social/entrepreneurship/financing worlds. By my “favorite” I mean that these blogs:

  • Consistently create pithy posts that make me think, as opposed to just regurgitate a press release or old argument
  • Include new ideas and arguments
  • Cover the social entrepreneurship, nonprofit, philanthropy, start up, social finance, and/or social business worlds
  • Seed or contribute to larger, interesting discussions in the blogosphere

So here is my list of favorite blogs:

But I always love to be introduced to new blogs, so please tell me your favorite blogs in the comments. If your favorite blogs become mine, I’ll add them to my list.

Photo Credit: Don Cheps

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The Social Capital Markets Conference

In the emerging field of social innovation there are a plethora of conferences here and abroad.  Some are better than others.  One that I am particularly looking forward to is September’s Social Capital Markets conference in San Francisco.  This is only the second year of the conference, which brings together social investors, foundations, social entrepreneurs, social venture funds and others interested in expanding the capital available to social entrepreneurs.

In the inaugural conference last year, 600 people from 26 countries attended.  In fact, there was a last minute rush of conference registrations shortly after the financial market collapse, painting an interesting picture of traditional finance migrating to social finance.

The purpose of the conference is to create “a new kind of capital market, a new way of doing business that takes into account people, planet and profit.”  In essence they are attempting to build momentum and action around creating a capital marketplace for social good–financial vehicles for social entrepreneurs both profit and nonprofit.

Whereas last year’s conference focused mainly on for profit social entrepreneurs, this year’s conference is adding some sessions on what conference founder Kevin Jones calls “our nonprofit cousins.”  For example, the opening keynote address will be about how the Obama Administration and its Office of Social Innovation is working to scale high-functioning non-profit organizations to create change. And I’m even getting into the game by moderating a panel about some of the capital tools nonprofit social entrepreneurs have used to go to scale.

I think SoCap provides an excellent venue for bringing all of those working towards expanding the capital available to social entrepreneurs together.  My hope is that this conference goes beyond great examples and great networking and actually helps make more money available to social entrepreneurs, whether they are creating profit or not.

If you are interested in the social capital market space, you don’t want to miss this conference.

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The Convergence of Social and Finance

If you are interested in the dramatic shifts the economy is currently undergoing and what it means for the long term, take a look at the article “Notes from the Leading Edge of Social Finance,” in the Fall issue of Green Money Journal written by Don Shaffer.  Don Shaffer is the CEO of RSF Social Finance, a 20+ year-old, leading-edge, San Francisco foundation that makes loans and grants to nonprofits. He is also the former interim head of Investors Circle, a 200+ member giving circle of venture capitalists who invest in businesses working towards a sustainable economy (social and environmental issues). Don gives a very interesting overview of where the economy is heading, and I think he is right on.

He argues that we are no longer content with an economy focused solely on individual gain, rather there is a new convergence of financial, social and environmental gain, where what is good for the investor is also good for society as a whole. Ultimately he sees the new economy “harnessing the striving energy and entrepreneurial drive of the American people to move more towards collaboration and partnership, instead of maximum individual gain, while honoring the power of free markets.” Here’s an excerpt:

International microfinance is drawing a lot of interest this year from U.S. investors. For good reason, it’s great to see direct investment going to small, growing entrepreneurial ventures in the developing world. But what about our neighbors? As the wealth divide continues to widen in this country, both in urban and rural areas, we are asking ourselves at RSF, “How can our clients best support small and medium-sized, privately held companies in the U.S. that have strong community development and ecological sustainability goals?”…We are creating a learning community that asks hard questions about money and how we use it, acknowledging that money is simply a form of energy that creates a relationship between human beings. What is true wealth…What is the right balance between investment and philanthropy…What does it look like to re-imagine money to serve our highest aspirations? What, specifically, will it take to develop a network of risk and liquidity appropriate financial vehicles that are completely different from the products of Wall Street?

These thoughts and questions are very similar to the conversations that were going on at the Social Capital Markets Conference earlier this month and that are going on around the country.  We are witnessing a pretty dramatic shift, and it is fascinating.

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Thursday, October 23rd, 2008 Innovators, Social Enterprise, Social Investing No Comments


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