Social innovation is gaining a lot of momentum along the two coasts of the country. San Francisco, Seattle, Boston, D.C., New York are just a few places where these new ideas are taking hold. The Bay Area alone seems to be a hotbed of social investing, venture philanthropy, social enterprise, etc. The Social Capital Markets Conference earlier this month in San Francisco brought together leaders in the social investing, philanthropy, nonprofit, social enterprise space to talk about how to create a social capital market (a market for capital employed towards solving social problems). You can read a roundup of different blogs on the conference here and see video of various sessions here.
At the same time, foundations in the Bay Area, New York, Boston understand this growing movement and are providing growth capital and other incentives to help social entrepreneurs find and solve the root causes of problems.
These cities are witnessing an exciting blend of talent, money, great ideas, energy, initiative and enthusiasm that is resulting in some new ways to tackle the many problems facing our country today.
I’d like to see that similar energy and enthusiasm here in Austin and in the Southwest region of our country. Austin is the 3rd largest venture capital city in the country. I would argue that being a venture capital center makes Austin a ripe candidate for social innovation. San Francisco and Seattle (venture capital cities #1 and #2) have embraced social innovation and are home to several venture philanthropy funds, capacity and growth capital-focused foundations, social entrepreneurs, social investment funds, and social enterprises. Over the last ten to fifteen years these communities have fostered a new way of thinking about and blending the for-profit, non-profit and government sectors in order to find solutions to complex social problems.
I see the same opportunity for Austin. We have a wealthy, talented entrepreneurial sector, a diverse nonprofit sector, and complex social problems. If we can embrace social innovation here we can not only solve our own problems, but also, and more importantly, we can add to the national conversation. We need to come together with new ideas that tackle our problems at the root. The problems of the economy, education, healthcare, poverty are too large for any single entity or sector to solve. These times call for bigger solutions. Social innovation provides those solutions.
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.
As I mentioned in my last post, in the past few years there has been a dramatic increase in the number of gatherings and conferences for those interested in social innovation. Here is just a sample of some of the most interesting conferences bringing together people working on and thinking about social entrepreneurship, social enterprise, social investing, and so on. Many of them are happening this month. Those that have already passed will likely hold them again around the same time next year, so check back.
Harvard Business School’s Social Enterprise Conference, March 2008
New Profit’s Gathering of Leaders, March 2008
The Feast in New York City, October 2008
Social Capital Markets 2008, October 2008
Social Venture Network’s Fall Conference, October 2008
Investor’s Circle Fall Conference and Venture Fair, November 2008
Net Impact Conference, November 2008
Social Enterprise Alliance’s 10th Annual Social Enterprise Summit, April 2009
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