At the beginning of anything there is chaos, so it is with the creation of the social capital marketplace. Day 2 of SoCap was about understanding and starting to discuss the chaos that is emerging in this marketplace. As Antony Bugg-Levine from the Rockefeller Foundation said in the plenary about creating infrastructure for this new market, there are a lot of or’s right now, but we would like to make them and’s. He meant that there are opposing ways of thinking about and doing things in this emerging market, but we would like to be at a place where we don’t have to choose, where we can have both, instead of just one of the options. Some of the or’s he mentioned are:
- Knowing vs. believing
- Measuring vs. doing
- Mission vs. scale
- Story vs. substance
- Metaphor vs. methodology
And I would add to that:
- Nonprofit vs. for profit
- Financial investing vs. philanthropy
- Venture philanthropy vs. Social investing
- Government vs. private money
And the list goes on. The social capital market is emerging from a binary system of financial investment on one side and philanthropic donations on the other. Mission and money never mixed. That either-or, however, is becoming an and. So too, are so many other distinctions. It used to be that a nonprofit organization was about social impact and a for profit was about profit. Now it’s both. And so on.
But what we are talking about is a radical shift in so many areas. It can be overwhelming and chaotic.
But in order for this market to survive we need to organize it. And that list is long:
- We need to create metrics for determining social impact
- We have to create various financial vehicles for the various projects and organizations out there trying to survive
- We have to change the rules and laws to make them more accepting of these new entities
- We need to figure out what business models make sense and can thrive
- We have to determine how and when to scale great ideas
- We need to drive down the high transaction and search costs in the field
- We, as entrepreneurs who dislike the bureaucracy of government, have to engage on a policy level to make change
- We have to effectively market and communicate the benefits of social investing in order to broaden the reach of the market beyond the few who have tried it
The list goes on and will take time.
There is such diversity at SoCap and that diversity is representative of the social capital markets themselves. As one participant put it “We are 1,000 outliers.” There are bankers, college students, nonprofit execs, philanthropists, VCs all brought together by a single desire to make money work better for the world. But that tremendous diversity can create dichotomies, distance, tension.
For example, the session I moderated yesterday on Growth Capital for Nonprofit Social Entrepreneurs. I feared that because the nonprofit side of the market had been under-represented at last year’s conference that there may not be much interest in the topic. To my surprise, the room was absolutely full, with probably close to 80 people in attendance. And there was a palpable sense of hunger for information among the group about where nonprofits, who have been doing mission work for years, fit into this new market.
But day 3 of SoCap is about to start, so I will leave all of that for a later post.