On Monday, April 26th, 2010, I participated as member of the media team in the ReVisioning Value 2010 conference, organized by Springboard Innovation and Social Enterprises. This is the second of two resulting guest posts, coming up on the Springboard Innovation Blog.
Also read my take on social ventures, “Is social enterprise the ultimate sustainable organization?”
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ReVisioning Value 2010 attendee Megan Strand summarized her “mind-bending takeaways” from the conference on her InCouraged blog with the post titled “Disturbed”.
Then she asked me to offer my main takeaway from the conference. Even after posting my comment I still can’t decide whether I, too, should be disturbed, or whether I should rejoice my old bias has proven rock solid:Â market capitalism continues to be the worst economic system except for all others that have been tried from time to time.
In her opening address, Springboard Innovation’s very own Amy Pearl previewed the conference by highlighting its aims: 1) to redefine the meaning of value and 2) to demonstrate how to use profit-seeking ventures to generate social and environmental good. Put another way: We must utilize the traditional market capitalism tools and mechanism to benefit people and the planet.
From that standpoint, ReVisioning Value 2010 succeeded. Participant Elizabeth Hoffecker Moreno, of Social Innovation Partners, found it “inspiring and radical that people are subverting the dominant paradigm through action that looks mainstream.”
According to Dave Chen, of Equilibrium Capital, this has been happening over the past decade or so, as we’ve seen a transition from philanthropic to capital markets in various sectors, such as clean energy or land conservation.
On the same panel, “Measuring and Marketing Social and Environmental Value”, Patricia Farrar Rivas, of Veris Wealth Partners, emphasized that “philanthropy alone cannot solve global issues”, a sentiment echoed throughout the conference.
Both Dave and Patricia (as well as a number of other speakers) emphasized the need for social ventures to demonstrate their impact with data. As Drew Tulchin, of SEEP and the third speaker on the measurement panel, pointed out, blended value investments tack on social on top of financial considerations in assessing the value (and valuation) of social enterprises.
Inasmuch as such ventures must vie for funding and investment to scale their generation of social and environmental benefit, they must demonstrate good-old hard-currency profitability. Social value is good and fine, but even the investors specializing in social enterprises seek financial viability.
An entire panel, titled “From ‘Fundable’ to ‘Investable’: What It Means for Nonprofits and Social Businesses at All Levels of Growth” spent its time on ways social enterprises can obtain the funding necessary for their good works. To underscore the point, panelist Josh Cohen, of City Light Capital, said, “building a social business is harder than building a non-social business because you must generate comparable [financial] returns”.
As you attempt to scale social ventures and move the generation of good into the mainstream of business, you have had to, and must continue to, re-evaluate value by blending social-impact metrics with financial indicators. In circling back to capital markets, you must also — and perhaps first and foremost — demonstrate social impact pays. While moralists debate whether profiting from helping the poor is evil, social ventures will continue their march into the economic mainstream.
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