Social Impact Investing, Blended Values and Economic Recovery.

How can Social impact investing help mend the economy? We are in the midst of economic, environmental and political global change. We exist in a window of time when past models of capitalism have experienced severe market recessions and when many individuals have lost their jobs, their homes and their ability to support their families. Worst of all, many have lost hope and have lost their sense of self-worth.

To lose purpose in life can be devastating. To experience that evaporation of importance leaves a person feeling vulnerable and recognizing how fragile life can be. Interestingly, often a person in this position finds that focusing on helping others can actually help oneself. This is a window of opportunity.

Simultaneously, the free market system is undergoing change to recover and become stronger. Our youth, globally, are restless for that change, and like those occupying Wall Street and other such activities, are ready to take action. We’ve seen some of that recently here on this show in our interviews with students and young professionals who are choosing social entrepreneurship and active in developing new community programs that build awareness.
The Good Capitalist
The Plastic Pollution Coalition

Technology has reached a pinnacle where the Internet has created platforms of sharing, social media, and the planet has become accessible to most everyone in the virtual world. There are more people using cell phones than the Internet including people in remote areas of the world. Out of 6 billion people on the planet, there are 4.8 billion cell phone users. Where there is no electricity, there is still a channel for communication. Technology provides an important portion of the window of opportunity.

As we shared last week, technology is helping track social impact so that companies with “blended values,” missions that combine profit and sustainable practices with social good, can start making decisions based on measurable indices. As importantly, standards of criteria for tracking are being set so that organizational success can be compared for investors to make choices. The ability to track social impact also supports increased corporate social responsibility and improved socially conscious Boardroom decisions.
App-X Cloud Solution integrates IRIS (Impact Reporting and Investment Standards).

Simultaneously, technology giants are learning their impact on human rights. There have been cases where the Internet has actually facilitated repressive regimes to find and cruelly punish individuals expressing political dissent. In October, the first Silicon Valley Human Rights conference was held to determine accountability for technology that when used by rogue governments can strengthen their surveillance capabilities and imprisonment of dissenters.

As you can see, this is a complex problem that reaches both ends of the spectrum. Should technology be regulated, and if so, who determines when human rights boundaries are crossed, whether under the guise of providing safety against terrorism or of providing a mechanism to find and torture people against their right to freedom of speech?

For governments that are focused on social good, the arena of impact investing is opening doors to blend “charity” and for-profit. As our interview with Jennah Scott, the Program Manager for the Philanthropy Secretariat of the Government of Liberia, indicated, change is not only possible but actively happening for countries that have been plagued with civil war.
Liberian Philanthropy Secretariat

In the US, due to the economic melt-down, the scope of our social problems is financially overwhelming. It’s forcing change for our government agencies and nonprofits and leading to blended efforts.

As an example, there is a new investment vehicle called a Social Impact Bond. I read about this in the Winter edition of the Harrington Investments newsletter. John Harrington is one of the pioneers of socially conscious investing having started his work in ethical investments 3 decades ago. In his newsletter, John describes what a social impact bond is.

A Social Impact Bond enables governments to contract with private investors to provide funding for nonprofits working on long-term preventative programs that would, when successful, save taxpayers a lot of money. An example given is capital raised from the sale of a Social Impact Bond being used to fund ex-offender re-entry programs to reduce recidivism rates by 10% and saving state and federal governments $3 to $5 BILLION per year. According to the Boston Globe in January 2012, Massachusetts is the first State to request proposals from social entrepreneurs to address social issues through a Social Impact Bond.

So, as you can see, the window is open to utilize the energy and vision of our youth, to re-purpose capitalism and Board Room decisions so that values supporting social good and profit are blended to create long-term prosperity, to utilize technology to support the growth of impact investing and the growth of planetary collaboration while preventing the mis-use of technology, to utilize this time of political and economic upheaval to re-focus our values and create mutually supportive vehicles for profit and social good.

The question is, what do you do? For many who have experience the turmoil of loss that’s a question that can be hurtful, yet it’s a question that can also save a person’s self-worth. Start by becoming more informed. Listen openly each week and hopefully one message or another will resonate with you. When it does, take some time to research your own community with regard to that issue. Increase your local knowledge.
Addressing Domestic Issues and Social Equity
Socially Conscious Investing episode listing

Then take action, no matter how small you think it is. Educate your friends, family and colleagues about what you’ve discovered. Give them the opportunity to learn. You may even suggest they register for once-a-week notifications for Socially Conscious Investing.

Take time, no matter how small, each day to share your ideas, your energy, your knowledge and your money if you can. Even if you’re a bit shy, there is always someone or some way that you can share and contribute. The more you do it, the better you will feel. Doing good simply feels good, and everyone can contribute. Everyone can learn. Everyone has something to share that can help. Take action today. Keep learning and keep sharing.

Enjoy reading:
Impact Investing: Transforming How We Make Money While Making A Difference, by Antony Bugg-Levine and Jed Emerson.
The Entrepreneurial Investor: The Art, Science and Business of Value Investing, by Paul Orfalea, Lance Helfert, Atticus Lowe, Dean Zatkowsky.
The Challenge to Power: Money, Investing and Democracy, by John Harrington.

Tell your friends about Socially Conscious Investing.