Yesterday’s post began a summary of a preview session of the discussions that will take place at SOCAP10. Hosted at the Commonwealth Club of California, the program featured many of the key people behind this year’s program. The panel used the recent “Money for Good” report (PDF)issued by Hope Consultingto frame specific issues related to the session tracks at SOCAP10. My post yesterday summarized Hope Neighbor’s presentation of the report.
After Hope spoke, the panel began a conversation that will hopefully continue throughout SOCAP10. It focused on both how organizations can address the report’s findings and some of the challenges moving ahead in this direction.
Sean Stannard-Stockton, CEO at Tactical Philanthropy Advisors, and curator of the Tactical Philanthropy track, acknowledged the general appeal of impact investment to individual donors, but noted that establishing the practice could be challenging. Importantly, he said that there needs to be a new supply side to explain why the impact investment market is important, which will drive individual demand. Further, minimal exposure to impact investments by individual investors would help develop a body of practice that can increase such investments in future years.
Kevin Jones, founder of Good Capital and the convener of SOCAP10, responded that this is the way people think today – the impact investments and charitable giving markets are separate. Individual investors do not use portfolio thinking when examining their charitable giving and impact investments. However, there is also a lot of mixing of market behavior going on right now by these individuals. More research and tracking of investor and donor behavior will show how to best move forward in building the impact investment market.
Toward the end of the panel discussion, Amy Benziger, co-producer of SOCAP10, asked the panel to list examples of top opportunities for impact investments. David Hodgson, co-founder of the Idea Hive, and curator of the Innovation in International Development track, highlighted LifeGivingForce as a social impact organization that has combined an “LLC and a Foundation under the one umbrella” that has received R&D focused impact investments. The LLC provide water purification technology for disaster relief and recovery. Its affiliated foundation delivers support to social and economic development programs in Haiti.
Melanie Cheng, founder of OmOrganics.org and FarmsReach.com and curator of the Food Systems track, didn’t cite any specific organizations but did note that the top opportunities should focus on key organizations able to generate change that need capital now. And while some of those organizations require charitable gifts, most of their funding needs are more appropriate in scale for impact investments.
Sean, in particular, pointed out a Tactical Philanthropy track session that will focus on Evergreen Lodge, a social propose resort in Yosemite, which has used both impact investments and charitable giving. Sean wrote a blog post detailing the session in more detail.
As the audience engaged in the discussion, it raised questions that highlighted important issues that should keep resonating during SOCAP10. Those questions focused on 1) the ongoing need for more transparency, including information on how funds provided for impact investments or as charitable donations are being used by nonprofits; 2) global examples that can inform the SOCAP audience; and 3) shifting the discussion to include a focus on sharing social impact approaches away from propriety approaches by organizations.
Hope closed the panel discussion by restating a question from earlier during the panel discussion: will improved information systems be used by donors and impact investors as and change their behavior? The panel agreed that for individual investors, the social and environmental factors will become important as second order considerations as they gain confidence on the market development. For charitable donors, though, it remains difficult to believe that they will place more importance on performance and outcome metrics, and modify their behavior in the short term. Ultimately, we need to find more creative ways to convince donors to give more thought about how and where they allocate their resources – whether it’s through impact investments, charitable giving, or a combination of a blended approach. The discussions at SOCAP10 should certainly move us in that direction.
Disclaimer: This post is part of a series of posts on the SOCAP10 conference. As part of the blogging coverage for the conference, I was able to register to attend at a discounted rate. A version of this post appears on the SOCAP10 blog.
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