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SOCAP 2009: Trends, mandates and action steps required for the creation of a robust social capital marketplace

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    Notes on slide 1

    Intro slide with focus of SOCAP 2008 in the recession until now – movement towards more capital injection, people, Walk through agenda with the final point being that we as Canadians got together seeking to place structure and framework around the Canadian mandate.

    The US White House Office of Social Innovation and Civic Participation Opening remarks ( explain using two points); focus on 3 person team and the continued focus on partnership not a top down approach. GovernmentGovernment as an enabler - Measurement & DataProven outcomes with common principlesIncentives Canada – government has made an effort with leadership but yet will have intermediaries to distribute funds = PARTNERSHIP Ie- we don’t want this to look like the health care system. OVERALL – government can be aligned but up to individual actors to create policy change and create a dynamic marketplace.

    Now that we have explained the top town approach we are moving towards government involvement. Let us move towards the next layer – the institutional capital markets and their increased participation.

    Jed’s quote ( quick plug for December 3rd), as the government involves itself to become a convener and partner. How are the markets reacting? What change has taken place since the bottom of the recession? Canada? Humanizing capitalTailoring finance structures, relationships and partnerships that produce better deals for low-income/disadvantaged people (David Green – Ashoka)Philanthropy vs. Investment capital Discrepancy between philanthropy and investment capital is disappearing - desire for sustainable funding - longer term view and investment partnering - leverage other capital pools

    Discrepancy between philanthropy and investment capital is disappearing Classic Market Assumptions are less obvious Co Creation - Philanthropy as an investment class; can be used as first loss capital Creation of financial products that encourage mainstream participants Mark Cheng & his remarks at the SOCAP Canadian Day (  More focus on infrastructure More transparency Emphasis on value creation and valuation techniques   Market Assumptions - Models are clear, subsidies for small businesses, value is easy to identify, Modern Portfolio theory has all of the answers for Risk and Return

    Now that we have explained the top town approach we are moving towards government involvement. Let us move towards the next layer – the institutional capital markets and their increased participation.

    Too many non-profits can not demonstrate their value; capital is not used effectivelyUnderperforming non profits, little collaboration, no effective measurement and severe funding limitations Reliance on Government Funds for mission fulfilment Need to create reliable business models that can scale FAILUREGood to Great – Social Sector: encourage business acumen, speak social languageDavid Green Video Clip Scale and move forward – failure/ 80% businesses fail yet not part of our language or system

    Noted consultant for many of the top foundations in the US and analyst of the philanthropic industry. She is founder of a strategy consulting firm specializing in research and design for foundations. Nearly every panel in some way brought up the need to increase transparency and credibility in how organizations define, track, and report on the social and environmental performance of their investments - whether they be in nonprofits or for-profits

    Metrics are not used to evaluate organizations and make knee-jerk reactions to the results. They are used to determine whether an organization will be able to have a sustained valuable impact and scaled social change capabilities.

    Introduce measurement and standards world but not important to get bogged down in the details and acronymns. Important is the vision and similarities to traditional investment world. Important to understand how metrics and evaluation related to the flow of capital into social capital markets and the necessity for enterprise to demonstrate valueInvestors are looking for social impact but are not prepared to deal with detailed metrics and social analysisSara Olsen – there is no easy answers. Metrics/measurement is an uncomfortable discussionThe process: innovation  risk  rewardThere needs to be a clear value proposition for impact measurement – until then, it will feel very chaotic (Sara Olsen SVT)As impact investment increases in take-up, so does impact measurement scrutiny and fragmentation between players in the sector

    Transition to Canada Day – Summarize: work in progress, accept challenges, accept timeframes. As impact investment increases in take-up, so does impact measurement scrutiny and fragmentation between players in the sector

    Collaboration – socialfinance.ca and national working groups Social task force – group of business leaders to champion a team working to provide tactical recommendations to advance social environment and financial returns on investment Change – nfp – introduce and embrace more diversified, sustainable and resilient business models Change – fp – principle mentality shift to seek out investments that will produce social and/or environmental returns as well as financial Identify Causeway involvement for all takeaways

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    SOCAP 2009: Trends, mandates and action steps required for the creation of a robust social capital marketplace - Presentation Transcript

    1. SOCAP 2009: Trends, Mandates and Action Steps required for the creation of a robust social capital marketplace
      Presented by:
      Tim Draimin Adam Jagelewski
      Jennifer R. White
      1
    2. the momentum builds....
      2
      SOCAP 2009
      White House Office of Social Innovation and Civic Participation
      Inclusive participation of capital markets
      Scale of Social Enterprises
      Measurement as a means to evaluate social and financial impact
      SOCAP and Canada
      The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
    3. “We need an Obama!” US innovation in a Canadian Context
      3
    4. the momentum builds....
      4
      SOCAP 2009
      White House Office of Social Innovation and Civic Participation
      Inclusive participation of capital markets
      Social Enterprises and creation of value
      Measurement as a means to evaluate social and financial impact
      SOCAP and Canada
      The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
    5. We missed an opportunity.. It’s amazing that the average portfolio is down close to 30% while some microfinance opportunities are average a return of 7%-15% yet investors are going back to the same advisors – WHY?
      - Jed Emerson, Uhuru Capital Management
      5
      Attracting institutional investment…The supply side
    6. Attracting institutional investment…The supply side
      6
      SOCIAL ENTERPRISE SPACE
      The social capital market has continued to evolve in financial structure and product set, encouraging increased investment but more work is needed.
    7. Mark Cheng on Leveraging Philanthropic Dollars
      7
      Play Video >
    8. the momentum builds....
      8
      SOCAP 2009
      White House Office of Social Innovation and Civic Participation
      Inclusive participation of capital markets
      Social Enterprises and creation of value
      Measurement as a means to evaluate social and financial impact
      SOCAP and Canada
      The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
    9. How Can We Build the demand for social capital investment ?
      9
      We would be better off as an industry if we rid ourselves of the non profits that do not demonstrate impact; and better off if we rid ourselves of investors that don’t invest in the best possible way for impact
      - Kevin Starr, Mulago Foundation
    10.  How can Social Enterprise encourage capital investment? The Demand Side
      An investment review..
      Would you invest in a business or social enterprise that did not demonstrate results and impact clearly?
      Accountable, Measurable Social Enterprises & Failure
      Current State of Social Sector
      What is needed
      Business Acumen
      Rigor & Analysis
      10
    11. David Green: A Social Perspective on Business Acumen
      11
      Play Video >
    12. the momentum builds....
      12
      SOCAP 2009
      White House Office of Social Innovation and Civic Participation
      Inclusive participation of capital markets
      Social Enterprises and creation of value
      Measurement as a means to evaluate social and financial impact
      SOCAP and Canada
      The industry continues to create structure and measurement systems with the explicit goal of creating an industry of accountable, sustainable and measured social enterprises that invites capital markets involvement
    13. What is Impact and how do we measure our results?
      13
      Metrics are the carbon of the social impact ecosystem and the policy environment is the oxygen
      - Lucy Bernholz, Blueprint R&D
    14. Impact Evaluation Is…
      Confusing
      Fragmented
      Misaligned
      Uncomfortable
      Simple and understandable
      Outcome focused
      Aligned
      14
    15. SoCap’s response: Advancement in this complex space…
      15
      Global Impact Investment Network (GIIN)
      Tools and Resources for Assessing Social Impact (TRACI)
      Impact Reporting and Investment Standards (IRIS)
      B Corp
      Pulse
      Outcome Dashboard
      SROI
    16. Traditional Approach, New Language
      Investors seek out new opportunities for investments, new ways to cultivate opportunities
      16
    17. Traditional Approach, New Language
      Investment decisions are predicated on the availability of research and information
      17
    18. Traditional Approach, New Language
      And, rating systems
      18
    19. Traditional Approach, New Language
      Investors rely heavily on the accuracy and completeness of the available information
      19
    20. Traditional Approach, New Language
      Based on, Standards
      20
    21. Traditional Approach, New Language
      Investors assume the standards and trust the ratings because the fundamental tools and management systems are in place to collect and report data
      21
    22. Canadian Day Conference Kick-off hosted by
      Play Video >
      22
    23. Canadian Delegation: Current State Challenges
      23
      Play Video >
    24. Canadian Delegation: Opportunities in Social Finance
      24
      Play Video >
    25. What does this Mean for Canada?Brainstorming Opportunities
    26. What does this Mean for Canada? Key Takeaways and Next Steps
      Collaboration
      Participation is increasing in the emerging social finance movement in Canada
      Policy change is critical
      Social Task Force
      Change – not-for-profit
      Social finance is response to important dynamics of change
      Change – for-profit
    27. Canadian SoCap 2009 Delegation
      27

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