Guest blogger Sue Yun Chi is an Associate at SeaChange Capital Partners, which seeks to mobilize a network of wealthy donors so they provide substantial amounts of philanthropic capital, to increase the impact of outstanding nonprofits.
I arrived in San Francisco with a sense of foreboding from the current financial crisis, but it took only a moment at the Social Capital Markets conference in sunny San Francisco to change my outlook on the future. Although the conference may have started with 650 individuals with different agendas, what transpired over the course of the conference was a movement toward a cohesive social capital marketplace. As the second day drew to a close, I came away with a sense of inspiration and optimism.
The conference offered a variety of substantive topics, from design in the developing world to sustainable US social enterprises, with keynote speaker Katherine Fulton of the Monitor Institute presenting a framework in which to place these individual sessions. In seeking balance between the goals of social impact and financial profits, she said, there exists a vast spectrum of possibilities. The optimal mix would ultimately require finding, as Steve Zuckerman translated into economic terms, the “efficient frontier.” However, in order to find this frontier, we would need to move from a series of uncoordinated actions and distinct silos to a more cohesive market. Although Katherine mentioned that we have yet to establish this market, SoCap08 suggested the beginnings of one.
You might not have seen it if you were focusing solely on the panel discussions, but loiter in the hallway, or sneak out for a coffee break, and you were bound to run into a small group of people excitedly discussing topics such as metrics, business synergies, or new ventures. These stairwell chats were encouraged and facilitated by official sessions. For example, IDEO, a global design consultancy, led a session on new and quick ways for attendees to network and find ways to collaborate. Connection Concierge led a capital networking session that grouped people by sector interest and had three-minute paired introductions. Substantive panels also fostered this type of networking, as they offered a taste of what both participants and panelists had to offer and wanted to discuss. Small group discussions are commonplace at conferences, but SoCap08 strived to create a true marketplace environment.
A bird’s eye view into Herbst Pavilion would have shown a bustling marketplace with buyers, sellers, and intermediaries primarily exchanging ideas about financial services, information technology, and a host of other social products. To be fair, this might not be the social capital market that the conference title referred to, but it offered a positive outlook on what’s to come.
As someone interested in the syndication of philanthropy to get non-profits to scale, I found myself in discussions on the role of traditional philanthropy. For example, some were saying that philanthropy could never move social impact to scale because it doesn’t offer the incentive system and capital- raising potential that private markets offer. Surely there are sectors where this statement applies, but what about non-profit organizations that deliver critical services that have not yet been valued by the public as a marketable good? Isn’t there a role for philanthropy to support organizations that aren’t yet ready or suitable for the market?
A few attendees made the point that, in the evolution of social markets, philanthropy has allowed organizations to take risks in their efforts to achieve social impact in ways the commercial market would never allow. For some organizations, success in philanthropy has allowed them to access commercial lines of credit. For others, it has provided the “proof of concept” needed for society to support the commercial viability of socially-minded ventures. This debate helped to clarify the different points on the spectrum of social and financial return, and the different options that lie between pure philanthropic and pure profit plays.
As with any marketplace, you could find those who were willing to collaborate and others who were happy to challenge and disagree. One importance of a convening such as this is to find those who think differently and then to work together, to produce a more nuanced view of what works, when, and why. A market entails creating various products and services to meet the needs of organizations according to their specific structures, goals, and needs. Understanding these differences is what will produce a market, move us towards product and service sophistication, and ultimately find that “efficient frontier” for social capital markets. Attendees recognized the timing of this conference as a boon; after all, what better time to move this agenda forward than during one when the mainstream market is looking to redefine itself?
On the upper east side of Manhattan, in a place where an espresso cup costs $79, you will find a courtyard full of inventions designed not for the fabulously rich, but for people who do not have access to basic goods and services. This courtyard is in the