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

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

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THE MOMENTUM BUILDS....

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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

SOCAP 2009

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“WE NEED AN OBAMA!” US INNOVATION IN A CANADIAN CONTEXT

THE MOMENTUM BUILDS....

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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

SOCAP 2009

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

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ATTRACTING INSTITUTIONAL INVESTMENT…THE SUPPLY SIDE

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ATTRACTING INSTITUTIONAL INVESTMENT…THE SUPPLY SIDE

The social capital market has continued to evolve in financial structure and product set, encouraging increased investment but more work is

needed.

SOCIAL ENTERPRISE SPACE

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MARK CHENG ON LEVERAGING PHILANTHROPIC DOLLARS

PLAY VIDEO >

THE MOMENTUM BUILDS....

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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

SOCAP 2009

HOW CAN WE BUILD THE DEMAND FOR SOCIAL CAPITAL INVESTMENT ?

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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

 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

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DAVID GREEN: A SOCIAL PERSPECTIVE ON BUSINESS ACUMEN

PLAY VIDEO >

THE MOMENTUM BUILDS....

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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

SOCAP 2009

WHAT IS IMPACT AND HOW DO WE MEASURE OUR RESULTS?

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Metrics are the carbon of the social impact ecosystem and the policy environment is the oxygen

- Lucy Bernholz, Blueprint R&D

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IMPACT EVALUATION IS…

Confusing Fragmented Misaligned Uncomfortable

Simple and understandable Outcome focused

Aligned

SOCAP’S RESPONSE: ADVANCEMENT IN THIS COMPLEX SPACE…

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Global Impact Investment Network (GIIN)

Impact Reporting and Investment Standards (IRIS)

Pulse

Outcome Dashboard

Tools and Resources for Assessing Social Impact (TRACI)

B Corp

SROI

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TRADITIONAL APPROACH, NEW LANGUAGE

Investors seek out new opportunities for investments, new ways to cultivate opportunities

Traditional Approach Social Approach

Investor Network GIIN

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TRADITIONAL APPROACH, NEW LANGUAGE

Investment decisions are predicated on the availability of research and information

Traditional Approach Social Approach

Publically held or private service

Publically held or private service

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TRADITIONAL APPROACH, NEW LANGUAGE

And, rating systems

Traditional Approach Social Approach

Morningstar, S&P, Moody’s

IRIS, B Corp

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TRADITIONAL APPROACH, NEW LANGUAGE

Investors rely heavily on the accuracy and completeness of the available information

Traditional Approach Social Approach

Audit and Assurance Audit and Assurance

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TRADITIONAL APPROACH, NEW LANGUAGE

Based on, Standards

Traditional Approach Social Approach

GAAP/IFRS IRIS

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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

Traditional Approach Social Approach

Business management systems (i.e ERP)

PulseTRACI

Outcome Dashboard

CANADIAN DAY CONFERENCE KICK-OFF HOSTED BY

PLAY VIDEO >

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CANADIAN DELEGATION: CURRENT STATE CHALLENGES

PLAY VIDEO >

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CANADIAN DELEGATION: OPPORTUNITIES IN SOCIAL FINANCE

PLAY VIDEO >

WHAT DOES THIS MEAN FOR CANADA?BRAINSTORMING OPPORTUNITIES

WHAT DOES THIS MEAN FOR CANADA? KEY TAKEAWAYS AND NEXT STEPS

Participation is increasing in the emerging social finance movement in Canada

Policy change is critical

Social finance is response to important dynamics of change

Collaboration

Social Task Force

Change – not-for-profit

Change – for-profit

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CANADIAN SOCAP 2009 DELEGATION