socially marketing

We made many friends at SoCap (see previous post) but the most significant are those who are partnering with us under the Mission Markets banner.

We actually started talking to the Mission Markets guys in the weeks leading up to SoCap.  We clicked with them instantly both personally and professionally, and have been working closely ever since.

From a business perspective, Mission Markets is the perfect complement to socialmarkets.  We are both working towards generating maximal social impact, just from opposite sides of the for- and non-profit fence.

The mission of Mission Markets (website here) is ambitious on several levels.  First, they want to create the preeminent marketplace for the large and growing social investment sector.  In other words, they want to be the place where social entrepreneurs (e.g. solar energy, microfinanciers, …) and social investors (e.g. SRI funds, foundations, …) come to find each other.

At least as significantly, they want to help create the ecosystem that will support that market.  Today’s stock markets could not function without the supporting players within their own ecosystems - including ratings agencies like Moody’s, regulatory bodies like the SEC, and information providers like Bloomberg.

Along those lines, Mission Markets has brought together these organizations, which are impressive enough individually - but collectively, they can be the foundation for a thriving social marketplace:

• Ethical Markets: http://www.ethicalmarkets.com/
• B-Corp: http://www.bcorporation.net/
• 10 percent solution: http://www.10percentsolution.com/
• Mission Markets: https://www.missionmarkets.com/
• socialmarkets: (’nuf said

We are excited about both the journey to the new social capital marketplace, and the new partners along for the ride… more on this adventure as it unfolds!

Well, both Interesting NY and SoCap08 are behind us now, and I am happy to report that both conferences were phenomenal successes - in general, and especially for socialmarkets!

The Interesting NY conference definitely lived up to its name.  The topics were all over the place, and the speakers had all kinds of backgrounds, but the end product was a full day of genuinely interesting presentations.  Since this was a general audience, our presentation was socialmarkets 101 - including a primer defining the “social capital markets”.

This was not necessary at the later conference with that exact name: “Social Capital Markets - 2008″.  Naturally, this crowd was already up the social capital learning curve, so we were able to get much deeper into the belly of the socialmarkets beast.

We had the luxury of a full hour of conference time to ourselves, and made the most of it.  The SoCap peeps were pushing hard to make this conference an interactive experience instead of just a lecture, so we left plenty of time for audience participation.

Here’s a pic of me speaking at SoCap… Allan is behind the camera:

Me addressing my fellow social capitalists

We spent about half the time explaining the whys, whats and hows of socialmarkets, and then opened up the floor for Q&A.  I was actually a little nervous about this part, since you never know if people are going to be interested enough to join the conversation (especially since we were the last talk before the lunch break…)

Turns out there was nothing to worry about.  The Q&A turned into an energetic discussion of social markets and the metrics which drive it (e.g. SROI) and for most of the time we did little more than referee!

That conversation spilled over into lunch, dinner, the rest of the conference, and in fact are still going on now - over one week and 3,000 miles later.  We learned a lot in these discussions, and perhaps even more importantly, made a lot of critical contacts with others in the social capital space.

I’ll save the details on the long-term impacts of SoCap08 for another post.  For now, I’ll just say that socialmarkets made not just new friends, but new strategic partners there.  I think these relationships will help see not just our venture succeed, but also the complementary ventures that will form the ecosystem to support the entire social capital marketplace.

Sometimes we get so caught up in sweating the details of bringing socialmarkets to life, we forget about the bigger picture. We know our work is an important step towards advancing the social capital model, but once in a while it’s encouraging to see that socialmarkets is just one piece of the puzzle, and that we are by no means alone in this effort. Last week we had the opportunity to get a glimpse of that bigger picture, and we liked what we saw.

Allan and I were invited to a discussion group on The Social Capital Marketplace (SCM) here in NYC. It was a small gathering - just a dozen or so people hosted by GivingNet, powerful proponents of SCM (as well as our fiscal sponsors.) While the group was small, it included a good cross-section of the market, from the supply side (e.g. donor advisors) to the demand side (e.g. nonprofit advocates) and the spaces between them (e.g. socialmarkets.) Everyone brought something special to the table, and the discussions which took place around it were animated, unscripted and best of all, highly educational. I may go into details in a later post, but for now I’ll focus on just one general idea: how social capital markets are gearing up for growth right now.

There are more wealthy people than ever pouring more money than ever into the nonprofit sector. This statistic is a mixed bag, since this new wealth is hardly democratic. As the rich are getting richer, the wealth divide is getting larger. However, as the invisible hand of the capital market moves us further into economic inequality, the social capital market offers a counter-balance. The inclination of the wealthy to “give back”, and in particular the “giving while living” trend offers new inputs to SCM. Gates and Buffett are setting good examples, but they’re really just the tip of the iceberg. Also, it’s not just the quantity of new philanthropists, it’s the quality: many if not most of them come from the quant-based worlds of finance and technology, so are receptive to the market approach of SCM. Here are a few of the creative ways that receptivity is being exercised:

• Knowledge is power

Several efforts (including ours) attempt to bring transparency and accountability to the market by doing more due diligence on nonprofits. There is very little information available for most nonprofits beyond IRS Form 990, which offers no insight on function and impact. Ultimately these efforts can produce complete ratings and analysis functions, offering potential social capital investors the chance to make more informed decisions. The functionality is like Moody’s, but the Web 2.0 model makes it more like a cross between Kiva and TripAdvisor.

• Behind the buzzwords

Terms like Social Entrepreneurship and Venture Philanthropy are so over-used that we forget the powerful ideas behind them. There are many current projects which recognize that social vs. economic capital is not a black and white issue. Inside the gray area between, there is plenty of room for deriving economic profits from social services. A little flexibility on the size and time frames for those profits can go a long way towards directing real money into social markets.

• Bottomless bottom lines

Once you broaden your definition of ‘profit’ to include non-economic criteria, the sky’s the limit. Double bottom line accounting, which adds social returns into the equation, allows for a more complete picture of what defines a successful business. This is where other often abused buzzwords like Socially Responsible Investing and Corporate Social Responsibility show their true power. When your only bottom line is economic, you’re shut out of several alternative (and arguably larger) economies, including the human, social, environmental and spiritual. At some point we should probably stop counting (triple and quadruple bottom lines are common, and I even found a quintuplet here) but the bottom line is that there is more than just one bottom line.

This is just a taste of what is happening in the SCM space, and it was all the more tasty because we got to meet the people behind the projects. We try to keep up with the literature, but you can get so much more out of face-to-face interactions with the people who share your goals- especially if those people are smart, committed and open to sharing. I think we all left that conference room a little wiser, and a little more energized. Socialmarkets is a web-based operation, so we spend a lot of our time in virtual spaces. Once in a while it’s awfully nice to check in with the real world.