socially marketing

The social capital marketplace that socialmarkets advocates is a relatively new idea, but is clearly gaining traction - and visibility.

We were delighted to see this article in the Financial Times by Sean Stannard-Stockton (who also runs the excellent blog at Tactical Philanthropy) describing a future where social capital markets are the norm, not the exception, across the nonprofit sector.

His vision offers a model of nonprofit funding that closely mimics today’s for-profit financial markets, perhaps more closely than even we would have guessed. It includes the somewhat hyperbolic story of a nonprofit that defaults on a billion dollar bond issue, shocking the social capital marketplace and tightening credit across the sector.

While such a story may exaggerate the point, it certainly illustrates the potential power of the social capital market model. It also reminds us that such a market is subject to both the rewards and the risks inherent in its successful implementation.

Here are a few more features of this proposed future which resonated particularly strongly with us:

• Turning the tables: Google, IBM and Exxon don’t have to explicitly lobby for investors. There are plenty of third-party agencies offering potential investors both the data they need to make an informed decision and the mechanism to invest once they do. Nonprofits can reap the same benefit from similar tools in their own sector, allowing donation dollars to come looking for them rather than the other way around. Music to our ears, as well as to the legions of nonprofit staff who spend way too much of their time scrambling for financial support.

• Not your father’s marketplace: The social capital marketplace will inevitably differentiate itself from the financial marketplace it is modeled upon, a direct result of the people behind the market. The fortunes being sought by social capitalists go beyond the simple dollars of their finance counterparts, including the human, environmental and spiritual enrichment that defines multi-bottom-line accounting. The common goal of greater social impact will motivate both donors and nonprofits to share their experiences and related information, forming the tight community that keeps the social capital markets humming.

Tags: GivingNet, social capital, tactical philanthropy

This entry was posted on Friday, March 7th, 2008 at 1:46 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.