Amidst a free-falling roller coaster global economy, social capital is an encouraging bright spot. While traditional profit-driven capitalism has come into question, the social capital movement is budding, striving to do good and make money at once, shattering the traditional for-profit, non-profit dichotomy. I was a relative newbie at the first Social Capital Markets Conference (SoCap08) which took place last month in San Francisco and want to relay the encouraging vibe.
SoCap08′s tagline refers to the “intersection of money and meaning” where “doing well and doing good is the mantra of a new generation of entrepreneurs and the organizations that invest in them.” For so long, for-profits have been efficient and scaled but potentially evil (i.e. focused on profit at all costs) and non-profits have been benevolent but inefficient and underfunded. At last we are seeing more and more successful social enterprises that can turn a profit and maximize social impact at once. Companies are adopting social missions alongside their profit-maximizing goals. The Journal of Private Equity ran an article, which lists Whole Foods, IKEA, Starbucks, Stonyfield Farm, Tom’s of Maine, Patagonia, and Newman’s Own as just a few of the “pioneering” socially responsible companies leading the space.
Kevin Jones, partner at Good Capital and SoCap08 producer, pointed out the fortuitous timing as well as the gathering momentum that the conference represented. Conference organizers expected 300 attendees. But over 600 registered; 50% did so in the last 3 weeks leading up to the event, which are some of the worst weeks in global investing history. People flocked from all corners of the world to attend, which is the most basic indicator of the excitement, energy and dedication gathering around the movement. Perhaps the meltdown really catalyzed this convergence. As the Skoll Foundation blog notes “Many see the financial meltdown as a unique opportunity to promote the idea of social capital markets and double or triple bottom line accounting. The meltdown has revealed the risk associated with profit maximization at all costs.”
One of the big questions of SoCap08 centered on how to make money while having an impact. Microfinance and clean technology are two of the stars of social capital, having shown returns and impact can coexist. And I think with adequate energy and investment, many sectors can blossom and even turn a profit whilst demonstrating social and environmental returns. How can this be? On the social impact side for example, an enterprise that treats employees well – providing healthcare and comprehensive benefits as well as humane working conditions and adequate vacation time – will likely have lower than average absenteeism, turnover and costs from health care claims, all of which lead to cost savings. On the enviro side, the green rush we are seeing is fueled by the promise of cost savings achieved through environmental adjustments, which may include energy savings, resource conservation, and transportation minimization. Organizations that integrate sustainability with their operations will relish savings and enhance profits. Both social and environmental leanings can result in a fatter bottom line.
Finding Value in Values: Social Capital 2008 Preview
Social Capital Markets 2008 Conference: Day One Impressions
Social Capital Markets 2008 Presenter Profile: How HIP are you?
Snails and Leopards: Reflections on SoCap08
Readers, what do you think?
* How do we measure social impact? Luckily many firms are working on this, including my own place of employment, SVT Group.
* What is the best model for maximizing social return on a spectrum of non-profit to profit-maximizing?
[Another version of this piece originally posted to Just Means All Things Reconsidered blog]