Investors Are Seeking Social and Financial Returns

This is a guest post from Kevin Jones, who is a Founder and Principle at Good Capital, and Xigi Media. Xigi (ZIG-ee) is putting on the Social Capital Markets 2008 Conference to bring together all of the people and organizations with a similar deep passion to change the world through sustainable businesses.

The Social Capital Movement Has Begun

The movement to use the power of the market to help people lift people out of poverty that first reached broad public awareness when microfinance pioneer Muhammad Yunus won the Nobel Prize is reaching an inflection point. Moving beyond small loans to groups of women, the movement to use innovative business approaches to social problems is suddenly reaching critical mass, and the leading players in the world, such as Google.org, the Federal Reserve, and The Economist, are convening at an event that is at the intersection of money and meaning.

Mixing the Approaches of Venture Capital and Foundations, Non-Profits

The evidence that there is a new wave of investing, the proof that people are asking for impact along with risk and return is happening can perhaps best be shown by the explosion of social venture funds themselves. From Austin to San Francisco to Johannesburg to Rio, to London, people are finding investors ready to respond to a an approaches that mixes traditional highly engaged venture capital investing targeting problems that used to be only within the sights of foundations and non profits.

Based on my conversations with other funds like ours at Good Capital, I think it may be safe to say that more than half a billion dollars is being raised worldwide from investors who are pioneering a new asset class that draws from philanthropy as much as it does from Wall Street.

I'm having those conversations because most of those new funds are coming a conference in San Francisco where, by standing together and providing context for each other, we can both validate the reality and accelerate the growth of this new social capital market.

A Global Solution

Some of these new style socially minded venture funds based in South Africa, Uganda and Ethiopia and are run by black Africans. Other new funds that return capital to investors while creating scalable social impact are coming from New York, as well as from Thailand, Brazil, Uganda, the UK and Denmark and from across the U.S.

These funds are investing in companies using information technology to erase communication and financial divides or startups creating new kinds of microinsurance that's affordable to the poor, other investments are going to expanding renewable energy into the developing world or making Fair Trade mainstream here in the U.S.

Not Just Your Average Investors

Along with these innovative new sources of capital from around the world -- the new breed of social venture funds, the conference is attracting their partners, from the big investment banks, foundations, angel investors, and even international development agencies. Because the fact is, there is not enough money in foundations or in the donations people give or in any government to meet the challenges that are facing the world. It takes all the resources we have, including our investment dollars to answer the call of the planet and it’s people.

Part movement and part emerging market, the collective goal of the people coming together in October is to show the world that you can use the market to make a difference and make a financial return. And by their collective presence, they want to demonstrate that this new social capital market is real, that it's big, that it's growing and that it’s time to get involved. For the sake of your portfolio and for the sake of the world.

Xigi (ZIG-ee) Media, of which Jones is a founder, is putting on the Social Capital Markets 08 Conference on October 13-15 in San Francisco to bring together all of the people and organizations with a similar deep passion to change the world through sustainable businesses.

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