• Raising capital through impact investing

    By Editor of SocialBusiness.org

    Social Business has attended two of SocialFinance.ca’s major conferences, the Social Finance Forum. In 2011, when I attended, the theme was significantly centered around impact investing. One piece of literature that was given out in conjunction with the conference was called “A New Tool for Scaling Impact: How Social Impact Bonds Can Mobilize Private Capital to Advance Social Good,” created by Social Finance, Inc. The summary stated:

     Today nonprofits have a new source of capital to scale evidence-based interventions: Social Impact Bonds (SIBs). Aligning the interests of nonprofit service providers, private investors, and governments, SIBs raise private investment capital to fund prevention and early intervention programs that reduce the need for expensive crisis responses and safety-net services. The government repays investors only if the interventions improve social outcomes, such as reducing homelessness or the number of repeat offenders in the criminal justice system. If improved outcomes are not achieved, the government is not required to repay the investors, thereby transferring the risk of funding prevention services to the private sector and ensuring accountability for taxpayer money.

     While SIBs are not a panacea, they might provide a unique way to make effective interventions available to far more people in need than the number that can be reached through traditional state contracts and philanthropy. The best candidates for SIB funding are nonprofits with strong track records of improving outcomes for a well-defined target population. These outcomes translate into government savings that can be achieved within a relatively short time frame and are large enough to cover the program’s cost and a reasonable return to investors.

     Social impact bonds (SIBs) are also known as “pay-for-success” bonds and contain characteristics similar to equity and debt, despite the name bond. The problem to be solved, if you will, is that charities and registered non-profits don’t receive the necessary long-term funding in order to be able to increase and innovate their services. In the Winter 2013 issue, Sasha Dichter, Robert Katz, Harvey Koh and Ashish Karamchandani wrote a piece for the Stanford Social Innovation Review (SSIR) on impact investing called “Closing the Pioneer Gap.” Here, the problem is the following: “More money than ever is flowing into impact investing, yet many entrepreneurs creating companies that serve the poor still find it difficult to raise capital, particularly at the early stages of their company’s growth.” Money from philanthropy and prizes can only get most social entrepreneurs so far, maybe through the seed stage of business development but the long-term and ongoing part is left by the wayside. “A broad definition of impact investing is in many ways appropriate because nearly all of this capital has the potential to create positive impacts on society,” Dichter, Katz, Koh and Karamchandani wrote. “But a broad definition also masks the fact that most funds—even those that talk about fighting poverty—bypass the more difficult, longer-term, and less financially lucrative investments that directly benefit the poor, and instead gravitate toward the easier, quicker, and more financially lucrative opportunities that target broader segments of society.” According to the article, only a few impact investing funds actually invest in “high risks and low- to mid-single digit annual returns,” which is essentially what defines these types of markets. Amidst it all, however, there seems to be a notion that as long as we recognize that there’s a long way to go, then we can develop impact investing, and thus, the strength of social businesses, through focusing on talent, infrastructure and solid business models. Dichter, Katz, Koh and Karamchandani close with a touch of optimism:

    Impact investing has come far as a sector. Just a decade ago, the notion that philanthropy could be used for investment was unheard of. The idea that direct grants to a for-profit company could be a mainstream strategy to fight poverty would have seemed absurd. The idea that pursuing social impact could be incorporated in an investing strategy—whether in public or private markets—was seen as a fringe notion. So much has become mainstream, so much more is possible, but only if we realize that we are just at the beginning.

  • Social business and mentorship

    By Editor of SocialBusiness.org

    The social entrepreneurship community — especially online — is intensely tight-knit. On Twitter, Facebook and email, there are copious amounts of exclamation points and thank yous, however genuine.  Pascal Finette recently wrote a piece called “Get Yourself a Mentor… Maybe Two” for the Unreasonable Institute. In it, he writes:

    Intuitively we all know that having a good support network of smart people around us will make us stronger, help us make the right decisions, allow us to see things from a different perspective, and pull us through those inevitable dark moments of being an entrepreneur. Leaders often don’t tend to talk about their respective mentors – but you can almost guarantee that any well-known (and less well-known) successful leader has a roster of other people they trust and rely on. When they do talk about their mentors, it’s often with a voice filled with admiration, passion, and love.

    A good mentor will become your mirror. The person you can be vulnerable with, who holds you up, cheers you on, tells you off when you do something stupid, and generally makes you a better person. And often they are friends for life.

    Interestingly a lot of young leaders don’t have a mentor. It is not due to lack of mentors, or a mentor’s unwillingness to work with people who haven’t cut their teeth in the world of business and entrepreneurship yet. It is because young entrepreneurs don’t ask. Often they think they either know the answer (they generally don’t), don’t want to be perceived as weak and vunerable (a misconception of leadership), or don’t have the guts to ask. Don’t be that kind of leader. You owe it to your idea, your employees, your customers.

    Interestingly, however, I have interviewed a few social entrepreneurs who haven’t been so optimistic about the value of mentorship. Sometimes it seems like more of a rite of passage than an actual source of knowledge and progress and social entrepreneurship. But for many, a mentorship is a valuable process for both or all parties involved. What is more, a traditional or more formal mentorship program is not always the most valuable. After interviewing dozens of social entrepreneurs at all stages of their career, many of them attest to being involved in less formal mentorship activities. For instance, maybe they seek out a friend for advice here and there. Many people also have found advice  through social media and people they’ve only met online. That can prove valuable since it’s sometimes a new relationship and thus, you and your social business gets the advantage of a fresh set of eyes. Have you had any fulfilling mentorship experiences? Or perhaps any horror stories?

  • Rethinking CSR

    By Editor of SocialBusiness.org

    I never went to business school, which is why, my first thought after reading Sandra Waddock’s “Hollow Men at the Helm” article was, “Oh, this doesn’t apply to me. I studied international development student.” But it’s this kind of thinking that has left us all shifting the responsibility to others – either the government, business, social enterprises or NGOs. Although not a business student, I work with social businesses. A common definition of a social business is a company that follows business principles, but a company that is dedicated to working toward solving a social issue. All profits are put back into the company in order to create a sustainable business that doesn’t accept donations. While doing my B.A. at McGill, I spent learning not so much about “integrity” as Waddock refers to it, but more so about social and environmental awareness. Of course, I believed in similar things like equity (not simply equality) and social good long before I started my undergrad, but my ideas and beliefs have become not only stronger, but more my own. I’ve known many students who have studied management, business and/or commerce at school, but it’s safe to say that we have had a fundamentally different educational experience. While I’m a cynic about something like CSR, those who I have met who studied business in school are more optimistic about it. Published in the Globe and Mail, Konrad Yakabuski’s article, “The Kindness of Corporations,” really explored what I feel, for the most part, about CSR. I have been taught to see right through greenwashing and I am critical about many charities — international, domestic and local — not because I don’t care but because I know that most “aid” goes to paying for flights, salaries and the like. Most CSR is an attempt to sell more products by getting the consumer to think that the company is doing good – or even better, by getting the consumer to think that they themselves are doing good.

  • For us, buy us: women, consumerism and social change

    By Editor of SocialBusiness.org

    Due to the nature of my current projects for Social Business, I have been thinking quite a bit about women’s position and role in and round social entrepreneurship. This blog post more generally spans a greater trend, that is, women as consumers and creators of consumer products. Women shop. There have even countless studies about women and their viability as a marketing demographic.

     In North America, we are exposed to a plethora of images, ads, media and messaging. A lot of it is directed at women. Buy this lipstick. Buy these diapers for your baby. This cleaning product is safest for your family. Lose weight by incorporating probiotics and antioxidants into your diet. How, then, do social entrepreneurship and consumerism (and advertising for consumerism) fit into the picture? (I’ve written more thoroughly about “The problems with so-called ‘conscious consumerism'” in the past if you’re interested to read that.) Clayton Reeves for Gaebler Ventures writes more positively about of consumerism “as a movement” and offers the following advice for entrepreneurs: A holistic approach that can avoid any of the common pitfalls of unethical marketing can save your company the hassle of dealing with customer complaints. Also, having a happy customer base will only create more growth opportunities for the company.

    So, ignore trends in consumerism at your own peril. It’s a phenomenon that can impact your organization’s bottomline profits – for better or worse depending on your response.

     Of course, what I’m saying nothing new in the grand scheme of things. But what I’m interested in is how social business captures this kind of messaging. Do they? Does it work? What are the implications? Many social good products are targeted at women.

     In social entrepreneurship, there’s more to it than mere advertising and messaging. Gender is often built into the business model itself. And most often with those darn good intentions in mind. For Canadian social entrepreneur Barb Stegemann, her mission and means by which she seeks making it happen are explicit. Her aim through her social business The 7 Virtues is to harness North American women’s buying power in order to foster social change in less-industrialized countries. The idea for her business sprouted from her book, The 7 Virtues of a Philosopher Queen. In the United Kingdom, “Social enterprises are a natural home for female entrepreneurs and have more women on their boards than FTSE 100 companies. A quarter of social enterprises are owned by women, almost double the number of those running small private businesses,” according to Social Enterprise UK. Here is what I’ve been hinting at all along when it comes to the proliferation of women-focused for-profit social good products: are women more giving? Or just better shoppers? And perhaps more interestingly, does it matter? Certainly probably not to the social businesses profiting (socially and financially). But it says something about the rest of us and the state of buying to give.

  • Women in social entrepreneurship

    By Editor of SocialBusiness.org

    The worlds of business and entrepreneurship, like most worlds or the world, are exclusionary for women. Women find it harder to advance in business and in entrepreneurship, harder to find resources and financial support. What do we make of programs like Young Female Entrepreneurs and Girls Who Code? What are the impacts of these types of support systems, programs and women-only incubators? One question I have, as someone who has been writing about social businesses for over two years is this: are there more women or men starting social businesses? SocialBusiness.org is working on an ebook about women who have started their own social businesses and certainly, there are many in a breadth of different industries. Some of them cite their gender as a problem and some do not. It’s possible also that some may not be able to discern any disadvantages they may have had as women, that is, the relationship may not be visible. I struggle with the desire to represent women and their efforts but not consider “women” as a genre in itself. In a similar vein, a New York City music artist, Le1F, recently gave an interview to the Toronto-based weekly newspaper, Now Magazine and said that “queer rap” isn’t a genre even if he is indeed a queer rapper. Women-only art shows are common as well. But more than that, are they necessary toward creating a more equal society? So while marginalized groups need exposure because of the dominance of men in a lot of industries, is there another way to group people, as critics and writers tend to do? A way that validates the work they do in and of itself? We seem to think it’s okay to target people in less-industrialized countries on the basis of their gender. Solar Sister, which works in sub-Saharan Africa, and Skateistan, which works in Kabul, Afghanistan are two examples of this. And of course, the dual hyper visibility and invisibility of women in the Third World means that there are a slew of studies on how improving the lives of girls and women is the panacea to “development.” Think of the Girl Effect. I’m in no means discrediting this type of research but I wonder what impact this has on women in the industrialized world. What kind of businesses do women start? How do they differ from men? What are the societal improvements that can occur with financially supporting women entrepreneurs over men? Allyson Hewitt wrote an opinion piece for SEE Change magazine on the role of women in social entrepreneurship. I’ll end with her words, which elucidates the challenges and also offers some sense of optimism:

    Are women uniquely positioned to take on these complex leadership challenges? I believe we are, but it won’t be easy. As a student of women’s studies in the 1980s, I really thought so many of our battles had been won, and there is no contesting the fact that significant progress has been made, but every now and then we are struck by reports from journalists, police officers or the judiciary condemning women who are victims of rape or sexual assault. We are reminded that we can’t take anything for granted, that our positions as leaders must continually be earned, that there are many who would ascribe to us a certain role in society – not necessarily a role we see for ourselves.  We need to name these and confront them. We need to take the power that will allow us to redefine success.

    There are many tools and resources available to support social entrepreneurs but there is still a lot to do. We need to create an enabling and regulatory and legislative framework; we need to increase access to capital (from grants to loans and even equity); and we need to promote a world that understands sustainability as having embedded financial, social and environmental components.

  • Attracting social enterprise talent

    By Senior Editor of SocialBusiness.org

    What does the age demographic in your social enterprise look like? Old? Young? Somewhere in between? Perhaps if you’re a young social entrepreneur yourself, you’ve attracted people through your college network and kept the team looking quite like you. And vice versa perhaps. I recently interviewed a powerhouse duo (women) who are running a global social business that’s still very much in start-up phase despite its successes. They—one of them the founder and the other the vice president of business development—argued that sometimes being further along in your career can have an enormous impact on the way you operate your business. I mean, you’ve lived and learned more so that argument is one that exists in any profession. And on the other side, young people supposedly have more energy, vitality and a willingness to try new things. At the end of October, the Stanford Social Innovation Review published a short piece called “Hiring Talent for the Social Enterprise Means Going Young: A Look at the Prospects and Perils of Building the Right Team.” The argument of the article, which was written by David Batstone, a University of San Francisco professor of business management, relies on the assumption that social enterprises are distinct, especially in terms of recruiting talent. Batstone writes:

    Truthfully, just about every social enterprise will turn to a younger staff to some degree. The budget line available for salaries will lead a start up in this direction, but equally significant is the fact that recent university graduates possess the technical and media skills that a social enterprise needs. The most important reason of all, however, is that it is much easier to hardwire strategy and skills into an open, inquiring mind than it is to teach an old dog new tricks. Nowhere in business is this lesson more true than in the world of social enterprise. Learning to “speak” hybrid and “act” hybrid comes with immersion. Think of it as the children of first-generation immigrants. They do not identify themselves as coming from an old world or a new world, but the world of their own making.

    Maybe it’s impossible to say that “such and such” is the right age to hire for a social enterprise, however, what Batstone argues is that establishing a learning culture is what’s key to the progress of a hybrid. Many professionals—young and old—don’t know how to navigate social enterprise right off the bat. Years of experience don’t change that and neither do recent years of school. What’s more important is how talent can work in start-up culture, that is, by themselves and also for themselves.

  • Shutting up and giving

    By Editor of SocialBusiness.org Charity, especially when it comes to monetary donations, is often a one-way act. We give and therefore we can sleep at night. But not everyone puts in the work to see where their money goes? Who does it reach? Who does it exclude? Who is it hurting, if anyone? And how does it get there? The Founder and Chief Consultant of Cornerstone International, LLC, Chad Jordan, recently wrote a piece for Business Fights Poverty called “Shut Up & Give, In search of sustainable solutions to global poverty.” The article explores his hesitancy to see that business and development initiatives could not only work together, but work together well. More interestingly, however, Jordan questions the international development field in which he comes from. Here’s an excerpt from the article, which stems from a Cornerstone book called Shut Up and Give? Eradicating Global Poverty by Breaking the Cycle of Dependency We Created:

    My work has always focused on increasing local capacity in the underserved world, but learning what I did about business as a development tool changed my perspective.  I started asking a lot of questions about the approach I had long ago subscribed to, questions about the way the majority of the West relates to the underserved.  Will I simply shut up & give to the same projects, the same programs, and the same goals?  Or will I examine the results, question the outcomes, and shift my thinking?

    This was a pretty easy decision learning what I did from those who “got it.”  We need to question the way we’ve always done things in regard to poverty eradication.  Tradition doesn’t always translate into meaning the best way.  We don’t need to start over – we need to build on what has been done by adding some new elements.  We need to bring in business principles, financial leaders, and corporate accountability to our development programming.

    The truth is – although I was hesitant to jump aboard – business terminology does belong in our development conversations.  As long as profit doesn’t trump local empowerment and capacity building, there’s nothing wrong with making money while helping people.

    The traditional business focus on evaluating, as Jordan puts it, outcomes is crucial. Both fields need to focus more, I think, on affect — on how people feel and how people feel involved. Affect theory has a recent push in being infected with politics and I think the same could go for business and development, even though development (and social entrepreneurship) is typically seen as a people-focused realm. Jordan’s point, overall, is to be critical, no matter what profession you come from. Be critical of others and be critical of your own and the hybrids in between.

  • Don’t look to your social good job for fulfillment



    By Tiana Reid, Senior Editor of SocialBusiness.org

    Image of Tiffany Persons via Mindvalley

    Last week week iOnPoverty featured Tiffany Persons of the NGO Shine On Sierra Leone. Here’s a bit of what the email shared with its readers:

    When someone asks you why you’re interested in changing the world, is your answer something like: “Because it feels good to do good”? If so, Pathfinder Tiffany Persons, says be careful. “It’s an addiction and no one talks about this.” Her bottom line: filling an internal void with doing good is not okay – it will leave you unhappy in the end and it will negatively impact the people you seek to help. So examine your motives carefully.

    Pathfinder Wanjiru Kamau-Rutenberg said something similar when she noted: “The most useless people in the world are driven by guilt.”

    Jonathan Lewis continued on Huffington Post:

    If you think “doing good” is a recovery program for a deadend career, or a panacea for personal happiness, or a path towards building a personal brand, forget it. As Tiffany notes, “If you don’t find happiness where you are right now, you are going to be unhappy in the social sector.”

    As Levitt and Dubner summed up in SuperFreakonomics, “Most giving is… impure altruism or warm-glow altruism. You give not only because you want to help, but because it makes you look good, or feel good, or perhaps feel less bad.” The same can hold true for casual volunteerism and, all-too-often, for switching from a soulless industry to a mission-driven career.

    At first glance, perhaps, this kind of thinking could seem controversial. But I think that the social enterprise community becomes sanitized into this idea that good is good is good is good. In a lot of ways, it’s not about what you do necessarily but how you do it. Being in the social business or non-profit industry doesn’t necessarily make you a better person.

    I’ve encountered this in the flesh while I was completing my undergraduate degree in Montreal in International Development Studies. The very name of the program, i.e. the “development” part, suggests a sort of ownership about what development means and to whom. The main lens through which development is traditionally looked at is economic, even though many of my brilliant professors do make an effort to remind the students that there simply aren’t enough resources for every country to industrialize like the West has (which feeds into the “West versus the Rest” idea). The field also subscribes to a sense of nationalism that is problematic in many cases and ignores marginalized populations.

    But it was really the students, no, I can’t place blame on the students. Rather, it was (and is) the industry that really rubbed me the wrong way especially after a few years knee-deep in the program. It’s about the language, too, that “go volunteer in an Indian orphanage for four weeks and change lives” type of mentality. While I don’t find anything necessarily wrong with voluntourism, there’s a sense that it’s good no matter what. But like everything, including social good careers, it’ necessary to question the why.

    As always, this is something to think about. My posts on this blog are about being critical, living consciously and challenging the norm. And we all know that we can create micro-norms within our own fields, workplaces and minds.

  • Empathy: it’s all good, right?

    By Tiana Reid, Senior Editor of SocialBusiness.org

    Empathy has been studied seriously since the 1960s as something more than an emotion. It’s an affect, yes, but it has implications for things outside of the personal realm. Social activist and cultural critic bell hooks cultivated an idea of “engaged pedagogy” which centers on the idea of mutual recognization.  “Engaged pedagogy rests on a compassionate premise: to be effective, teachers need to be engaged with students, to nurture not only their classroom performance but their whole well-being: mental, physical, and spiritual,” writes Janet M Lucas in her 2011 dissertation “Not just a feeling anymore: Empathy and the teaching of writing.”

    How empathy works in social businesses may be difficult to assess. After all, it goes back to whether or not intentions matter. But empathy has been and continues to be a hot topic online in the social entrepreneurship world. I’d say it’s pretty much a buzz word by now. Intentionally or not, affect and emotion have always held a premier role in social business. Especially when it comes to companies selling products, it takes emotional marketing and/or a “virtuous” feeling on the part of the consumer, to sell a fair trade, environmental, ethical (etc.) product, considering that it’s usually at a higher price.

    Empathy: it’s all good, right? Well, maybe not. In “The risks of empathy: Interrogating multiculturalism’s gaze,” which was published in Cultural Studies, Megan Boler argues that “passive empathy… falls far short of assuring any basis for social change, and reinscribes a ‘consumptive’ mode of identification with the other.” Consuming the other (or “eating the other” if we look at this again through a bell hooks lens) is already a huge issue in social business. The so-called exotic is sold, bought and traded through goods manufactured (but sometimes not) in the Majority World.

    Last year, Ashoka launched their empathy initiative in which they outlined the following: “Empathy. We don’t hear the term every day, but Ashoka Fellows over the past thirty years have shown time and again that there is no practice more fundamental to the human experience and no skill closer to the heart of what it means to be a changemaker. Its presence–and as profoundly, its absence–can be seen amongst the myriad challenges that populate our daily headlines, whether school bullying, ethnic conflict, crime, or the global preparedness of tomorrow’s workforce.”

    But is it really possible to “identify with another person’s feelings” as Mary Gordon’s Cultivating Empathy describes empathy? How could a straight able-bodied white middle-class North American male identify with the feelings of a poor black lesbian from Zimbabwe? But this isn’t about the Oppression Olympics. Rather, if I go back to Boler, it’s about being active in not consuming identities because claiming to empathize is far different than acknowledging someone’s right for self-determination and ownership.

    To problematize empathy isn’t to disregard it, but rather, it’s to take a look at how promoting empathy can blind being critical, which is crucial, especially in an industry that purports to care.

  • Ways to use social media for social business

    By Tiana Reid, Senior Editor of SocialBusiness.org

     This list is by no means exhaustive, but it can help the small social business owner start up and consider their social media options. The best thing about social media is a low-cost way to spread your message – and meaning – in the way that maximizes productivity. But, yes, it can be time consuming. And that’s time that’s precious for start-up social businesses and enterprises that already have their resources spread thin.

    Canadian entrepreneur Amber Mac was featured on the Lavin Agency’s YouTube channel and she discussed how, for some, social media can be overwhelming. It’s true that even though there’s an immense amount of stuff (What stuff?!) available on our smart phones, laptops and hey, even on our digital wristwatches. Mac notes that there are statistics to prove that many people are less productive in the workplace. “It’s about using the right tools and being smarter,” she said. “You don’t need to live inside Twitter all day long.”

    Remember: be effective and be productive. Don’t waste your time, because in the end, your time is your company’s resources.

    Frame content for distinct platforms

    “Social media” is a broad, broad term that encompasses everything from web-based technologies like blogs to mobile-based technologies like iPhone apps. The list goes on and on, of course. For businesses, it’s important not to lump all of it together. Here are a few tips for creating distinct content among those social media platforms that you do decide is best for you and your social business. For instance, I advise not to cross-post Twitter and Facebook (or any platform!). Twitter is a place where you can tweet 12, even 24 times a day and you won’t necessarily annoy your readership. It’s the norm. But Facebook is a slower paced friend, and its users gravitate toward image-friendly links and albums. So utilize that to the best of your ability.

    Say what you mean

    If you’re doing a mini study on LinkedIn about what you think your customers would like (or not like), ask them straight up! Or maybe even use a platform like Survey Monkey if you think your customer base is strong enough in terms of participation rate. Don’t beat around the bush or undermine the intelligence of your customers.

    Mix it up

    Pictures and links and questions, oh my! These are a few of the things that make social media users click, share and engage. It’s important not to get stuck in a rut of the same old, but rather, make a conscious effort to vary your content. If anything, ask yourself what you’d like to see from a company that you love.

    Use hashtags and participate in Tweet Chats to maximize your reach

    Moving World collected a resource of the top 13 hashtags for social entrepreneurs, enterprises and investors. No need to memorize them, but keep them in mind, especially when prioritizing your messaging.


    Keep an eye out for new social media platforms that are taking off. For instance, while many people jumped on the Pinterest bandwagon, it hasn’t yet completely taken off in the social business world. If you set yourself ahead of the curve, you could reap the benefits. In the case of Pinterest specifically: do you have awesome images of your product and/or service? Consider new platforms and if you think it would work for you but don’t just join and use your time if not.