A New SOCAP Initiative: The Good Capital Project

Posted by on March 13th, 2017

SOCAP is excited to announce a new initiative, The Good Capital Project, launching June 19th, 2017 at an event in New York City. The Good Capital Project (GCP) is an integral step in evolving impact investment from an emerging industry into mainstream practice. Through a new design thinking process, we will convene all constituents to drive greater collaboration and accelerate capital flows into purpose-driven investments. The project will focus on generating innovative and sustainable solutions to align the capital markets with the human needs of tomorrow.

This project is the first initiative of SOCAP’s new partnership with a strategic group of mission aligned impact investors and innovators.

Join us.

Unlock the Potential of the Global Capital Markets

Why aren’t good capital practices mainstream in the global capital markets?

Over the last decade, the sustainable, responsible, and impact investing industry has gained critical momentum. According to a recent Rockefeller Foundation report, the total capital available for positive impact exceeds $287 trillion, while according to Morgan Stanley Institute for Sustainable Investing, only $8.7 trillion is currently allocated. The financial markets need to be prepared for the seismic shift in investor demographics that demand greater alignment of their portfolios with their values. The GCP seeks to unlock this potential and ensure the financial markets become a catalyst for good in the years ahead.

To bring impact investing fully into the mainstream, all constituents must look beyond their sector-specific initiatives and join the effort to solve global challenges with market-based solutions. The Good Capital Project will harness our collective knowledge to change the world.

The Goal of the Good Capital Project

The Good Capital Project (GCP), through a new design thinking process, will convene and leverage expertise from the financial, design, academic, non-profit, governmental and impact communities to drive greater collaboration and accelerate capital flows into purpose driven investments. The GCP will develop common tools, resources and frameworks to align the capital markets with the human needs of tomorrow and produce a cohesive taxonomy and market map to address global challenges through market-based solutions.

The UN Sustainable Development Goals, ESG Metrics, SRI principles, corporate social responsibility, impact investing and philanthropy have provided principles, driven investment and improved corporate governance and sustainability. While each of these valuable approaches are critical threads, a weaving of these threads is required to strengthen and mainstream the industry. The Good Capital Project leverages expertise from the financial, design, academic, non-profit, governmental and impact communities to contribute best practices from existing initiatives to the design of the new fabric of a purpose-driven impact economy.

A Catalyst for Good

Because we firmly believe the financial markets will be a catalyst for good in the years ahead, we have created the Good Capital Project to better serve SOCAP’s mission to convene ideas and capital to catalyze world change

If you are interested in partnering with us or sponsoring the Good Capital Project contact Luc Fagerberg, Director of Corporate Strategy at lfagerberg@socap.group.

Event Details

Date: June 19th, 2017

Location: Convene, Midtown East, 730 Third Avenue, NYC

Get tickets and learn more.

Sources

The Rockefeller Foundation, Situating the Next Generation of Impact Measurement and Evaluation for Impact Investing, 2016

Morgan Stanley Institute for Sustainable Investing, Sustainable Signals: The Asset Manager Perspective, 2016

 

5 Ways to Be a Clean Money Revolutionary in 2017

Posted by on February 24th, 2017

A SOCAP Guest Post by Joel Solomon

My first book, The Clean Money Revolution, is coming out in May. So, you may be asking, what is clean money? 

Clean Money is money aligned with purpose: money that is about more than self-interest; money that prioritizes the commons; money that makes the world better. Clean money regenerates ecosystems, builds fairness and equity for people, and helps achieve a healthy balance between people and planet.

Clean Money is revolutionary, and it’s also evolutionary. It expands our view of finance from a bank balance, or net worth calculation, or the name of a company you own stock in.

Clean Money builds true security and real prosperity, based on long-term thinking, and a safe, fair resilient future.

Clean Money considers where materials came from, who assembled them, and whether that process was just, regenerative, or destructive. From there, choices can be made. Choices that factor in the future of civilization.

We are in the midst of a great economic shift. It is a time of big challenges but also huge potential. The clean money revolution is the biggest opportunity for making money in history. Reinventing how we steward resources, feed, house, educate, transport, keep healthy, and employ humanity, while protecting natural systems, and the biosphere, are the prosperity drivers that can give us 500 more years of generative civilization.

This revolution can be peaceful, joyous, and smart. You will make it real.

5 Clean Money Practices

1. Invest as if lives depend on you.

Because they do. Be proactive. Research options. Socially Responsible Investing (SRI): screening global stocks and bonds for “less bad”, is a basic first step. Clean money thinks through where materials came from, who assembled them, and whether that process was just, or unjust, regenerative or destructive.

2. Ask annoying questions.

Wealth managers are seeing the trend. More insistent questions will lead to new products in mutual funds, retirement plans, bank accounts, insurance, and wealth management. Cleaner consumer goods, sourcing policies, environmental regulations, fair pay, and reduced discrimination, will follow.

3. Spend + invest locally.

Strengthen community. Recirculate dollars. Make better jobs. You can choose where you shop. Make choices that align with YOUR values.

4. Agitate, agitate, agitate.

Stand for what you believe in. Research. Get informed. Insist. Model it. Tell your friends. Be courageous. Use your influence. Take risks. Then go further. A movement is well underway, gaining momentum. It’s early. You are a leader.

5. Remember your ancestral responsibilities.

We are all ancestors, bloodline procreators or not. The people of many tomorrows are watching us. They want us to be smart and own responsibility for how we live our lives, what we consume, who we disadvantage, how we participate as citizens, and how our actions contribute to a safer, more loving, more just future.

Transitioning to clean money is no dutiful, painful exercise in morality. It is inspiring, invigorating, satisfying, life-enhancing. It gives meaning, purpose, and personal agency.

That’s what I mean by the Clean Money Revolution.

See you there.

Joel Solomon will be hosting the SOCAP 365 event “Capital Shifts for a Regenerative Economy: A Holistic Approach to Trends & Opportunities” at Impact Hub Berkeley on Thursday, March 2, 2017 from 7:00 PM to 8:30 PM. Join Joel and a panel of leading thinkers and practitioners to discuss coming shifts in capital and how a “clean money revolution” might help us build a regenerative economic system that works for all. Learn more and get your tickets here.

 


 

Joel Solomon is Co-Founder and Chair of Renewal Funds, Canada’s largest mission venture capital firm, with $98MM under management. Renewal Funds invests in Organics and Envirotech.

With Founder + Funder Carol Newell, Joel implemented a “whole portfolio activation to mission” strategy as leader of her “activist family office”. As ED of the Endswell Foundation they spent down a $20M endowment, leaving Tides Canada Foundation and Hollyhock as legacy charities while supporting BC’s renowned environmental community. As CEO of Renewal Partners’ seed capital fund over $10M was placed into dozens of green companies.

SOCAP Conversations: Martin Burt on the Poverty Stoplight Approach to Ending Poverty

Posted by on February 7th, 2017

Martin Burt represented Poverty Stoplight at the SOCAP 365 event “Welcome Party: Poverty Stoplight comes to Washington, D.C.” on Friday, February 10. We were able to talk with Martin prior to the event.

Poverty Stoplight is working to eliminate poverty, household by household, in countries around the world. They do that by talking directly to people who are living in poverty conditions. They’ve developed a measurement tool and a methodology that helps impoverished families map their needs so they can navigate a way out. Since its inception in 2011, Poverty Stoplight has helped thousands upon thousands of families lift themselves out of poverty globally, from Paraguay, where the program started, to 25 countries including South Africa, Taiwan, Ecuador, UK, Tanzania, Nigeria and the U.S. (in New Orleans, Louisiana).

We talked to Martin Burt, founder of Poverty Stoplight and the NGO Fundación Paraguaya about his innovative “bottom up” approach to ending poverty around the world.

SOCAP: How does the Poverty Stoplight approach to eliminating poverty differ from other organizations with the same goal?

Martin Burt: Poverty is multidimensional. By looking at poverty beyond income you can find many additional solutions. Poverty Stoplight is a new measurement tool that helps people self diagnose their level of poverty, across 50 indicators. That is 50% of the work. Poverty Stoplight also allows people to convert that diagnosis into a family action plan. The unit of analysis is not the individual, but rather the household. So you have a bottom up approach to self diagnosis (that involves) taking stock of what you are good at and what you are lacking. It is a self awareness approach that is quite empowering.

The difference between Poverty Stoplight and other approaches that are out there is that it is not a poverty index, but a dashboard. It is not an aggregation of data, but a disaggregation. The information can be aggregated to analyze the data, but the prime decision maker here is not the head of a welfare agency, but the head of the household. What you have here is a survey that is not extractive. It is not that somebody goes to the house and sucks the information away, the person is doing her own survey–compiling data for herself and developing a dashboard that can help her prioritize her actions.

Can you give an example of how the measurement process works at the household level?

The head of a household, either at home or in the workplace, fills out the survey using a computer or tablet. At the end of that 20 minute visual survey you get your own dashboard which gives you an idea of where you are in everything: weight, income, housing, transportation, violence, self esteem, family budget, financial health…etc. The dashboard shows each indicator as red (extreme poverty), yellow (poverty) or green (not poverty) for the entire household. If the adult has a child, the adult cannot overcome poverty without the child being well taken care of and vice versa. You cannot get a child out of poverty if the mother is chronically unemployed.

Your solution is also described as a coaching methodology. Does a mentor work with the head of household to develop their plan to get out of poverty?

Yes. Once the person sees their dashboard, then the program facilitator, who could be a social worker or the head of HR in the company, helps them to identify the top three priorities they want to address. Usually the solutions are locally applicable. Every country has its own way to get wheelchairs or to fix teeth. People are sometimes not aware of those solutions or don’t know where to start. So we have a coaching methodology that is based on helping people answer two questions: Is it worth it? and Can I do it?

Is it worth it? has to do with motivation. Can I do it? has to do with skills. So they develop some practices for motivation and skill building in order to help lift themselves up out of poverty. We also use peer pressure, group support, prizes and incentives. It’s a holistic approach, based on a concerted effort.

What opened your eyes to the need for people who are living in poverty to be asked to participate in the measurement process and to speak to what outcome they want for themselves?

We started with a microfinance program here in Paraguay. We saw that some people actually overcame poverty very easily and some people, despite financial assistance, did not. So we started consulting with them to ask, what does it mean not to be poor? So we defined locally what it means for people not to be poor or for people to be ok. They very quickly helped us define the 50 indicators and what the thresholds are.

Everybody in the UK or in the U.S. or in Spain or South Africa knows what it means not to be poor on income, which is the easy one, or in transportation or in housing. Once you have local definitions of what it means to be ok, then people can relate and say, I can do that.

No one is poor in everything. Like (the idea) in Anna Karenina, (that) all happy families are alike but each unhappy family is unhappy in their own way, every poor person is poor in their own way. That has to be respected. The overcoming of poverty (should be) a personal commitment with the support of society.

Where do you see the future of the program going?

I think that today’s technology allows poor families to take over and control their situation. Before there used to be paper files, which would have made that impossible. But the internet and increased digital capacity allows poor families to self diagnose and come up with their action plan, really take control of their situation and take advantage of all the services that are available. It is meeting supply and demand, but from the demand point of view. It is not like the hospital wanting to know who needs health services, but the patient wanting to know what type of services are available for her.

We are interested in starting a pilot program in DC to adapt the poverty indicators to what it means not to be poor in DC, what is the standard that families living in poverty aspire to, locally. We’ll be working with the community to find out what kinds of local solutions there are. Usually there are solutions, but the people in poverty don’t see them.

What is inspiring you most in your work right now? What is giving you hope for the future?

We are doing two types of competitions. In one students are competing to see who can get their parents out of poverty first. Engaging high school students to measure their family’s well being and convince the parents to overcome whatever problems they are having, is really turning youth into great assets. Another type of competition empowers poor families to help other families get out of poverty. So working with poor communities: with workers in companies (our biggest client here in Paraguay is a supermarket with 7000 employees–so that is 7000 families), with students, and with poor families helping other poor families.

It is not about the war on poverty, as defined by the top. It is victory over poverties as defined by each family. We use the words “poverty elimination” because it is the process of going from red or yellow in an indicator to green. Each family self defines when they are green, when they can move that little sticker in their dashboard to green, in each category. So we are results and impact focused.

Visit PovertyStoplight.org to learn more.

Martin Burt is the Founder of Fundación Paraguaya (the Paraguayan Foundation for Cooperation and Development) and Poverty Stoplight. He is a pioneer in applying microfinance, microfranchise, youth entrepreneurship, and financial literacy methodologies to address chronic poverty. Burt has been honored with the 2016 Latin American Entrepreneur of the Year Award, the Microfinance Award from the Inter-American Development Bank, the Outstanding Social Entrepreneur Award from the Schwab Foundation, the Skoll Foundation Social Entrepreneur Award, the Ashoka Changemakers Award, the Oikocredit Award, the Templeton Freedom Award, and the distinguished alumni Award from the George Washington University and University of the Pacific, among other distinctions. He is an Avina Foundation leader and a Synergos and Eisenhower Fellow. He has published books on economics, development, municipal government, poetry, and education.

Impact Investing for the 99%: A New Path to Mainstreaming

Posted by on February 3rd, 2017

A SOCAP Guest Post by Joshua Levin of OpenInvest

All investments have impact. But to-date, impact investing has been largely limited to small, private companies, and accessible only to accredited investors. What if it were possible for normal folks to easily allocate their retirement portfolios in such a way that maximized the impact of their investments on issues they care about – e.g. climate change, gun control, gender diversity, etc? Such an innovation would unlock vast amounts of capital and consciousness, catalyzing the true mainstreaming of impact investing.

Individual investors are currently being left out of powerful movement. In public equities, over US $1 Trillion has moved into Socially Responsible Investing (SRI) strategies annually over the last 5 years [1]. Yet only a small fraction appears to be owned by retail investors. This despite the fact that according to Morgan Stanley, over 70% of individual investors now say they want their money to align with their values [2]. Given this chasm in even the most liquid and marketable asset classes, small wonder that impact investors have focused instead on getting big checks from Limited Partners (LPs).

But this “missing retail” segment – the amount of SRI assets individuals should hold if responsible investing had the same proportional ownership structure as the normal stock market – represents an approximate $3.6 Trillion opportunity in the U.S. alone.

Here’s how we can close the gap:

The first blockage to mainstreaming is lack of awareness. Most financial intermediaries have stood as a roadblock, with some statistics saying fewer than 10% of advisors, for example, are highly interested in sustainable investing solutions [3]. There is certainly no shortage of sustainable fund options and other tools for investors to start driving change. But the incentives of the Wall Street food chain generally militate against transparency and customization. Rather, they promote a “leave it to the experts” mentality, so that they can continue to sell preset portfolios that protect their margins.

Fortunately, technology makes it possible to dis-intermediate agents who are standing in the way, and to customize portfolios that invest in companies whose impact is consistent with each person’s values. This is our approach at OpenInvest. By bypassing the entire “fund” model and algorithmically constructing each user’s portfolio, investing once again becomes personal, transparent, and impactful. Users can now fully customize their investment portfolios and retirement accounts to support the things they care about.

But this is just the beginning. By vertically integrating and replacing middlemen with computing power, individual investors can now take new actions any time they want – in response to real-world events – while their portfolios always stay balanced and tracking the market. They can have full transparency into what they own, they can vote in their own shareholder resolutions, and they can see rigorous reporting of their real-time social and environmental impacts.

To mainstream, we need to make responsible investing easy, visceral, and social. That requires advanced technology, but then translating that technology into user experience. We can’t claim to have fully cracked that nut, but we’re making sufficient strides. OpenInvest has experienced nearly 20% week-over-week growth since our launch at SOCAP16 in September. It’s clear that the demand for impact investing is real and all around us.

Innovating in public equities is the obvious first step to engaging individual, unaccredited investors. But it’s also the way to build a sufficient demand pipeline to incentivize the impact investing community to open up. Starting this year, we will begin swapping out pieces of portfolios with alternative, impact investing products that we know users care about.

There are already impact products in the retail market – from new crowdfunding equity platforms to Calvert Community Notes. But for the motivated individuals who buy these, what does it mean for their diversification? Are you overweight solar, Indonesia, your local community? We believe the key to liberating unaccredited impact investors is to start from the top-down, with a fully balanced responsible portfolio. We can then offer to replace slices with deeper impact products, while always maintaining portfolio-level diversification. As such, we welcome partners from the SOCAP community to help get products onto our platform for our growing base.

To be clear: retail investors of the future will enjoy similar performance and diversification as their parents. But their holdings will cut across impact asset classes, as they see and feel where their money is going and how they are shaping the world every day.

Following Trump’s election and his subsequent actions, there’s more demand than ever to find new channels to drive change. Yet while they picket in the streets and write monologues on Facebook, individuals are letting their most powerful weapon – their assets – collect dust. The key is to start by giving public markets back to the public. Then we can create a pipeline of capital to help scale impact investing, while in turn restructuring personal portfolios to truly engage our communities and the world. Through a combination of technology and psychology, we now have the tools to democratize capital. Let’s cross that tipping point together.


Article sources:

1) US SIF 2016

2) Morgan Stanley Institute for Sustainable Investing

3) http://images.mscomm.morningstar.com/Web/MorningstarInc/%7Bf98afe5a-61b5-4b70-847f-54b8c3aa4788%7D_Morningstar-Mag_ESG_decjan16_Hale.pdf

SOCAP 365: Join Us in Conversation Year-Round

Posted by on January 27th, 2017

By: Liz Maxwell, SOCAP 365 Product Manager

The world is very different since we gathered last September. Global markets will continue to be shaped by shifting political landscapes, at what feels distinctly like the beginning of a new era.

At SOCAP, we believe in cross-sector collaboration. We believe that diversity is a strength, that differing perspectives are valuable, and that the inclusion of broad voices is mandatory for meaningful dialogue. We know that market systems are dynamic and complex, and that sustained impact can only be built collectively over time.

In 2016, we launched the SOCAP 365 year-round event series. The intention is to convene the SOCAP community throughout the year in multiple locations. Our goal is to meet you where you are, dive deep locally, and build stronger regional alliances to support the continued growth of impact investing – both as a value-driven methodology and a strong community of practice.

 

SOCAP 365 Events in February and March

Here are immediate opportunities to join us at the first five SOCAP 365 events in 2017:

 
Additional events will be announced on a rolling basis; update your location here to receive invitations throughout the year to events happening near you.

In these changing times, we must gather. We must stay connected, remain committed to the work at hand, and remember the power we have to build strong alliances and global movements together.