Skoll World Forum on Social Entrepreneurship

This year’s Skoll Forum in Oxford at the end of March was about building social capital markets and using the full range of financial mechanisms, from grants to commercial instruments, to support social change. According to Sir Ronald Cohen, Chair of the UK Social Investment Taskforce, who gave the keynote address: ‘What happened in business entrepreneurship over the last 30 years is happening now with social entrepreneurship.’

He talked of the need to measure social return, but, more important, of the need for organizations that can work with capital markets in each country and build the social sector into an asset class. He held up the model of the Local Initiative Support Corporation in the US as an organization that gathers capital and redistributes it. It can do this because it understands both community development and capital markets. Both Bill Drayton of Ashoka and Maximilian Martin of UBS felt that what the sector needed was low transaction costs, low risk and high volume.

Jed Emerson, meanwhile, cautioned against going too fast for fear of undoing what progress had been made and urged the need to recognize that not all non-profits could cope with debt. Another problem several speakers mentioned was assessment of impact. Melissa Berman of Rockefeller Philanthropy Advisors pointed out that, ‘unlike the business world, we don’t have indicators people are comfortable with.’

Another idea discussed was the creation of a social stock exchange. Problems associated with this were liquidity – who sets the price if you want to sell ‘stock’ and on what basis? – and the fact that such an arrangement would inevitably favour NGOs who are producers above advocacy organizations. Matthew Bishop of The Economist felt the whole idea was misguided. In the market, people invest money and know what they’re going to get back. This isn’t true in the social sector. While intermediaries (city analysts, etc) are the most disliked aspect of capitalism, in fact they’re the drivers of capitalism and need to be developed for the social sector.

The Forum also heard from countries where the social sector is less developed. Artur Taevere talked about Charities Foundation, Estonia’s first venture philanthropy fund, while Atis Zakatistovs of the Social Responsibility Forum in Latvia and Olga Alexeeva of CAF agreed that in emerging markets leaders don’t always follow the rules, which makes social entrepreneurship hard to develop. Alexeeva warned that, unless local donors can be induced to invest, social entrepreneurship will remain the ‘fancy toy of foreign aid’.