Getting up to speed on social entrepreneurship


Elaine Smith and Instituto Geracao


Elaine Smith

Not just the Olympics, but all of the fun we’ve had with sports over the vacation makes me think that if we are not prepared for challenges, hurdles and extremes, it is hard to cope with growth, development and progress. You cannot just wish to occupy a strategy position for future success. You need to work your way to it.

Looking at my schedule in the next quarter, I see one subject coming up again and again: social business and social entrepreneurship. In October alone, two very important events will take place.

Firstly, SOCAP12 will be held in San Francisco (USA) from 1 to 4 October. With the idea of creating a market at the intersection of money and meaning, SOCAP is the world’s largest gathering of world-changing entrepreneurs and investors who want their money to make a positive difference.

It’s followed by the Social Enterprise World Forum (SEWF2012) in Rio de Janeiro (Brazil) from 16 to 18 October. Social enterprise pioneer NESsT has been selected as the host of this event, which will focus exclusively on social enterprise and building global awareness of the effectiveness of social enterprise in solving critical social problems.

The discussion about social finance and social business in Brazil is relatively new. Most professionals in the social area focus their work on trying to diminish the social discrepancies in the country through traditional philanthropy or social investments in projects themed in education, arts and culture, sports, environment, etc (this is an abridgment of the tremendous effort of thousands of initiatives, projects, organizations, institutes and foundations). But in a country where entrepreneurship and business development continue to grow, boosted by the positive economic environment, it is only fair to expect investors to emerge too.

An impact investor is defined as one wanting mix of financial return along with positive social and environmental impact. I’ve been following the interest of not only endowment funds but also grant funds, both of which are starting to look at new venture investments as a way to make social change.

This movement will bring interesting things and impact lives. It caught not only my attention, but also that of several organizations.

Founded by a group of business leaders in the late 90s, ICE (Entrepreneurial Citizenship Institute) is a civil society organization whose mission is to engage change leaders in social development. From its first years of working in local development, ICE has seen an opportunity to influence people and organizations from the social business ecosystem to develop new approaches to maximizing positive social impact. To support this change ICE will study ways to mobilize capital and investments to achieve social and environmental benefits.

After studying some of the challenges faced by social finance and social business, ICE will work with different stakeholders to overcome these hurdles, including organizing roundtables to understand impact investing as a new asset class and to build knowledge with the Brazilian financial sector, working with universities to support new curriculum to build the next generation of change agents, and to differentiate social business from traditional business. It will also work with other organizations to study social metrics beyond financial return to measure the social, environment and finance return on investments.

In order to be prepared to participate in this movement, I am reading books and articles, studying social finance structures for seed funding, crowdfunding and social stock exchanges, participating in discussion groups and roundtables, and even watching films and cartoons (yes! I was almost shocked watching a re-run of a 2010 episode of The Simpsons where Lisa decides to donate $50 to support a local business instead of charity, inspired by a online video of Muhammad Yunus on microfinance ). My next read will be Impact Investing – Transforming how we make money while making a difference by Antony Bugg-Levine and Jed Emerson. I don’t want to compare this incredible book to a cartoon, but having completed almost four decades of existence, I’ve only just been introduced to the subject recently, and I feel the urge to learn fast. This was the theme of a cartoon watched by kids and young adults two whole years ago. Of course, I am in a hurry. I feel that I am late.

My country lives in a unique moment of growth, development and progress. It would be a waste if the ones looking for social development don’t use this timing to address new challenges. The social ecosystem needs to help the growth of a third pillar. Co-chairing alongside traditional philanthropy and social investments, we need to welcome social business in this entrepreneurial form or encourage existing businesses that have the ability to scale social change.

Elaine Smith is development manager at Instituto Geração.

Further articles from Alliance magazine related to these topics:

Tagged in: Impact Simpsons social enterprise Social entrepreneurship Social investment

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