Tommy Hutchinson’s piece ‘Doing good and wearing nice shoes is OK, Mr Branson’ captures rather well some widespread cynicism from the public regarding Virgin’s attempts to enter into social entrepreneurship. There is no difficulty in understanding some of Virgin’s possible motivations in a service involved in charitable giving, but I suspect few in the public think they are wholeheartedly public-spirited, which seems also to be Hutchinson’s view.
It is true, as he says, that I wrote a piece some years ago highlighting the awesome difference to charitable fundraising which Justgiving (where I was once chairman) has engineered in the UK and the USA; others have entered this field as well. But I suspect most consumers now understand the difference between the motivation of newcomers such as Everyclick on the one hand and this latest venture of the Virgin machine on the other.
Where Hutchinson enters some interesting territory is in his segue into how we can utilize the framework created by firms such as Justgiving in the area of social investment. We at ClearlySo have begun to facilitate such capital flows in both an online and offline format (as in our ‘Social Sector Speed Dating’ events) and the potential is enormous.
It is true that along the way the traditional infrastructure for such investment flows are being disintermediated, but they are inefficient and, especially in the social investment arena, just too ineffective. Mainstream investors are unwilling or unable to back interesting social businesses, due to regulations and inertia, and where it does work the cost is high. If this had not also been true in the world of charities, where the existing traditional channels were similarly suboptimal, there would never have been a market opportunity for Justgiving to exploit. I think the application of this model, in developed and developing markets, has only just begun.