The Skoll World Forum, the world’s glitziest talking shop on social entrepreneurship and impact investing, is full of conversations. Here are four topics receiving major attention this year (and one that should be).
1. How to engage governments
At the CASE-hosted conference on impact-investing at Skoll on Wednesday, Katherine Fulton reminded her audience that when the term impact investing was coined five(ish) years ago, policy was nowhere on the agenda. Today, however, most impact investors and social entrepreneurs are ready to acknowledge the centrality of policymakers to having more than local-level change. For impact investors in developing markets, access to policymakers serves as a critical component of its investment model. Big Society Capital’s increasingly central role in the UK social entrepreneurship market would not have been possible without support by politicians, and social impact bonds often depend on a governmental partner. The Strive Network in Cincinati’s work on collective impact relies upon the participation of government partners. And so on.
2. The importance of telling stories
Wandering around the Skoll World Forum this year is an interesting bunch: the Sundance Institute, Participant Media (the folks that brought us Lincoln), NPR, PBS Newshour — storytellers. At the same time that the social entrepreneurship world is wrestling with how to tell its story, storytelling itself is changing to reach the Millennials who, according to Sundance’s Cara Mertes, multitask so much that we pack 36 hours of activity into every 24 hour day. On August 1, Participant will launch its latest, most ambitious effort yet: Pivot, a television station to carry forward its efforts to tell stories with meaning and purpose.
3. Impact investors’ (lack of?) risk tolerance
During a session with Skoll Scholars, IGNIA’s Álvaro Rodríguez read out a quote from a much-discussed report on social entrepreneurship:
The overwhelming majority of impact investing funds and we spoke to expressed a strong preference for investing in the later stage, certainly after commercial viability had been established and preferably once market conditions were well prepared for sustainable scaling.
This, Rodríguez pointed out, is not risk-tolerant capital. If impact investors want their investments to be truly disruptive (the theme of this year’s Forum), they will have to follow the lead of their most risk-tolerant peers; risk, Rodríguez argues, is a necessary byproduct of innovation.
4. How foundations (mis?)manage their assets
In the U.S., foundations are required to give away 5% of their total assets each year. The rest is handled by finance professionals trained to invest in a wide range of assets, maximizing return in order to ensure the perpetual existence of that foundation. What does this mean? That many foundations — including those focused on changing how markets hold investments in the very same companies and structures that they are fighting against.
Total Impact Advisors’ Arthur Wood says that shifting 20% of foundations’ assets to mission-related investments could unlock over a trillion dollars of investment at a cost of roughly five billion dollars. Debra Schwartz of the MacArthur Foundation pointed out another cost of shifting dollars into riskier investments, namely the money that would no longer be available to put into causes and research that no investor with profit motives will touch.
5. The unspoken centrality of faith and religion
Ten years on, social entrepreneurship remains primarily charity-funded, be that through philanthropic families like those of the Bing Bang network or, foundations like Skoll and Echoing Green, or indirectly by foundations like DOEN Foundation that act as limited partners (LPs) in impact investing funds. The link between charity and religion is a similarly tight one: in 2011, religious groups took in a third of U.S. charity, and religious people are more likely to donate to charity than secularists. If social entrepreneurship is charity-funded, and much charity stems from religious conviction, religion ought to be a (big, open) part of the conversation.