Using the Market to Catalyze Poverty Alleviation
The Social Capital Markets conference has been catalytic in creating a connection between investing and poverty alleviation, validating the fact that there is a market that works for the goals of philanthropy and international development, yet that can return capital with a positive blended value return to investors.
SOCAP, as it’s called, has convened more impact investors, who want a mix of financial return as well as social impact – as measured by alleviating poverty and improving livelihoods of marginalized people – than any gathering in the world. As with the seminal microfinance gatherings back in the mid- 1990’s, which brought all the players together to eventually coalesce into creating microfinance as an accepted asset class.
SOCAP has proved that individuals, foundations and institutional investors, aid and international development agencies can come together and collaborate to invest, donate, grant and subsidize the innovations that empower people and help lift them out of poverty.
SOCAP is not just about investors who realize they can use more than donations or their tax dollars to make a difference in the world. It’s also the world’s top global convening of the entrepreneurs who are using business to solve many of the world’s hardest and most intractable problems.
Hundreds of social entrepreneurs from the developing world and the developed world come to each SOCAP to learn from their peers and from those with more experience. Scores of companies that focus on poverty alleviation have built partnerships and alliances that help their impact reach greater scale more quickly and with less friction as a result of the connections they made while attending SOCAP.
We bring in entrepreneurs building businesses such as one working to use market based means to slow deforestation caused by chopping down trees for fuel in Mali by creating biochar for sale out of agricultural waste, to entrepreneurs building high tech, low cost anemia testing devices deployed in the slums of Mumbai and across India that save the lives of people whose blood tests positively for a trait that prevents them from getting malaria, and thus need to avoid being treated for anemia. Those entrepreneurs (and hundreds like them) often find funding through the connections they make at SOCAP. Funding comes through a mix of donations and grants, equity, sometimes into hybrid non profit and for profit organizations.
Research at a major investment bank suggests that impact investing that uses debt does not appear, over time, to have a discount to financial return, but that equity, which can be catalytic and take greater risks in attempting to make a scalable impact, will likely have a discount to financial return. There is a cost for doing good when you deploy equity. SOCAP focuses on the intersection between catalytic, risk taking equity and philanthropy and international development.
At SOCAP, valuable strangers meet and form connections. The community talks about the Big Issues and is inspired to take action. We feature social entrepreneurs, who are on the ground working on poverty and making a difference, as panelists in focused content sessions, in an Innovation Showcase and in Good Pitch Sessions at our events.
via SOCAP’s Goal.