We have 3 investment portfolios:
We’ve produced our new introduction clip! Watch this to know more about the philosophy and questions that drive us at Panahpur.
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We were pleased to Chair the Working Group on the Social Business Frontier for the UK Advisory Board to the G8 Social Impact Investment Taskforce. Our report, along with the main Taskforce reports and the reports of the National Advisory Groups and other Working Groups were all launched yesterday by Chancellor George Osborne and Sir Ronald Cohen at an event in Downing Street, and can be found here. This is from the introduction to The Social Business Frontier Working Group report:
What is the purpose of business? What is it there to do? Who is it for?
Business lies at the heart of society – as an employer, a provider of goods & services, a wealth creator and an innovator. In return, society gives business a licence to operate, offers its labour and consumes its goods and services. A healthy society relies on a healthy relationship with business, and vice versa. This interdependence creates a covenant between business and society.
Business has historically been the greatest driver of economic prosperity and social progress. However, recent history indicates that if business does not honour the covenant between business and society, it risks destroying value for both parties. Defining success in business in exclusively financial terms has introduced exactly this risk. It has made the question of how to better align the interests of business and society a pressing issue of our time.
It is therefore timely and welcome that the G8 Social Impact Investment Taskforce has been established to examine this, alongside other related issues. This paper outlines thinking and practice at the frontier of this field. It is relevant to everyone who invests in, is employed by or operates a business. It is tactically relevant because any loss of licence-to-operate is an important risk for businesses to understand. It is strategically relevant because successfully addressing this question has the potential to create substantial value for both shareholders and society as a whole.
Commenting on this report, James Perry said: “The legal and regulatory environment for business and charity in the UK was established in an analogue age where profit and social good were conceived as separate. Certain sectors of business and charity have now moved into the digital age. Entrepreneurs, investors, charities and governments are collaborating and aligning to create profits with purpose – delivering measurable social value alongside financial value. New structures, such as Benefit Corporations, Social Impact Bonds and Community Interest Companies, are being conceived and adopted around the world, and offering the promise of a step-change in the ability of charities and businesses to create social value . The time has come for a strategic response in the legal and regulatory environment so as to support, rather than inhibit, these developments”.
It will be interesting to see how policy makers respond to the substantial recommendations made by the Taskforce. More on that later.
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It is rare for us to reproduce someone else’s blog in full. But in this blog first published a couple of weeks ago on the Oxfam blog, Pamela Hartigan, Director of the Skoll Centre for Social Entrepreneurship at Oxford’s Saïd Business School, elegantly says what we have been trying to say here.
“The first time I heard the term “social entrepreneur” I thought it referred to business people who liked to party. That was about twenty years ago, when the term was just beginning to surface, said to have been coined by Bill Drayton, founder of Ashoka. Ashoka was the first entity that identified and supported such individuals – innovators with a “bold idea” aimed at changing a system that was at the root of a major social or environmental problem.
Twenty years ago I fell in love with “social entrepreneurship”, its promise, and most of all, the stories of the champions that practiced this approach. They didn’t take “it can’t be done” as a deterrent – in fact, as one of them described to me, “’it’s impossible’ is our clarion call to action”. As the first Managing Director of the Schwab Foundation for Social Entrepreneurship, an entity supported by World Economic Forum’s founder Klaus Schwab and his wife, Hilde, I spent eight years identifying, celebrating and supporting such individuals, providing them with opportunities to enter the coveted corporate enclave that is the annual meeting of the WEF at Davos – which in turn gave them access to networks of power they had never been able to tap. Many of these social entrepreneurs formed strong and lasting relationships with members of the corporate C suite, heads of philanthropic foundations and the media leaders that attend Davos. It was difficult not to become infected with the bug of “social entrepreneurship”.
The Schwab Foundation certainly was not the only social entrepreneurship organization on the scene. A host of other organizations were created at around the same time, including Echoing Green, the Skoll Foundation, the Omidyar Network, Acumen, Mulago, to name just a few. These were primarily based in the USA, but the UK quickly followed suit along with countries on the European continent, Asia, Latin America, Africa and Australia. Governments, led by the UK, embraced “social enterprise” as the “third way” – income-generating charities that did not depend wholly on public coffers but dealt with the increasing number of social problems that defied government solutions.
My main concern about this viewpoint is that it stripped the notion of innovation and systems change – the essence of social entrepreneurial endeavour – right out of the approach. In the UK and those countries that have followed, social enterprises have become part of the “social enterprise industrial complex”, sub-contractors to government and feeding into a dysfunctional system. But that is for another blog.
The point is, all of a sudden, social entrepreneurship was everywhere and everyone wanted to be one. But there was one question that was raised at every national and international gathering of social entrepreneurs. As former President Bill Clinton noted in a speech about the challenge of school reform “Nearly every problem has been solved by someone somewhere. The frustration is that we can’t seem to replicate [those solutions] anywhere else.” Why is it that the only system-changing approach that has managed to go to scale is microfinance? Yet we forget that it took 30 years and an estimated US$20 billion in subsidies from major foundations and individual philanthropists to transform microfinance from an undefined effort sitting between philanthropy, aid and the market, to something much closer to mainstream investing.
This begs the question as to whether the only way social entrepreneurship will scale is by becoming part of the mainstream market system. As someone who is now working in a business school environment, this idea carries significant weight.
I do believe that transformational systems change will never be achieved on a massive scale by non-profit organizations or even by well-meaning “hybrids”. I very much
Which needs fixing first?
believe that the way forward is through business. And so I have come to feel increasingly uncomfortable with the term “social entrepreneurship” and its main actor, the “social entrepreneur”.
But the reason is not because I have bought into the notion that capitalism as we now practice it is the solution – but because I firmly believe that every entrepreneur has to be a “social entrepreneur”. The way business has operated in the last 50 years must be disrupted because we will not survive as a society or a planet if we do not tear down the walls that compartmentalise economic, social and environmental activity. That is why I am now working in business schools. The way we approach business education has to change.
There is no doubt that the term “social entrepreneurship” served its purpose at one point in time, mainly because we needed to highlight what type of entrepreneurial practice we were referring to – but today it only serves to further dichotomise entrepreneurial practice into the “social” and the “commercial” (“non-social”?). It creates a false separation between “this is where we make money, and this is where we do good”. And that is EXACTLY what is wrong with capitalism today.
It is hard for us who have been born and raised under capitalism and the large corporation to reflect on the fact that it was only relatively recently – not many centuries ago – that humankind finally began to achieve a surplus, something more than the necessities for survival.
The central precept of all early corporations that began to take shape around the 16th century was that even though they were chartered as private entities and possessed special privileges and monopoly rights, they were still expected to carry out activities with a public purpose. That has changed and needs to be revisited if the world is to advance.
Yep, maybe it is
There is no doubt that the modern corporation as we know it today has empowered individual genius and bestowed great social benefits. Yet it has also done social harm. Many of the ills of modern life – non-sustainable levels of personal and institutional debt, toxic air and water, workplace injury, loss of livelihoods for communities, political bribery – can be traced to corporate lack of responsibility to one or more constituencies. This is not intentional. No one wants to cause poverty, pollution, disease, unemployment and corruption. Rather, they want to make profits. But in that pursuit, they may find anti-social behaviour pays. To achieve profits in the short term, corporations exact a “social and environmental price” and that price is high and rising.
The key to sustainable capitalism is reasonable profits as opposed to maximizing profits. In the current system, a segment of society is trying to maximize profits without concern for the impact on the well being of the society as a whole, while another segment of social organizations have to deal with the fall out. The system is not working.
Fortunately, there are a growing number of people, particularly among the young, who embrace the notion of “entrepreneurship for society” rather than commercial or social entrepreneurship. They are not waiting until they are 50 years old when they have “made their money” and can “give back”. I am optimistic that through the new breed young professionals, we can go back to the future and base our economies on activities that uphold social and environmental goals without eschewing financial sustainability”.
- Pamela Hartigan