How will Social Enterprise Unlock Capital?

Panahpur’s answer to the SOCAP10 Impact Challenge (www.socialcapitalmarkets.net)

Three things must happen before the full force of capital can unleashed into Impact Investing. This is our task:

Firstly, market infrastructure needs to be developed. Projects such as the various Social Stock Exchanges in development around the world need to be launched, and they need to demonstrate the appetite from social investors and from social enterprises to raise and trade capital in a public marketplace. The longer term, world changing vision must be for these markets to be open to retail investors through development of solutions to connect investors to the impacts of their investments – using tools such as the NeXii platform. In this way, citizens may in time start to operate their own capital in ways that are consistent with their values and beliefs. We might become empowered by what we already own.

Secondly, ways of measuring impact need to be cracked which overcome the danger of meaninglessness caused by over-reliance on assumptions. Robust objective assessment of the non-financial value-creation of investments must not be driven by the lowest common denominator. This is possible. But it remains the most vexatious area and the greatest potential barrier to success.

Thirdly, products need to be developed that can be traded in the new social stock exchanges which attract institutional investors and enable them to sell these as a new asset class. This work is the furthest advanced of the three requistes, and will follow naturally from the successful achievement of the first two.

The capital revolution is gaining much momentum, and the conventional investment world will be happy to embrace Impact Investments as a new product to sell when we give them a sell-able proposition. Our critical role, and our profound responsibility, is to ensure that the three pre-requisites are delivered in a way that enables conventional operators of capital to migrate their funds into the Impact arena in the context of their fiduciary duty. If we succeed, values can reconnect with money and the human race can take an historic step forward.

“The person that pays the piper calls the tune” … we are hear to help ensure that this person is interested in more than making money.

  1. 01st Sep 2010

    Dear James

    If money could sing, your blog is music to my ears! I have an audacious and inspiring socially responsible regeneration investment proposal which I think you would be fascinated by, based in the inner city of Bristol, rooted in expressing the love of Christ for our city. I am in full tilt searching for mission connected investors and so far the best web commentary on this subject with the all-important faith link is your blog. Do please get in touch as I sense both our organisations will benefit hugely from discussing what we have been working towards for the past few months.

    I hope to hear from you

    God bless

    Jari

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