Good Capital
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Transcript of Good Capital
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Part Two: the blended value asset class
Is claiming its place on the capital map
© 2007 all rights reserved
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investment | philanthropy > spectrum of investing > overview
Investing and giving no longer binaryInvesting and giving no longer binary
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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investment | philanthropy > spectrum of investing > overview
Instead, a specrum has evolvedInstead, a specrum has evolved
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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investment | philanthropy > spectrum of investing
investmentinvestment philanthropyphilanthropyblended valueblended value
Do you seek market rate
returns?
Do you sacrifice all your capital for
positive impact?Do you sacrifice some return for positive impact?
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
You ask three questions, not just two, because it’s a spectrum
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investment | philanthropy > spectrum of investing
Strategic Philanthropy
Socially Screened
Funds
Community Investment
Socially Targeted Market Rate
Funds
Social & Community Development
Venture Capital
market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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investment | philanthropy > spectrum of investing
Strategic Philanthropy
Socially Screened
Funds
Community Investment
Socially Targeted Market Rate
Funds
Social & Community Development
Venture Capital
market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit
•Calvert• Domini• Access Capital• Generation
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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investment | philanthropy > spectrum of investing
Strategic Philanthropy
Socially Screened
Funds
Community Investment
Socially Targeted Market Rate
Funds
Social & Community Development
Venture Capital
market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit
• Blue Orchard Microfinance• Community Reinvestment Fund• Deutsche Eye Fund
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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investment | philanthropy > spectrum of investing
Strategic Philanthropy
Socially Screened
Funds
Community Investment
Socially Targeted Market Rate
Funds
Social & Community Development
Venture Capital
market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit
• Pacific Community Ventures• CEI (Maine, VT, NH)• CDVCA• Investors’ Circle
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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investment | philanthropy > spectrum of investing
Strategic Philanthropy
Socially Screened
Funds
Community Investment
Socially Targeted Market Rate
Funds
Social & Community Development
Venture Capital
market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit
• Calvert Foundation• Good Capital• Nonprofit Finance Fund• RSF Social Finance• Oasis (Blue Orchard)
© Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
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Strategic Philanthropy
Socially Screened
Funds
Community and SE
Investment
Socially Targeted Market Rate Instruments
Social & Community Development
Venture Capital
market ratemarket rate near market ratenear market rate concessionary rateconcessionary rate no return, tax creditno return, tax credit
• REDF• Social Venture Partners• New Profit Inc.
Acumen,Newschools
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The new space we fill…
Risk/Return
Purpose
Why they don’t
plug the gap
TraditionalCapital Market
Market rate risk/ return
Maximizefinancial return
No interest in social impact or the cost of doing good
Donors -Grants
HI RiskNo Return (tax break)
Maximize social return
Limited scale
Often lacks business case
Debt(NonProfit, ComDev,
most PRIs)
Med/Low RiskLow Return
Demands collateral, lower risk profile doesn’t fund expansion
Expansion Equity and Equity-like
Med/High RiskMed/Low Return
Balances SROI within traditional business ROI for expansion
Fills the growth gap, its what we are creating
CDVCs/ SVCs
High RiskMed/High Return
Maximize financial return within social or community development context
No appetite for the cost of doing good
Fiduciary responsibility to get a market rate return
Social Return Financial Return
Balances SROI within business traditional ROI
e.g. Banks and Private Equity
Foundations Calvert Foundation Partners for a Common Good NP Finance Fund
Pac Com Ventures SJF Ventures Investors Circle
Some Venture Philanthropy and Foundations nibble around the edges, no inst.
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Filling the growth gap
For funding the expansion of proven social enterprises….
Opportunity Solution Why GC Execution
…creating the need for a new asset class that: understands the risks and benefits of doing good, invests in great social entrepreneurs, and creates the inspiration and motivation for others to think big, achieve more
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CommercialDebt
Grants
Infr
as
tru
ctu
re
Capital
SocialAngels
SocialVC
“PRI”Debt
PublicMarket SRI
LandscapeDefinition
Evaluation/Certification
Transactional(e.g. Funds)
ExchangePlatform
AA1000
GRI
RSF Social Finance
NFF Capital
Partners
Investors’Circle
Aspen Institute
Domini SocialInvestments
Underdog
Chicago ClimateExchange
SouthShore Bank
Calvert Special Equities - CF CI Notes - Calvert Mutual Funds
New Schools
BOVESPASocial
Stock Exchange
Origo
NFFLendingAcumen Fund Generation
Investments
GenerationFoundation
Ashoka
Deutsche Eye Fund
© Jay Coen Gilbert, Don Shaffer and John Katovich
The infrastructure for the Social Capital Market is emerging
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CommercialDebt
Grants
Infr
as
tru
ctu
re
Capital
SocialAngels
SocialVC
“PRI”Debt
PublicMarket SRI
LandscapeDefinition
Evaluation/Certification
Transactional(e.g. Funds)
ExchangePlatform
CalvertPhilanthropicAssets/DAF
AA1000
GRI
RSF Social Finance
Local Exchange
NFF Capital
Partners
Investors’Circle
Aspen Institute
Domini SocialInvestments
Underdog
Chicago ClimateExchange
B Lab
Good Capital
SouthShore Bank
Calvert Special Equities - CF CI Notes - Calvert Mutual Funds
New Schools
Xigi.net
BOVESPASocial
Stock Exchange
UK SocialStock Exchange
Fourth Sector Network
Origo
NFFLendingAcumen Fund
Patient CapitalCollaborative Generation
Investments
GenerationFoundation
Ashoka
Deutsche Eye Fund
© Jay Coen Gilbert, Don Shaffer and John Katovich
More intermediaries a sign of new money in the Blended Value Market
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investment | philanthropy
New capital with new powerto make change
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• Working Today• Evergreen Lodge• Real Benefits• The-hub.net• Pura Vida• Women’s Bean Project• The Benefit Bank
good capital > where
Social enterprises ready to grow
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accelerating the flow of capital to good
Goodcap.net
GoodCap’s xigi map:http://www.xigi.net/index.php?en=338
Graphic conceptualizations © Mark Beam, Collective Intelligence 2007
Impact graphic © Aquillian Investments LLC