Every year in early September, thousands of social finance geeks converge in San Francisco, California for what many would call the ComiCon for socially-minded investors: The Social Capital Markets Conference (SOCAP).
SOCAP is a not just a conference, but a meeting place to find your next investor, collaborator or employee.
Social Finance and Impact Investing is the practice of investing while considering your social and environmental values along with your financial priorities.
As a Portfolio Manager in the impact investing team at World Vision, I had three key questions going into SOCAP:
1. How do NGOs fit into the impact investing landscape?
2. What types of impact investing strategies are international NGOs engaging in?
3. What are the major challenges/advantages international NGOs facing in the current impact investing landscape?
From the four days spent at the conference, here is what I gathered:
1) There is no clearly defined role for INGOs in the impact investing space:
Because of their size and reach, NGOs have a variety of assets that would make them ideal partners for other impact investing organizations such as funds, associations etc.
However, because of the same size, reach and capabilities, most external parties haven’t figured what the best ways in which to partner with NGOs like World Vision are. As World Vision continues to explore our role in the space, we definitely have to keep in mind that we don’t have one defined role, but instead, could be a vehicle for all types of activity.
2) International NGOs are beginning to wade into Impact Investing -- through a variety of approaches:
Through meetings other NGOs, I quickly realized that a multitude of them are entering the impact investing space, but almost every organization is doing it in their own way. Our friends at Oxfam and Mercy Corps are working on impact investing as well, but in very different ways:
- Oxfam America launched the Women in Small Enterprise (WISE) program last year. In this initiative, Oxfam works with financial institutions in Latin America to increase access to capital for women entrepreneurs.
- Mercy Corps has taken a completely different approach and is making direct investments of up to $300K in early and seed stage social venture start-ups internationally.
3) NGO employees need to be educated on Impact Investing:
As I sat in a SOCAP room, listening to a panel on Impact Investing in INGOs, the moderator, Stephanie Marineau from Pact Ventures, asked the crowd how many individuals either worked for or wanted to work for an NGO – almost everyone in the room raised their hand.
This led me to believe that one of the largest challenges for NGOs will be the potential negative reaction of employees to social impact investment. Like anything new and different, impact investing may be threatening to employees and could a signal a shift in direction they are uncomfortable with.
NGOs need to educate their employees on impact investing and how it compliments their traditional work. Employees that are excited about impact investing could also see it as new and exciting way to enhance the organization’s impact. How NGOs harness and shape employee energy could make or break how we drive impact investing forward in our organizations.