http://blogs.hbr.org/2013/01/social-impact-investing-will-b/
This is an older article but it was interesting to me from a variety of standpoints. I think for social entrepreneurs who often have a hard time finding adequate capital to fund their organizations, the system this article discusses is particularly promising. If I were a potential investor, I would think that investing in a company that can produce a modest return, promote sustainability, and deliver social impact is a fantastic idea. A system like this seems very attractive for both investors and social entrepreneurs and in that it fulfills both parties’ expectations.
Peter, this article is very interesting. As I was reading the David Pozen article, I wondered how social entrepreneurs and founders of nonprofit organizations are able to obtain sufficient funds to get started and to continue growing. Although social entrepreneurs are not motivated by profits, money is still necessary to change and spread social values, particularly on a “groundbreaking” or large scale. There are operational costs, marketing expenses, employee salaries, etc. that must be paid. It seems that the social entrepreneur could be taking on an even greater risk than the traditional capitalist entrepreneur, who may have a higher potential for income from his work. As stated in this article, government funding and donations can only take an organization so far. We need a more effective funding model for social organizations. The idea of social impact bonds is very interesting – an investor being paid if the cost or incidence of some societal woe is reduced. I wonder if this is something that could be successful in the United States.