SOCAP11 logoThe 2011 Social Capital Markets Conference (SOCAP11) parsed out a number of issues surrounding social capital and clarified an important point. Impact investing is not just about money.In an insightful panel discussion, “Investing With Impact: A Partnership-Based Approach to Social and Environmental Innovation” moderated by Jeff Hamaoui, Founder and President of the Cazneau Group, representatives from 3 sectors–non-profit, government, and financial–talked about what brought them together to support a social capital initiative in Brazil and how building partnerships is a key component of impact investing.A few memorable quotes from moderator Jeff Hamaoui set the scene for the session:

“Collaboration is the process, innovation is the product.”

“Social technologies effectively bring people together to co-invest successfully & innovate together.”

“Opportunity leads, design follows.”

The Partnership Mindset

The session traced the path of how 3 distinct sectors could align on the same initiative. Hamaoui framed the discussion with the concept of the “partnership mindset”, i.e. social entrepreneurs looking beyond only a monetary ask when approaching investors, and engaging in multiple value conversations, marketplaces, and landscapes…that could in turn lead to capital investment.

So, what does that mean?

Luckily, to break down the concept of “partnership mindset”, Hamaoui outlined the 4 types of commodities (i.e. the 4 C’s) that can be traded by social entrepreneurs, investors, government, non-profits, thought-leaders, banks, etc.

4 Commodities Exchanged Under the Partnership Mindset

1. Capital is monetary investment, and is often the primary commodity sought.
2. Capacity is the ability to do something on the ground such as product design, product delivery, product assessment. Groups that are familiar with an area, region, or community may be able to offer capacity commodity to another group.
3. Credibility is name/brand recognition that can lend expertise or experience. This could be helpful in building networks, getting meetings with decision-makers, and building a presence in a new region or field.
4. Creativity is the out-of-the-box solutions that can result from connecting with another group in the same space/geography and leveraging each group’s experience and resources.

Key Points from Each Panelist

The 3 panelists were dynamic and enthused to tell the story of Imago, the joint project aimed to address 2 business challenges in Brazil: consumer financial education and packaging and recycling.

Lala Faiz, Partnerships Advisor in the U.S. Secretary of State’s Office of Global Partnership Initiatives (government)

  • one of the Secretary of State’s new initiatives is investing with impact, and the office sought to create a new partnership in Brazil to unlock opportunities for business and society
  • identified 2 targeted business challenges which had high market demand, for which there was a sizeable market opportunity, and which would yield significant social and environmental impact
  • but they needed partners to both invest in the initiative and provide intellectual capital through capacity-building, credibility, and creativity to create sustainable market-based solution

Cameron Peake, Mercy Corps Social Innovations Officer (non-profit)

  • social investment is a critical catalyst to longer term sustainable social change
  • mitigating risk, and seeding longer term commercial opportunities that can impact society …that’s why they (as a non-profit) got involved and provided seed funding for new ideas (innovation)
  • Mercy Corps was able to offer capacity, credibility, and capital via global best practices, knowledge of needs on the ground, and use of strategic subsidy

Michelle ViegasOffice of Outreach & Partnerships at Inter-American Development Bank (financial)

  • did not provide funding, but did provide intellectual capital and credibility via contacts (banks, investors, VC/private investors, govt, corporations)

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