Do you enjoy reading new posts on Innov8Social? Well now you can continue your reading on SocialEarth! I am a new contributor on the site and will be posting there a few times per month.  You can check out my first post here.

   
What is SocialEarth?

   
SocialEarth is a network of bloggers worldwide writing about social entrepreneurship. And according to its stated objectives, it “seeks, promotes, and supports social entrepreneurs…who have the audacity to create mindful businesses where profitability is a necessary objective and solving a ‘social ill’ is an imperative.”
SocialEarth LogoAnd SocialEarth is establishing a presence. With over 13,000 Twitter followers and 14,000+ Facebook fans, the site distributes posts to its homepage and social network channels, as well as through RSS syndication.
It is also developing a readership base with hundreds of thousands of unique visitors per year, and growing.
The site is a novel attempt to inform the public about social entrepreneurship, connect social entrepreneurs, and spread the word about new and emerging trends in the field.

   
A Few Interesting Reads on SocialEarth



Innov8Social on SocialEarth
   
You can keep up with Innov8Social on SocialEarth here:
I look forward to writing posts on SocialEarth that ask questions, build on ideas presented in Innov8Social, and connect with existing efforts of SocialEarth contributors. It is a great forum and fantastic way to continue exploring social innovation.

An Increasing Need for Clean Water, Demands Solutions

Sometimes a need can be so necessary and apparent, that a innovation is a welcome sight, rather than a big surprise. Access to clean water after a disaster is one such need that has affected global superpowers as well as countries deep in their development stages. Whether the need for clean water comes after natural disasters such as hurricanes, tsunamis, earthquakes or from man-made scenarios such as war, explosion, or delayed government response—it is essential, and often unmet.

Meet DayOne Response

DayOne Response is a social venture aiming to answer the call for clean water. DayOne Response’s V.P. of Business Development, Amy Cagle, was on hand at the SOCAP11 Innovation Showcase on the second day of SOCAP11.Below she shows us the DayOne Waterbag that can sanitize any water and make it potable by utilizing the technology of PUR purifier packets (that purify using chlorination-flocculation technology) along with a specially-designed waterbag for easy water collection, filtration, and delivery.

Watch the Interview

How can a waterbag do that? 

DayOne Response demonstrates in this short training video taken in Haiti. Water filtered using DayOne Waterbags and PUR packets meet the World Health Organization guidelines for drinking water.

The DayOne Waterbags may be a scaleable solution, since they take up little space when empty, can turn almost any water into clean drinking water, and can be distributed quickly after a disaster, which can free up resources, and can give affected individuals quicker access to safe water.

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)
rock on penniesIn exploring the social innovation space, one term seems to find its way to center stage on a regular basis. Impact investing. Whether you are a social entrepreneur, non-profit, student of the field, foundation or investor looking to make a difference with your dollars, this is a key concept to explore.

What is Impact Investing?

Impact investing is the concerted effort of investors to fund or otherwise contribute to market solutions that have a positive social or environmental impact.Another way of thinking of impact is investing is to see money or profit as one stakeholder in a business, and that environment and society/community to also be stakeholders. Impact investing, then, seeks to maximize the ‘triple bottom line‘ by seeking a return on investment in terms of capital, social impact, and/or environmental impact.

Defining Definitions

Wikipedia defines impact investing as:

an investment strategy whereby an investor proactively seeks to place capital in businesses that can generate financial returns as well  s an intentional social and/or environmental goal.

The Global Impact Investing Network (GIIN) defines impact investing as:

Impact investments aim to solve social or environmental challenges while generating financial returns, which can range from producing a return of principal capital to offering market-rate or even market-beating financial returns.

GIIRS, a rating and analytics methodology expounds on the GIIN definition:

Investors are increasingly seeking impact investing opportunities or investments that generate a financial return while solving social and environmental problems. The Monitor Institute’s recent report on “Investing for Social & Environmental Impact” estimates that Impact Investing has the potential to grow to about 1% of total managed assets, which would result in about $500 B of capital channeled toward social and environmental impact.

The Economist, in their recent article “Happy Returns: birth of a virtuous new asset class” impact investing is explained as:

designed to yield both a financial return and a broader benefit to society.

The Rockefeller Foundation explains the concept:

Impact investing— which helps address social and/or environmental problems while also turning a profit—could unlock substantial for-profit investment capital to complement philanthropy in addressing pressing social challenges.

The Wary Eye

Can social innovation have its cake and eat it too? Is it possible to create market solutions that create social and environmental good but that also can put capital in the pockets of entrepreneurs, investors, companies, and even governments? Not everyone is so sure.

There has been some criticism of the concept and viability of impact investing.

For example,  Next Billion posted this article “The Dangerous Promise of Impact Investing–From Ashoka Europe” quoted Ashoka’s Europe director’s qualms with impact investing:

“Great social entrepreneurs look for the fastest way to change the system with the cheapest form of funding available – not for the safest way to produce surpluses to pay back expensive loans or mezzanine capital.” This exposes the weakness of the impact investing movement, which is predicated on the ability, and willingness, of social ventures to generate income.

And, in the same article in which the Economist outlines the concept, it also outlines some skepticism:

New regulations are needed (to clarify, for instance, whether pension funds can invest with an explicitly social purpose). More people need to be tempted out of mainstream finance. Better metrics for social impact are essential. None of this is easy, especially in turbulent times.

 

If you have been following the news of AB 361–the CA bill that would create a new corporate form for social enterprise called a benefit corporation.  You may be wondering about the status of the bill.In Review

As a quick summary, AB 361 passed in a vote in the California Assembly on Monday August 29th 2011. It has been forwarded to Governor Jerry Brown’s Office for final approval.

The Update

After speaking with the office of Assemblymember Jared Huffman, sponsor of AB 361, the update is that Governor has until October 9, 2011 to make a final decision on the bill.

What You Can Do

Here are a few things that can make you a savvy social enterprise citizen and supporter.

1. Become better informed about AB 361. You can take a spin through a few of the recent posts on AB 361, visit Assemblymember Huffman’s page, or read about the policy and similar legislation that has passed in other states on the B Lab website.

2. Learn about other social enterprise initiatives in CA. Learn about the key features of AB 361 and SB 201—which would create flexible purpose corporations in California, and which is also at the Governor’s desk. The 2 bills are not mutually exclusive—i.e. they both can be passed.

3. Sign the Care2 petition in support of AB 361. You can read more about the petition and use the widget here. It is a quick and easy way to show your support.

4. Write a letter to Governor Brown’s office. With nearly a month of time on the clock, there is ample opportunity to get involved and write in your support for corporate structures for social enterprise. You can read a sample letter here.

One way of getting to SOCAP11 this year at the Fort Mason Center was via the Bus 30 stop in San Francisco. Veering right, then left, and hiking a mini super hill would lead you to this view of what would become your new home campus for the next few days:

SOCAP11 at Fort Mason Center

SOCAP11: Money + Meaning = ?

September 6-9th 2011 marked the 4th annual Social Capital Markets Conference (SOCAP). SOCAP connects social innovators including investors, social entrepreneurs, foundations, non-profit institutions, designers, ‘social’ media, and thought leaders.

As the best attended SOCAP to date—with well over 1500 attendees—this year’s conference focused on impact investing and featured a number of sessions that explored the financial angle of investing in social ventures. It also took a look at the big why—why it matters to invest in projects that have meaning or create some material positive impact. And it delved in to the big how’s—how to design for social innovation, how to build audience, and how to secure seed funding and investment.

Outside Insider

SOCAP11 was an insider’s conference—with plenty of financial-speak, legalese, design lingo, and social innovation buzzwords to tire out your Twitter fingertips.

And SOCAP11 was a place for newbies too, providing a guided path into the world of social impact investing through a broad variety of session tracks, ‘open space’ time for impromptu sessions, and plenary group sessions to bring everyone together and to help distill the deluge of useful information.

In fact, there was a balanced buffet of tracks an attendee could choose from to explore their interest in the field, and even partake in a few “Wild Card” sessions that didn’t squarely fall into a track but were topics of interest. And you could mix, match, sample, and float in and out of tracks based on your preferences.

SOCAP11 Tracks

Doing Well By Doing Good

A huge focus of the conference was exploring the meaning behind social innovation. And time and again individuals from various niches mentioned this phrase…”doing well by doing good.” It seems to be the call that social entrepreneurs, designers, socially-inspired professionals and impact investors alike are determined to answer.

Tweet-casting

After tweeting live from Dreamforce and appreciating the experience as a way to share and learn from various perspectives, I joined a number of other regulars tweeting live from #SOCAP11. It was a great way to connect in real-time. There was even a “tweet-up” to meet the fellow tweeters live.

Parse, Share, Repeat

I met a number of interesting innovation start-ups, learned even more about the benefit corporation movement, and was introduced to a plethora of new keywords. I look forward to parsing out the ripe picks and sharing them with Innov8Social readers. So, don’t change that dial—I will be sharing my experience through photos, video, informative posts, buzzword drilldowns, and reflections on Innov8Social in the upcoming days. To stay connected, just click the SOCAP11 tag to see all Innov8Social coverage of the event.

Catch Up on SOCAP11

There are a number of ways to get your fill on the conference and individual sessions.  Here are a few:

SOCAP11 kicked off informally Tuesday with pre-registration at the Hub in San Francisco. The conference officially starts on Wednesday, September 7th at Fort Mason.

Welcome to SOCAP11

This excerpt from SOCAP Convener Kevin D. Jones in the conference guide explains a little background behind SOCAP:

“SOCAP’s mission is to help create social and economic power for the poor. And we help catalyze a for-profit market to make that happen. Our initial goal in creating SOCAP was to show that the market between giving and investing was real, that it was big and that it was growing…”

SOCAP11 Coverage

Follow our live tweets of SOCAP11 @innov8social on Twitter. You can also search  #SOCAP11 on Twitter for related tweets. After the conference, read posts by clicking on the SOCAP11 tag on Innov8Social.

If you have even skimmed the contents of this blog you likely know about AB 361, the California legislation that would create a new corporate form for social enterprise called a benefit corporation.

California map iconYou may not have heard of SB 201, however. It is a different bill that also proposes a new corporate form for social enterprise in California, called a flexible purpose corporation.
Note: it is great coincidence that there are 2 social enterprise bills heading to the Governor’s desk at the same time. Additionally, they are not mutually exclusive—i.e. both bills can be passed into law. In fact, arguably, the fact that there are 2 different social enterprise bills seem do twice as much to suggest that the time is ripe for legislation recognizing social enterprise in California.
Key Features of AB 361 (Benefit Corporations)
Read the full text of AB 361 here. Summaries of key features are numbered in bold, while text exactly or very closely mirroring the actual language of AB 361 is in italics.
1. Creates Benefit Corporations (benefit corps). This bill would authorize and regulate the formation and governance of a new form of corporate entity known as a benefit corporation. 
2. Existing corporations can become benefit corps with 2/3 shareholder vote. The bill would also permit an existing corporation to become a benefit corporation by amendment to its articles of
incorporation, as specified, adopted by at least a minimum status vote (2/3 of vote or greater if required by articles of incorporation) and would permit a corporation to become a benefit corporation through a merger, reorganization, or conversion, or domestic other business entity, as specified.
3. Benefit corps must create material positive impact on society and the environment, as determined by an independent 3rd-party standard.  The bill would provide that a benefit corporation may be formed for the purpose of creating general public benefit, defined as a material positive impact on society and the environment, taken as a whole, as assessed against a 3rd-party standard. 
       Third-party standard is a comprehensive assessment of the impact of the business developed by an entity that has no material financial relationship with the benefit corporation or any of its subsidiaries and  where: A) not more than 1/3 of members of the governing body of the entity are representatives of associations of businesses in a specific industry, businesses whose performance is assessed against the standard; and B) the entity is not materially financed by an association of business described in (A).     
       Additionally, the third-party standard must be developed by an entity  that accesses necessary and appropriate expertise to assess overall corporate social and environmental performance; and uses balanced multistakeholder approach, including a public comment period of at least 30 days to develop the standard. The following information on the 3rd party standard must be made publicly available: criteria considered when measuring the overall social and environmental performance.
4. Benefit corps may be formed to create a general public benefit and can also identify additional specific public benefit(s). The bill would also provide that a benefit corporation may identify one or
more specific public benefits as an additional purpose of the corporation. Examples of specific public benefit include: providing low-income/underserved individuals or communities with beneficial products/services, providing economic opportunity beyond creation of jobs, preserving the environment, improving human health, promoting arts, science, or advancement of knowledge, increasing capital to entities with a public benefit purpose, or another particular benefit to society or the environment.
5. Board members must consider multiple stakeholders (including shareholders, beneficiaries of the public benefit, the environment) when making business decisions. This bill would require directors to consider the impacts of any action or proposed action upon specified considerations, including, among others, the shareholders and employees, and of customers who are beneficiaries of the general or specific public benefit purposes, and the environment, and would allow directors to consider the impacts of those actions on, among other things, the resources, intent, and conduct of any person seeking to acquire control of the benefit corporation.
6. Certain reporting accounting and transparency formalities must be met. This bill would require the board of directors to prepare a specified statement relating to the public benefit purposes of the corporation.  The bill would require the benefit corporation to prepare an annual benefit report.
7. Duties of director/officer with regard to public benefit may only be enforced in a benefit enforcement proceeding. This bill would include provisions governing the fiduciary duty
and liability of an officer or director of a benefit corporation. The bill would provide that the duties of a director or officer, and the general, and any specific, public benefit purpose of a benefit corporation, may be enforced only in a benefit enforcement proceeding, as defined, that would be permitted to be commenced or maintained only as specified.
Additional Features:

8. Is part of a nation-wide effort to create benefit corporations in various states. As of writing this 6 states have passed benefit corporation legislation.
9. There is an option for a voluntary certification. B corporation is a voluntary certification which calls for many of the same features as a benefit corporation. A company can choose to be both/either a B corporation and a benefit corporation (if their state has passed legislation)
Key Features of SB 201 (Flexible Purpose Corporations)
Read the full text of SB 201 here. Summaries of key features are numbered in bold, while text exactly or very closely mirroring the actual language of AB 361 is in italics.
1. Creates Flexible Purpose Corporations (flexible purpose corps). This bill would enact the Corporate Flexibility Act of 2011 and would authorize and regulate the formation and operation of a new form of corporate entity known as a flexible purpose corporation.
2. Existing corps can become flexible purpose corps with 2/3 vote of shareholders. The bill would authorize existing corporations and other forms of business entities to merge into or convert into a  flexible purpose corporation upon completion of specified requirements, including approval of the transaction by a supermajority 2⁄3 vote of shareholders, or a greater vote if required in the articles, as specified.
3. Flexible purpose corps can convert to corp, non-profit, etc. The bill would also authorize a flexible purpose corporation to convert into a nonprofit corporation, a corporation, or a domestic other business entity, upon satisfaction of equivalent conditions.
4. Can provide dissenters’ rights of appraisal for shareholders. The bill would also provide dissenters’ rights of appraisal for shareholders voting against certain transactions, as specified.
5. Must list special purpose and complete corporate formalities. The bill would specify the required and permitted contents of articles of incorporation that a flexible purpose corporation would be required to  file with the Secretary of State, including the special purposes, in addition to any other lawful purpose, that the corporation shall engage in, which may include, but are not limited to, charitable and public purpose activities that could be carried out by a nonprofit public benefit corporation.
6. Requires managers/directors to specify objectives for assessing achievement of special purpose. Certain formalities related to accounting and transparency must be met. The bill would also require management and directors to specify objectives for measuring the impact of the flexible purpose corporation’s efforts relating to its special purpose, and to include an analysis of those efforts in annual reports, together with specified financial statements, to shareholders and would require specified information to be made publicly available, as specified.
Attending Dreamforce 2011 in San Francisco laid bare a very apparent reality— “social” as commonly used in “social innovation” or “social media” connotes different meanings.

Defining Social

For social innovators and social entrepreneurs “social” in this context relates to a cause or public benefit, as outlined in this definition:

social – “of or relating to human society, the interaction of the individual and the group, or the welfare of human beings as members of society.” <social institutions> (Merriam-Webster definition)

For cloud computing afficianados, “social” refers to dynamic digital, linked online content, as articulated in this definition:

social – “tending to form cooperative and interdependent relationships with others.” (Merriam-Webster definition)

So, Which Is It?

It’s both, of course. The two definitions of social share a major similarity—they both involve connecting.  In the social innovation context, is connecting with communities, the environment, the downtrodden, animal welfare, civil rights, societal ills, education, underrepresented populations, and other causes or communities.

mint leaves in glassesIn the computing context, “social” refers to connecting online, through social networks, social media, and online platforms and networks that enable online exchanges easily and in real-time. It is the ability to voice a concern or praise not on an individual basis or in a vacuum, but in a crowded room, in which you are shoulder-to-shoulder with companies, manufacturers, media, various other constituencies, and other users of the product or service.

While we may try to correct those who confuse the two popular definitions of social—in reality, it may be time to somehow reconcile the connotations and allow enable the definitions to be connected.

Social relates to cause. And in today’s society, championing a cause will effectively call for an effective social content strategy.

So the next time someone asks you, “do you mean social, or social?”

Just say yes. 

It was the idea of combining two powerful concepts of entrepreneurship and social cause that inspired the start of Innov8Social. And though Innov8Social launched in 2011, the concepts have been marinating for much longer.One such concept that has shaped this site is the idea of for-profit entities that are also committed to doing good. And the more we have learned about the B/benefit corporation movement, the more compelling it has become. It is the start of a conversation on sustainable enterprise that will no doubt be epic and that has the potential to change the way we see and do business.

California’s version of the benefit corporation legislation is AB 361. And perhaps what is most appealing is the simplicity and unintrusiveness of the bill. It is voluntary—a choice for boards of directors to discuss, and for shareholders to decide.

If anything, AB 361 is starting this chat with a question…if we create a new type of business to recognize social enterprise, will they come?

Passing AB 361 lets this question be asked to California businesses and consumers. Read below to read Innov8Social’s letter of support for AB 361 to Governor Jerry Brown.

Letter of Support for AB 361
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