The Wisdom of Crowds (Funding)

Looking up the trunk of a Yellow wood (Armarillo) tree in PanamaLast Thursday, the US Senate approved the JOBS Act, a piece of legislation that would make it easier for small businesses to raise financing. The bill was passed in the House a few weeks ago, and now, with the Senate’s changes, will go back to the House for debate and (hopefully) approval. It would then move to President Obama, who has already said he will sign it into law.

From our perspective, the bill represents a couple of features that would enable smaller investors to access the forestry investments marketplace.

Click to read more ...

J.P. Morgan/GIIN report on impact investment

Measuring the growth of a four year old treeIn December, investment bank J.P. Morgan released a report with the Global Impact Investing Network (GIIN) detailing interviews with 52 impact or potential impact investors. Impact investing represents roughly $4 billion in market potential in 2012, and is expected to capture potentially 5-10% of all investment in a decade.

The survey aims to uncover impact investor motivations and provide a more transparent view of the overall industry by analyzing investor responses to questions ranging from return expectations to investment motivations to topical investment focus. So what do investors think of the impact investing space? Here are some of the more interesting takeaways, from our perspective.

Click to read more ...

Four recommendations for social businesses and nonprofits

Advisory Board member Ned Symes stands with a spiny cedar tree in PanamaLast Wednesday I had the opportunity to sit down with some grad students at American University's International Training and Education Program (ITEP) to discuss social enterprise.

The goal of the discussion was to give up-and-coming entrepreneurs a sense of the challenges behind starting and managing a nonprofit or mission-focused business. Three former ITEP students who have gone on to start their own enterprises also helped lead the discussion.

The two nonprofits represented, Access to Success and Simply Equal Education, are both young and obviously passionate about their work. As they described the challenges they were facing, I thought back on our own version of those same challenges. That's not to say that we're not still dealing with some of them—maintaining a flow of operating capital, managing our operations efficiently, and mission creep to name a few—but now we have the benefit of viewing our early mistakes in hindsight.

Some of the recommendations that came out of our discussion include:

Click to read more ...

Are we really measuring impact?

Antonio and his wife with their new babyHaving read various Duflo and Banerjee papers (see their book Poor Economics), I understand the frustration expressed in this blog post about measuring impact investments. As the post author Anya Kamenetz points out, in measuring our efforts social entrepreneurs incorrectly equate monitoring impacts with measuring the actual impacts created by the initiative.

I’ve always been a bit exasperated by the talk of impacts, and I suspect other social entrepreneurs are, too. It’s tedious to fill out impact performance metrics, especially when those metrics aren’t directly applicable to your project. That doesn’t mean we don’t believe our projects are making a difference or that monitoring isn’t important to do. It’s just that some of the “apples to apples” metrics that allow investors to easily compare projects don’t really quantify the actual impacts.

Click to read more ...

Is social investment guilt-driven?

I recently came across an article by Thomas Kostigen on MarketWatch, called "Investment driven by guilt, and that’s good". He suggests that the impressive growth of socially responsible investing is being driven by guilty investor consciences.

Kostigen makes generic statements about investor motivations and the growth of "social investing" that only confuses the argument and encourages readers to blast him from every angle. Aside: you've got to wonder if the Dow Jones-published MarketWatch (ahem, NewsCorp owned) just runs this blog to entice its readers with fresh liberal meat - most of the comments are scathing.

Click to read more ...