Friday, March 31, 2006

Finance4Change session

So final day, final session of the Skoll Forum. We're in the middle of a discussion of the development of a social capital market, and Tim Freundlich of the Calvert Foundation has previewed a really interesting tool for the sector. He started out by introducing an interesting service provided by a company called Venture One. Venture One gets VCs to come and provide details of closed deals, valuation, who's backing the deal, who's on the board, etc.--and Venture One (part of DowJones) takes the data, makes sense of it and sells it back to the VCs. Calvert's interpretation for the social sector is Xigi. Most of Xigi seems to be in beta phase behind a log-in right now, but the sneak peek looks really promising. One of the things that has disheartened me in the past is how we talk about collaborating and sharing information, but so far it's been in rather expensive face-to-face discussions in Geneva, London, or California a couple of times a year. This is the first time someone has taken the very logical step of creating a virtual platform where people can post news, information -- specifically about deals in this sector. Bravo Tim -- very cool.

Christy Chinn provided interesting context -- VentureOne started out as a DB that collected information about closed VC deals -- not a marketplace.

Interesting probing around the issue of whether this issue of social capital markets is possibly monopolized by Anglo-Saxons, which led to a question about whether attempts to make an emerging social capital market global will ultimately undermine interesting initiatives like Celso Grecco's Brazilian social stock exchange [warning: site will not launch on Mac :(].

Something that has struck me here at the conference. Almost to a person, everyone here talks of supply as the supply of capital , or funders, and of demand as the demand for capital, or social entrepreneurs/project leaders. Which is 180 from the way we think of it at GlobalGiving, where supply is the supply of giving opportunities, or projects, and demand is the demand of donors for appropriate projects to give to. I think we need to do this so that we can stay focused on trying to understand donors and what they want -- but it's one more way that makes me feel like I'm swimming upstream.

Social stock exchanges discussion here at Oxford

So in the discussion today at the Skoll Forum between Peter Wheeler, Mohammed Yunus, Ron Grzywinski and Celso Grecco about developing a social stock exchange -- Peter drew attention to a possible emerging schism about whether a social stock exchange needed to be as much like the regular stock exchange as possible, or whether it's a different culture, different context, a different beast etc. And in light of Peter raising us (GlobalGiving) as a potential social stock exchange, I've been pressed to reflect where we fall on this issue -- and I think we fall somewhere in between. Mohammed is clearly in the camp that if you go to a fish market looking for oranges, you're bound to be disappointed, and I have a great deal of sympathy for that point. I do think the reasons why people are moved to give v. the reasons why people are moved to invest are different. As to why I think we fall in between, I don't believe we need to "invent" a brand new model to serve the social stock exchange. I do believe that the eBay model comes really really close. The idea that people carry out commerce within the context of a community would have sounded crazy as a pitch before eBay, but it draws on a rather deep insight about why people purchase things like collectables (as opposed to, say, groceries or toiletries). To the extent that eBay was based on the collectables market, I think it draws on people's desire to express their identity and declare their allegiance and community among likeminded people. And I think the same is possibly true of philanthropy.

I had a personal insight about this when I was listening to the presentation two days ago about MDLF and realized how moved I was to buy one of their investment notes because I wanted to actually declare my allegiance and solidarity with their cause. I rarely feel that way about my stock or mutual fund purchases. And I actually wanted to find out who else felt that way. I could do that on eBay. And I'd like to be able to do that on GlobalGiving.

Thursday, March 30, 2006

Colliding worlds

When I left my work in Russia I wondered if that world would close for ever to me. There were other things I really wanted to do but it was with deep sadness that I thought about losing those connections. Now here I am at Oxford at the Skoll Forum in my GlobalGiving identity, and for some reason Russia keeps coming back -- whether in the panel on social entrepreneurship in transition countries, press freedom in the world, and now on a panel on the rule of law in China. (By no less than Karen Tse, who has a project on GlobalGiving.) And it was bested only when I ran into an old friend -- Volodya Mau and his son Anton -- in the lobby of the conference hall. Volodya was here just to meet a conference attendee for lunch, so it was only the slimmest of chances that had me run into him. And as I reflect on the rush of gratitude I felt on seeing the work of an organization like MDLF -- and felt moved to support them especially given what they are doing in places like Russia to stop the reimposition of state control -- not to speak of my delight in seeing Volodya, I realize there's a part of me that's still back there. Or maybe more to the point, still a little bit of Russia in me. Some loyalties die hard.

Investment banking and eBay

The talk here at the Skoll Forum today and yesterday has been centered around bringing investment banking approaches into funding social entrepreneurship -- starting with Al Gore talking about his private equity firm and followed up by a series of sessions today around mobilizing masses of funds from the regular financial markets (e.g. by securitizing streams of income from microloan repayments). It crystallized for me when Jan-Olaf Willums introduced Jacqueline Novogratz from Acumen as one of the people actually getting funds for venture philanthropy from the common people -- and she had to demur by saying that Acumen probably didn't get funds from the common people, and in fact that the elite had a responsibility to help out the masses of people who live under $4 a day. And Jed Emerson noted that he had had to go back and brush up on his understanding of finance to be able to "hang" with the people he thought were key to solving the social capital market conundrum (i.e., bankers).

This makes me, of course, feel like a fish out of water. Or at least swimming upstream. The issues this panel has raised -- whether using grant funds to prime the pump to encourage private sector willingness to lend to sectors, areas, and income groups that the private sector would not otherwise lend to or invest in -- is exactly the kind of thing that the World Bank Group can and does do, and I lose heart listening to them for several reasons. First, organizations that have been officially tapped to do this sort of thing have been in this business for 50+ years and not yet made a real difference (cf Bill Easterly). So new organizations doing exactly the same thing will work only if the organizations that have been tapped to do this are structurally unsuited to the purpose or the new orgs are a lot more efficient. Second, it's demoralizing to think that the people who are notionally "in charge" (which makes me feel oddly leftist) are the only people who can make a difference. It's just a downer to think that the people with money and access are the ones who will come into save the day. Third, it perpetuates the power imbalance that has always ruled this space, and I have a hunch--which I can't prove--that somewhere, somehow, this power imbalance has a pernicious effect.

Wednesday, March 29, 2006

Recycling world bank reports

Years and years ago, one of my first bosses at the World Bank told me that he once published an economic report for Bangladesh after months and months of drafting, editing, and negotiations with the government. He was really relieved when the report was finally published, and arranged for half the reports in his office to be delivered to the government. It was only a week later when his wife bought some fish from the market, and he realized that the paper in which they were wrapped ... were pages form the country economic report that he had just gotten published. Today at the Skoll World Forum for social entrepreneurship, Bunker Roy (fast becoming a triple crown winner) noted that the hand puppets they use at the Barefoot College to communicate with illiterate villagers are also made from World Bank reports. I guess nothing goes to waste.

New legal entity for social enterprise in UK

Just learned about a really interesting new development in UK regulation of social enterprises. Community interest companies are brand new, have only been around for 6-8 months . They are like for profit companies in that there can be shareholders, dividends (capped), but they are like non profits in that if they are sold they have to be sold to another community interest company. Need to do a lot more research, but if we had something like this in the US, it would be perfect for GlobalGiving.