Funding Social Change: Get the gist on the future of Social Financing
Introduction
Social Financing is an emerging trend that involves a variety of innovative new methods of solving social challenges while generating financial returns for investors. Social financing is creating new partnerships between stakeholders from the private sector and traditional social services organizations.
Historically, creating and running programs to help solve social challenges has been the realm of government institutions and non-profit organizations. There are programs to help reduce poverty, provide financial aid, transition prisoners back into society, reduce the number of teen pregnancies, etc. The success of such programs varies greatly and can be extremely costly to implement and manage.
Today, interest in solving social problems is increasing from private investors, businesses, and entrepreneurs, bringing a new group of stakeholders with unique and practiced methods of solving problems to the social services arena. These individuals are exploring innovative new ways to fund and create positive social change. They are creating market based tools and forming partnerships with the traditional social service organizations and non-profits.
These social entrepreneurs bring practices from the business world and apply them to the world’s pressing social challenges. Although creating a positive social impact is a primary goal of these ventures, a financial return is still sought. With that in mind, investors will likely create programs and partner with organizations that have proven track records and a high probability of success. This has the potential to transform social programs by bringing more accountability and measurability to the industry.
Social Financing could very well be the future of funding social change. This Gist will describe the baseline scenario for Social Financing and suggest a number of concerns and variables to monitor.
- Social finance will be able to capitalize a new generation of high impact social innovation. The Social Purpose Capital Marketplace: An Opportunity for the Canadian Charitable Sector
- Significant capital could potentially be available to finance social innovation given the current and anticipated influx of new wealth donors and socially motivated investors.
- There is a good chance that within the next 40 years, the innovative capacity of societies and governments will become at least as important a differentiator of national success as the innovative capacity of economies. Social Innovation: What it is, Why it Matters and How it Can Be Accelerated
- The establishment of incubators which focus on social innovation will bring together expertise and knowledge from across different sectors and from different European and non-European countries. Financing Social Impact Funding Social Innovation in Europe – Mapping the Way Forward
- Social innovation is both a business and societal opportunity.
- Date modified: