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Jan 29, 2015

David Brooks: “Social Capitalism is a more creative and dynamic place to spend a life”

Welcome to the first blog I am putting out under the Community Investment Network of Central Ohio (CINCO) moniker.  It will be a natural continuation of the blogs I have written under Linking Mission to Money.  If you have been subscribed to the Linking Mission to Money blog, this series should continue to arrive in your inbox. 

 

Sometimes we are too prone to put a political label on activities as liberal or conservative.  The fields of social enterprise and impact investing may be forming a bridge as suggested by a recent op-ed article in the New York Times by conservative columnist David Brooks aptly titled “How to Leave a Mark.”  He ends this remarkable article with these suggestions:

  • “Right now social capitalism is a more creative and dynamic place to spend a life.
  • “If you want to leave a mark on the world but are unsure of how to do it, I’d say talk a look [at social enterprise].
  • “If you’re a high-net-worth individual (a rich person) ask your adviser to get you involved.
  • “If you’re young and searching, get some finance and operational skills and then find a way to get involved in a socially useful investment proposition.
  • “If you’ve got a business mind, there are huge opportunities to build the infrastructure (creating measuring systems, connecting investors with deals.”

Brooks is an eloquent writer who sees social enterprise as a solution to the disappointments (or failures) of the financial system and the federal government to make progress in addressing societal problems in the past decade.  He recognizes that there are people across the full political spectrum that want to find a way to use the market to solve social problems.

Yes, social enterprise is a buzz word — and it started with more hope than achievement.  Here are the problems:  too little deal flow; the economics of private investment make $250 million deals more “profitable” than $25 million deals, and certain more promising than $500,000 for a start-up social enterprise on the impoverished south side of Columbus.

We have a solution to bring the market to the social problems of Central Ohio:

  • The Center for Social Enterprise Development seeks to address the problem of an inadequate number of social enterprises who are looking for capital and can meet the commercial standards of start-up or angel investors.  We launched our programs in 2014 and are excited to announce our programs for Spring 2015.
  • CINCO Fund is our concept for a member-led fund for accredited investors to bring capital to social enterprises that need 6-figure investments, a space that micro-lending does not meet and traditional financing is not interested in.

The challenge, and the opportunity, is to bridge the approaches of the older and younger generations.  As Brooks aptly puts it: “An older generation used their (rigorous) business mind in one setting and then their (often sloppy) charity mind in another.  Today more people want t blend these minds.”  This is what I have called learning to wear your “investor” hat and your “philanthropic” hat at the same time.

 

What are you doing in your community to foster social enterprises and the impact investing necessary to make these enterprises successful?  Send me your ideas, or join us in Central Ohio.  I am waiting to hear from you. info@cincohio.com

Allen Proctor