For the first time, JSI staff attended SOCAP16, a conference described as the “intersection of money and meaning” in San Francisco, California. Attendees included Deval Patrick of Bain Capital, Jim Shelton of the Chan and Zuckerberg Initiative, as well as representatives from the Bill & Melinda Gates Foundation, USAID, UNICEF, GE, the Skoll Foundation, and others.
Matthew Weatherly-White of the CAPROCK Group, a financial investment fund which supports impact investing, began Wednesday’s opening session with a story. He described the difference in organ donor registration between two European countries. In the first country, where organ donation was positioned as an “opt-in” decision, 15% of individuals chose to donate their organs. In the second country, organ donors had to “opt-out,” making the intentional decision to not donate their organs. The difference, you wonder? In the “opt-out” country, 90% of individuals register as organ donors.
Weatherly-White likened this example to impact investing, stating that finance organizations should encourage a shift to impact investing, where companies have to “opt-out” of making thoughtful, socially-conscious investments rather than having to “opt-in.”
From the conference onset, it was clear that as more foundations, companies, and corporations choose to engage in impact investing, (and provide more capital to address some of the world’s social and economic challenges), or participate in shared value initiatives, the landscape of global development will continue to evolve and change.
So what is the role of global health organizations like JSI in this new and growing impact investing space?
Key players in the emerging space, including Microsoft, Accenture Development Partnerships, and CARE Enterprises, began to answer this question during a session titled “Extinction or Extension? The Role of Corporations & INGOs in Social Enterprise” where participants agreed that multisector partnerships are key for driving real social impact.
During a candid discussion of program failures, Kevin Connolly, of Microsoft told a cautionary story of what impact investments look like when driven with money, but without utilizing the expertise from experienced development partners. After making a $30,000 investment of computer equipment to a school in Lesotho, Connolly went to see how the equipment was being used. He was surprised to find a room of computers covered in a layer of dust, a clear sign of lack of use. He later learned that without electricity, the school would require the constant use of a generator to support the computers, an expense far too costly for the school’s operating budget. Without understanding the local context or operational challenges from the onset, the program failed.
Entrepreneurs, social enterprises and the private sector are welcomed in the need to develop innovations. Capital is also required and impact investing provides another avenue to channel that capital. But iNGOs can help too in delivering scale and impact. As Connolly explained, many large private sector corporations do not have the time, experience, or presence to engage in implementation, or understand the local landscape. Partners such as JSI can provide the insight and on-the-ground presence to make such an investment impactful, sustainable, and when applicable, scalable.