SOCAP10 - A Preview of Ideas and Issues - Part I

Last Friday, I sat in on a preview of the discussions and sessions that will take place shortly at SOCAP10. Hosted at the Commonwealth Club of California, the program featured many of the key people behind this year’s program. The panel included three SOCAP10 track curators:

It also included Kevin Jones, founder of Good Capital and the convener of SOCAP10, as well as Hope Neighbor, founder and CEO of Hope Consulting. The panel was moderated by Amy Benziger, who is co-producing SOCAP10.  

The panel used the recent “Money for Good”report (PDF) issued by Hope Consulting to frame specific issues related to the session tracks at SOCAP10. Having Hope Neighbor on the panel also provided us with a great opportunity to hear first-hand about the key takeaways from the study.

In highlighting the report findings, Hope started by defining impact investments as any investment that seeks to create a social or environment along with financial return. She then summarized three major findings from the report.

First, Hope stated that here is not a single social capital market - donors think of impact investing and charitable giving as separate approaches. The social capital market is young as a concept and still in its formative stage. However, we need to address needs of individual investors in order effectively build the impact investment market.

Two, (as covered extensively) there is a $120 billion market opportunity for impact investing with over half of potential individual investors interested in making investments of $25,000 or less. Potential investors cite barriers to making impact investments, but the major barriers identified in the Money for Good report reflect the fact that this is a new investment product. Importantly, these investors are also much more open to impact investment when it is not positioned as an alternative to charitable giving.

Last, there is a $45 billion market opportunity for charitable giving that more effectively meets donor needs. Access to this market is more challenging, since 86% of donors are loyal with their gifts; i.e., shifting their donation purpose will be difficult. An additional opportunity exists to get donors to use information to better inform their decisions – while 85% of the research respondents care about nonprofit performance, only 32% conducted research on the charity prior to giving and only 3% would use comparative data to make decisions on where to donate.

While much attention has been given to help donors engage in comparative data analysis (e.g., Charity Navigator, Philanthropedia, etc.), there is a market opportunity to focus on the 85% of donors who care about nonprofit performance and educate them better on how to conduct research on a charity prior to giving a donation.

So, how did the panel react to Hope’s comments? That’s tomorrow’s post.

 

Disclaimer: This post is part of a series of posts on the SOCAP10 conference. As part of the blogging coverage for the conference, I was able to register to attend at a discounted rate. A version of this post appears on the SOCAP10 blog.

 

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