The Good Side of Collapsing Global Capital Markets

The collapse of global markets has its downside.  You would have to be very callous not to consider the pain suffered by homeowners, pensioners and savers.  I also fear the negative consequences will continue for many years—perhaps a generation.  I do not think our political leaders yet fully appreciate this fact.

On aspect of the crisis has been a dramatic retrenchment in terms of international investment.   Banks tend to “bring money home” during a crisis.  This instinct has been further encouraged by political pressure as Government, having spent trillions bailing out the system, is urging banks to support domestic businesses.  The developing world has been badly hit but such a withdrawal of funds, which extends to many investors—not just the banks.

I contend there is a positive side to this—the growth of local funding, or its more colourful derivation, “crowdfunding”.  By local funding, I mean that people invest in things they know or feel comfortable with—and where better to start than with their local enterprises?  The Ebbsfleet United football club was a celebrated beneficiary of this when they were rescued by the “crowd” of fans (hence the name) to the tune of £600k.  During times of great uncertainty, I contend people will favour those businesses whom they know—where they can literally “kick the tires”.  At ClearlySo we imagine this sort of funding will be a high-growth area—this has already begun.

One County Council has approached us to work with them on a “local investment initiative”—as the concern grows over bank lending.  We are also working on a project for the HCT Group, which runs community transport primarily in London and Yorkshire (we disclose this with their permission), to explore methods of broadening funding sources.  Historically they have been funded by lease finance (backed by the busses).  If it were able to tap into local community sources of finance, this could lower its costs and provide a tangible way for the people it serves to take part in the prosperity they help to create.  Watch this space—we will see a great deal of activity here in years to come!

First published in Social Enterprise Magazine in May 2009.

Partnering with Business…or Supping with the Devil?

Last November I wrote about a UK social enterprise called the Bright Ideas Trust which secured partnerships with Bank of America, The Prince’s Trust and a host of others.   These firms provide financial support (critically), credibility and a range of other services.

Technology forms such as Microsoft and Salesforce.com actively assist charities and social entrepreneurs, with free products.  Sure, it may be in their selfish interest to “hook” these firms on their products, but in the process, don’t social entrepreneurs gain access to valuable resources?

When we at ClearlySo work with professional service vendors to develop products for our social business clients, this is another way of “partnering” with businesses, and each party is considered to gain something from the exchange.

Normally the above are all considered “appropriate” business partnerships.

But in Bangladesh, Grameen struck a “dream partnership” with Norwegian phone company Telenor, to roll out a highly successful joint venture.  The deal has turned sour.  What went wrong with this business “partnership”?  Do partners turn nasty when the fruits of cooperation are great?  Not very “social”, is it?

Telecoms firms are active all over the developing world, often working with local partners.  Is this exploitation or cooperation, and what factors will help determine which it will be?  Can social entrepreneurs do anything to ensure fairness?

Are certain specific firms simply out of bounds for social enterprises?  When The Body Shop sold out to L’Oreal (part-owned by Nestle) observers reacted with rage.  “A step too far for an “ethical” company”.  Its one thing for Ben & Jerry’s to be purchased by Unilever, but Nestle…

What about other sectors?  Defence contractors?  Tobacco manufacturers?  Or banks—today’s bete noire?   Are some industry groups just beyond the pale?  Can any self-respecting social enterprise engage in a partnership with these?

What about energy companies—should social enterprises not engage with the well-regarded Shell Foundation because of some of the historically unpopular activities of its parent?  If BSkyB (Rupert Murdoch’s business in the UK) is a leader in certain aspects of working with social business—how should we view this, cynically or positively?

Partnerships with business, are they worth it or too problematic?

First Published in The Social Edge in May 2009.

Are the only innovations in social entrepreneurship Anglo-Saxon?

Are the only innovations in social entrepreneurship Anglo-Saxon?  Well, you might think so.

At the annual Skoll World Forum, (the “Davos of social entrepreneurship”) the overwhelming majority of speakers, experts and practitioners came from Anglo-Saxon countries, particularly the US and UK.  I recently attended a lecture by a well-regarded professor on social enterprise and finance.  He stated that “without a doubt the UK and the US lead the world in terms of thinking in this area”.

I found myself wondering, “Is this really true?”  Is this, perhaps, just an example of Anglo-Saxon “imperialism”, which ought to be contrary to the spirit of the world of social enterprise and finance?  Or do many of us think it is true because so much of the literature is written in English –the current “lingua franca” of the social enterprise world and the only language many of my colleagues and I can understand!  Perhaps there is indeed a large Anglo-Saxon contingent to the global “voice” on this subject, but have we got the proportions right at our global gatherings?

This is important to me because I am passionately interested in progress in the sector and believe that its pace is quickened when inputs are diverse.  If, by contrast, so many voices are Anglo-Saxon (like mine, I should confess), does this not hamper growth?  Are we not limiting our access to innovative ideas to only those which might spring forth from an “Anglo-Saxon” mindset?  Also, are there not ways to deploy social networking technologies to harness a broader range of views?   Even if we persist in writing in English can we not at least tap into a broader range of voices by nationality?

There is openness to models from the developing world.  But in many cases these models are deployed by Anglo-Saxons who move to these poorer countries.  Does this represent then a diversity of thinking or not?

Continental Europe and Japan represent an enormous proportion of global economic activity—yet their voice regarding social entrepreneurship is far more limited.  Is this because there is not much going on or because we just do not know where to look, or have limited access because of linguistic barriers?

First published in The Social Edge in May 2009.