Domestic social impact investment is stuck. Each year a few deals trickle through, but despite the potential and promise, impact investments in the US are rare, complex, and entirely bespoke. To be sure, there are structural challenges to growing the market in the US – just look at Tracy Palandjian’s recent SSIR article on the state of the social impact bond sector – but I can’t help feeling that we’re suffering as much from a failure of imagination as infrastructure. The problem is, few social entrepreneurs can clearly describe their impact capital needs, while few potential investors understand how to place impact capital into deals. I mean, if neither side really knows how to go about its business, how can we expect them to do business with each other?
In the callow youth of the nonprofit sector, you needed two kinds of capital: (1) financial capital, because money does, after all, grease the wheels of change, and (2) social capital, because proving you could fill the courthouse steps or get the Governor to answer your call was a way to make up for not having enough money. But the NPO sector is burgeoning, the capacity for evaluation is still limited, and the power of social media has grown. Now there’s a new kind of resource you need: conceptual capital. It’s the stuff that drives your visibility in a crowded marketplace. So what is it, why do you need it, and where do you get it?
Dear reader, as part of a special report for Shelterforce I sat down with the heads of four of the largest community development intermediaries in the country and asked a simple question: Are you still relevant?
This six part series looks at the evolution of their role in the community development sector and their strategies for the future.
As I was saying, there are plenty of people who want to give your organization money. Seriously. Lots of it. There is, of course, a catch: you have to give it back.
Understandably, this stops most nonprofit executive directors in their tracks. It’s no mean feat to raise the prodigious amounts of grant funding needed to run one of these juggernauts as it is. It requires stamina, persistence, a LOT of friends, and just a touch of maniacal charm. Now, the frazzled ED asks, you want me to spend a huge amount of time raising money I have to pay back?
There’s just one problem: the sector needs deals. Badly. And they really want nonprofits to take the lead on proposing and structuring those deals. That’s right, you.
So, what if someone gave you $5 million, and then asked for it back? What would you use it for? How would you advance your organization’s mission? How would you insure repayment? Perhaps most importantly, how could you use this opportunity to grow?