Does Your Investment Give You a “Living Return”?

Posted on May 20, 2013 by jraderstrong

“What I get from my investment I consider my ‘living return’ – a return paid back not only in money but also in the benefit of living in a better community.” This is how Judy Wicks, a Philadelphia entrepreneur, describes her investment in The Reinvestment Fund.

I am the CEO of The Reinvestment Fund (TRF), a community development financial institution, or CDFI, which means that we are bound by a mission to provide capital to strengthen low-wealth communities. We accomplish this through a number of means, including financing affordable housing, quality schools, healthy food access and health centers.

Our investors include people of various ages and income levels who share a common motivation – investing in their own values. Our investors want to feel secure that their money is put directly to good use in their own communities. They want a discerning lender that uses capital to strengthen neighborhoods and build healthy communities.

TRF is supported by more than 850 institutional and individual investors, who share our commitment. Established in 1985, we have become industry leaders in the field of community development, but we began with small investors like the Sisters of St. Francis of Philadelphia. Their mission, as Sister Nora Nash explains, “Is to serve those who are economically poor, marginalized or oppressed.” The Sisters saw us as a responsible choice for their retirement dollars, and they still invest with us today.

CDFIs like TRF can be a strong investment option for individuals looking to invest in their local economy. CDFIs typically have loan funds which pool resources from investors, often leveraging mission-motivated capital to attract more market-based institutional investors. On average, this leverage allows CDFIs to make every dollar do the work of $7 and the capital is invested in projects that have significant outcomes for a community such as new jobs, access to healthy food or new education options. The idea of such an investment is one that offers a social return in addition to a financial one.

Leah Pillsbury, another TRF investor, writes about this in a Grid Magazine article on harnessing the power of money for good. In the article she talks about the different approaches she has taken with her investments to ensure that they are as mindful as her spending.

While TRF’s work is primarily focused in the mid-Atlantic region, there are CDFIs across the United States that invest in community growth, many of which are supported by socially-minded individual investors. Coastal Enterprises Inc., Northern California Community Loan Fund, Montana CDC and the New Hampshire Community Loan Fund are some other examples.

Like Judy Wicks, the Sisters of St. Francis and Leah Pillsbury, I too am an investor in TRF. To me, it is an investment that demonstrates the power of organized capital to create real results. If you are considering a social investment, I encourage you to learn more about your local CDFI and the options they might provide.

Photo from The Reinvestment Fund

UnSectored: The Next Chapter

Posted on April 30, 2013 by jraderstrong

For more than a year and a half, UnSectored has been working to redefine the conversation on social change. We’ve brought people together across sectors to discuss a variety of issues–from cross-sector collaboration to the definition of social enterprise to shattering social silos–both on our blog and at our in-person events. All of this would not have been possible without your support and your continued interest in what we are trying to do.

Today, I’m pleased to announce another chapter in UnSectored’s evolution. Last fall, we re-launched UnSectored as a community platform. After a few months of seeing what this meant, we’ve decided to tweak our model further. Starting in May, we will now host “themed conversation” around one broad topic. The first one will be “Put Your Money Where Your Mouth Is” and our blogger Patrick Davis will introduce that topic on Thursday. This will be a great topic for our first themed conversation, as we are hosting our final Talk tonight on conscious consumerism. If you can join us tonight, please sign up.

This tweak to our model doesn’t change much for the experience of our community members. Each month, we will bring you new content from a variety of bloggers focused on a single issue, instead of weekly posts on a variety of topics. At the end of the online conversation series (usually at the end of the month, but potentially conversations could run longer) we will have an in-person event called “Exchanges” for community members to discuss the posts and other issues that might relate to the topic. The Exchanges will be identical to our “Talks,” but be framed by the posts on the online platform. From here, it is up to the community members to determine where they want to take the conversation.

This month’s conversation will be sponsored solely by UnSectored, but in the future we are looking to partner with other organizations to feature conversations based on their interests. If your organization would like to host a online and offline conversation on UnSectored, please get in touch.

Our first Exchange will be on May 23rd. I hope you can join us. And stay tuned for the whole month of May for some great posts on aligning your money with your values!

Again, thank you for your continuous support over this last year and a half. UnSectored would not be where it is today without your help. If you have suggestions at all, or want to get more involved, please do not hesitate to reach out and let us know.

“Reversing” Cross-Sector Leadership Exchanges

Posted on April 2, 2013 by jraderstrong

Last month, I was lucky enough to attend the White House Forum on Cross-Sector Leadership, which was co-hosted by the InterSector Project. The day was devoted to exploring the need for greater cross-sector collaboration, and how cultivating individual leaders can help bring the sectors closer together.

We spent most of the time in a design workshop hosted by Fuse Corps on how to develop a successful fellowship exchange program to encourage cross-sector leadership. During this workshop, it was clear that most people were thinking of these fellowships primarily as improving the performance of the nonprofit and government sectors, either by placing private sector leaders in those types of organizations, or by exposing social sector leaders to private sector ideas. There was not much consideration of the benefit to the private sector by exchanging experiences with the social sector.

To be fair, this is an appropriate assumption, because almost all current fellowship programs focus on improving social sector performance by gaining talent or lessons learned from the private sector. But by not considering the reverse—improving the performance of the private sector by importing leaders from the social sector—we miss out on a huge opportunity.

The InterSector Project noted this missed opportunity in the briefings for the event, saying, “cross-sector programs in the United States are primarily designed to benefit non-profit and public sectors and…focus less on how an exchange of skills and knowledge may explicitly benefit the private sector. There may be informal benefits to the private sector, but they are relatively unexplored.” I would push this further to say that there most certainly are potential benefits to the private sector, and they could be quite substantial in nature.

Consider the 2008 financial crisis. I would wager that if there were more leaders in the financial industry at that time who were less focused on short time horizons (as social sector leaders tend to be), things wouldn’t have gotten so bad. (Actually if there were just more women in the financial sector, things probably wouldn’t have gotten so bad.) As stakeholder engagement becomes more important to businesses as they grow globally and attempt to serve an ever-more socially conscious consumer base, leaders who understand how to form coalitions and work with local communities can be a huge benefit for a for-profit company. In the digital age, the simple act of developing new products requires communication and dialogue with consumers, and facilitating these conversations is a “strategic advantage” of the nonprofit sector.

Ultimately, I think people are going to start recognizing the value of importing the lessons and values of the social sector into the private sector regardless of the work being done to encourage it. Private sector managers are beginning to realize that workers are motivated by things other than financial rewards, and will structure their core activities to serve that need. And the fact that people will have around 11 jobs in their career—and the millennial generation’s increasing sector agnosticism—will create more sector-crossing individuals. Cross-sector leadership is the future, regardless of the number of fellowship exchanges promoting it.

But I do believe it is important to challenge our assumptions at every step of our transition to a more collaborative society. Which sector (or organization) can best be served by an open exchange of best practices and information? I would argue each can learn from the other, and we can’t get caught up in our preconceived notions that the private sector is more “effective” than government or nonprofits. Each has its own strengths and weaknesses that can be supported by the others. Until we have a fundamental understanding of this fact, we can’t fully transition to a truly collaborative, cross-sector society.

Photo credit: itchys

Announcing the UnSectored Advisory Board!

Posted on March 21, 2013 by jraderstrong

Today I am very excited to announce our new Advisory Board! We have a great group, and their bios speak for themselves. See all full list of all our board members below.

Our Advisory Board is a made up of a diverse group of individuals–some new to the UnSectored Community, some who have been around from the beginning–dedicated to our vision of fostering social change conversation across sectors. The Advisory Board is responsible for UnSectored’s strategic direction and meets several times a year to evaluate UnSectored’s development and core activities.

We are in initial planning stages now for our new strategic direction, so stay tuned for additional announcements in the coming months, including ways for you to get more involved!

Charles Basden

Charles Basden attended George Washington University where he attained an undergraduate B.A degree in American Studies, studying urban planning and built space and environment. He also holds a Master’s in Public Administration from the Tracthenberg School at GW with a focus on Public-Private Partnerships examining Cross-sectorial relationships. Charles currently works as an operations manager at the Center for Civic Engagement and Public Service, where he oversees a social innovation fund for students. Charles is also the founder and CEO of Duvtale LLC, a consulting practice which focuses on membership engagement for not for profits and small businesses and technology trends in education.

RJ Bee

RJ brings a wide range of experience in politics, strategic communications, policy research and media relations. He has led message and strategy development projects for a wide range of U.S. and international organizations, including the U.S. Agency for International Development and the Bill & Melinda Gates Foundation. Before joining Hattaway Communications, RJ consulted for technology companies, political candidates and nonprofit organizations. RJ earned an M.A. in International Relations from the University of Chicago and a B.A. in Political Science from the Ohio State University.

Kathy Chamberlain

Kathy Chamberlain has extensive experience working for corporations, trade associations and nonprofits, and is currently a consultant to nonprofits and other social enterprises. She is passionate about the potential for community-based organizations to create lasting, positive social change. From March 2012 through February 2013, she served as a Research Associate at the Social Innovation Fund of the Corporation for National and Community Service. Kathy has a B.A. from American University and recently completed an M.S. in Organization Development and Knowledge Management at George Mason University. She’s happiest attending live theater, museums and historical sites throughout the DC metro area, and is always up for seeing something new.

Patrick Davis

Patrick Davis is a Strategic Initiatives Officer at Calvert Foundation, where he works with investors and financial advisors to incorporate social and environmental impact into investment portfolios. Outside of his work at the Foundation, he is excited about bringing people together in DC to create a real culture of innovation. To support this vision, he’s coordinating a networking series for professionals to learn about cross-sectoral (unsectored, if you will) partnership opportunities to address social problems.

Mark Hecker

Mark Hecker is the Founder and Executive Director of Reach Incorporated. A winner of the 2011 Echoing Green Fellowship, Reach improves reading skills, across ages, by hiring and training struggling adolescent readers to tutor in DC elementary schools. Mark builds on his experience in Social Work and Education to encourage community empowerment and student engagement. When not working, Mark enjoys running, reading, and playing guitar. And, he enjoys spending time with you. Seriously, why don’t we hang out more?

Nicole Newman

Nicole Newman’s Twitter bio says it all: Trinity Grad, Community Organizer, Sister, Civic Leader, 5th Generation Washingtonian, Poet and Ready for the World. Nicole’s motto in life is simple: do what you love with all the passion and gifts in trusted to you. She currently works at Defeat Poverty DC and has spent her time working at other local non-profits. She volunteers with several groups, but loves to spend time getting to know interesting people and having coffee. She loves poetry, celebrity gossip blogs, sunflowers and chocolate. She writes from the heart about things she cares about.

Jeff Raderstrong

Jeff Raderstrong is the Founder and Editor of UnSectored and a community engagement consultant. He has run successful, long-term online campaigns in the social innovation space, such as developing and executing the social media strategy for Leap of Reason, a book on nonprofit outcomes management with over 55,000 copies distributed. He co-founded the Social Entrepreneurs of Grinnell (SEG) in college, which is now a functioning microfinance institution with an over $25,000 portfolio. In the spring of 2012, he assisted in a campaign to have SEG recognized as one of five White House Champions of Change.

Katie Rendon

Katie Rendon graduated from George Mason University with a degree in Global Affairs with a concentration in International Development and a minor in Conflict Analysis and Resolution. Katie currently serves as the Director of Programs at the George Mason Center for Social Entrepreneurship. Katie’s main focus as the Director of Programs is running the Center’s Social Innovation Program (SIP). She most recently worked for Conservation Jobs Corp in Baltimore, Maryland.

Ryan Steinbach

Ryan is the Online Manager of UnSectored. He is in his last year of undergrad business school at the University of Maryland-College Park, majoring in Marketing and Management and also a social media intern at the Newberry Group. Formally, Ryan worked as a New Media intern for Calvert Foundation. When not immersed in social media, Ryan explores and writes about social innovation and his millennial generation. If he were to ever pursue a career (wait, what’s that?), it’d be in writing, social change, and/or digital marketing.

Sally Stephenson

Sally Stephenson is the director of the Executive Office at Ashoka: Innovators for the Public. Before moving to DC, she interned with the Carter Center, the Danville Regional Foundation, and in microfinance NGOs in Colombia and Chile. She also served for a year as a Young Adult Volunteer in human service nonprofits in Atlanta. These experiences contributed to her interest in seeking collaborative and innovative ways to create social change at a systemic level. She is a graduate of Davidson College with a BA in Spanish. When taking a break from keeping up with her boss (who sleeps three hours a night!) she enjoys spending time outdoors and hosting dinner parties.

Laura Tomasko

Laura is a social infrapreneur who is passionate about developing, connecting, and improving infrastructure for lasting social change. As a network developer, she is the first member of the new network team at the Council on Foundations, where she leads an impact investing initiative. Previously as manager of public-philanthropic partnerships, she built the capacities of federal agencies interested in partnering with foundations. She is a StartingBloc Social Innovation Fellow and serves on the Fellows Advisory Committee to the StartingBloc Board of Directors. Laura holds a Master of Public Administration from the Maxwell School of Citizenship and Public Affairs at Syracuse University, where she was the Vernon Snow Fellow in Nonprofit Management, and a Bachelor of Arts from Occidental College. Follow her on Twitter.

Robert Tomasko

Robert Tomasko directs the Social Enterprise Program and holds a faculty appointment at American University, where he teaches graduate courses in corporate social responsibility, effective activism, leadership, NGO management and social entrepreneurship. Before coming to American University he was an author, business consultant, and frequent speaker at management conferences throughout the world. Over 100,000 copies of his books have been sold. He has advised clients throughout the world on issues of organization and strategy, including Coca-Cola, Exxon, Ford, Marriott, Mitsubishi, Telstra, and Toyota. His public sector clients include Auditor General of Canada, Presidential Commission on World Hunger, US Federal Aviation Administration, US Navy, and UNICEF.

Summary of “What Should the Law of Social Enterprises Be?”

Posted on February 14, 2013 by jraderstrong

We had another great Talk last month, co-hosted by the American University College of Law. This event built off of our November Talk, co-hosted with DC Net Impact, on the definition of social enterprise, with this one focusing on social enterprise law. The discussion centered on local laws regarding social enterprise–the recently-enacted DC benefit corporation legislation, as well as similar legislation in Maryland. A full summary of the discussion is below.

This week we had another Talk, co-hosted by SPACIOUS, and next month we’ll have yet another one, co-hosted by our friends at Reach Inc. They just keep coming! Look for a summary of the SPACIOUS event soon, and more information on Reach Inc Talk in the coming weeks.

Summary of “What Should the Law of Social Enterprises Be?”

The ever-present question arose once again: “What is social?” Some participants were concerned about the implications that allowing an organization to incorporate as a “social” enterprise vs. a “non-social” enterprise could create. For example, if a “social enterprise” focuses on improving its supply chain, but pays its employees poor wages, can it be considered a social enterprise? If it provides necessary goods and services to impoverished communities, but stagnates the local economy, should that be considered a “social enterprise”?
There was some discussion of the fact that currently there aren’t tax benefits to being a social enterprise, but that these benefits (and others like the ability to get grants or contracts previously reserved for nonprofits) are one of the big things being discussed right now. Some had opinions on whether such benefits were good or bad, but all agreed these tax benefits would change the terms of the discussion about what the law of social enterprises should be.
There was some skepticism about whether new social enterprise legal forms are what is really needed, or whether it would be better to reform corporate law. But there was also optimism about social enterprises, generally, whether or not the legal forms are necessary.
Generally, people agreed that there is some marketing motivating that goes into incorporating as a benefit corporation. Some thought that regardless of the legal structure, the market would support true social enterprises in the long run and prevent those just interested in marketing as such from growing too large.
For this market mechanism, to work, however, there is the need for transparency in activities and impact, as defined through standards created by third-party evaluators. However, this need for standards can also hinder ingenuity and creativity within social enterprises, especially if a traditional business is trying to make the shift to a social enterprise.
There was some desire to improve the existing benefit corporation legislation. For example, it was pointed out that business structures like LLCs currently cannot be benefit corporations in Maryland, and that there’s no reason for that restriction.
There was a general desire to understand the impact the benefit corporation laws will have, both for specific enterprises and for a more general paradigm shift in the business community, but some strong sense that the jury is still out on whether benefit corporations will be an important phenomenon or not.
It was recommended to look and see if, historically, there had been other organizational forms that had been introduced with fanfare, only to not live up to their potential to create value. If there are cases of this happening, we could potentially learn some lessons from this to strengthen the benefit corporation movement.

This is Not Who We Are

Posted on February 13, 2013 by jraderstrong

I’m beginning to realize that our institutions do not reflect who we are as people. They are not aligned with what really motivates us to get up in the morning.

Mostly, our institutions are siloed in their own work, driven by single-organization goals and short-term time horizons beholden to bottom lines. No matter if they are a for-profit, a nonprofit, or a government agency, the institutions we’ve created are mostly concerned about one thing: money. This just isn’t who we are.

Desire to create change has been shown to be a primary motivator for individuals. Edelman, the PR firm, has done extensive research on what they call “purpose” in motivating consumer behavior. They found that 87% of global consumers believe that a business needs to place at least equal weight on society’s interests as on their traditional business interests. Their research shows that purpose as a main driver in deciding what to buy continues to rise over time.

In a similar survey of Millennials, Deloitte found that almost 90% of respondents thought that business success should be measured in terms of more than just financial performance. And they also found that Millennials did not think any one sector had a monopoly on social innovation—business led the pack at 45%, but government and academic institutions also ranked high.

Clearly, people are interested in social change. They also understand that no one sector has all the answers. Unfortunately, most of our institutions do not operate as simple extensions of the people that work in them. On a whole, they have decided not to collaborate to pursue that goal we all want–to make the world a better place. And we live with the consequences: People fall through the cracks, societal ills continue to grow, and progress on our biggest issues are minimal at best.

There are exceptions, of course. The Obama administration has created a White House Office of Social Innovation that has given birth to things like the Social Innovation Fund, which combines public and private funds to scale up community solutions. Social Impact Bonds, first developed in the UK, is an innovative financial model where the government ensures financial returns for private investors if a nonprofit can achieve outcomes in a certain time period. The Start Up America Partnership, also born out of Obama’s White House, is creating start up communities across the country to nurture start-ups, boost job growth and improve America’s economic future. And smaller-level collaborations–like those in the Strive Network–are occurring across the world.

The phrase “we are all in this together” is repeated so much in the post-2008 financial meltdown social sector that it is at risk of becoming a platitude. People are beginning to realize that with strapped resources, we need to share resources and align goals if we are to overcome today’s most intractable problems.

So there is hope. But the reality is our institutions do not reflect our true nature. Humans are naturally social—we want to work together. But our organizations remain sectored. We sacrifice the potential for more effective results—greater change—by following our usual way of doing business.

What can we do? It is our nature to work together. It is our nature to want to make a difference. Now we must implement this not only in our individual lives, but in the extension of those lives: Our families, our careers, our institutions. How do we build a world where we all work together to make a difference?

Unfortunately, this is just another question we must answer. I don’t know what that answer is, but I do know how we can find it: Together. So please continue this conversation by commenting on this post, by commenting on future posts, coming to our events, and getting more involved in what we do. Without your contributions, we’ll never be able to figure this out.

Photo credit: marsmet462

Friday’s Thoughts: Walking around with no one else

Posted on February 8, 2013 by jraderstrong

“Well, now time passed and now it seems
Everybody’s having them dreams
Everybody sees themselves
Walkin’ around with no one else
Half of the people can be part right all of the time
Some of the people can be all right part of the time
But all of the people can’t be all right all of the time”

–Bob Dylan, Talking World War III Blues

Friday’s Thoughts: Not Alone

Posted on January 25, 2013 by jraderstrong

“For the American people can no more meet the demands of today’s world by acting alone than American soldiers could have met the forces of fascism or communism with muskets and militias. No single person can train all the math and science teachers we’ll need to equip our children for the future. Or build the roads and networks and research labs that will bring new jobs and businesses to our shores.

Now, more than ever, we must do these things together, as one nation, and one people.”

–Barack Obama, Second Inaugural Address, 1/21/13

Making Connections

Posted on January 23, 2013 by jraderstrong

A lot of people get confused about UnSectored. The concept is pretty lofty: social change should be the responsibility of all individuals, organizations and sectors. Nice idea, but hard to conjure up specific things an organization that has this as fundamental belief would do. Reasonably, people group that fundamental unsectored (little “u”, little “s”) belief with similar concepts–social enterprise, collective impact, cross-sector collaboration, etc.

And UnSectored is all those things. The unsectored concept has room for all methods and strategies for making the world a better place. But we aren’t about any one specific thing.

As blogger Laura Tomasko discussed in a post last fall, UnSectored is a platform “for people with very different viewpoints to learn about one another’s perspectives.” UnSectored is a meeting place for all those people interested in working for a more sustainable and just future, together with others who may not necessarily agree with their own ideas or perspectives on the world.

Nadine Riopel (better known as Philanthusiast or the Savy Do Gooder) commented on Laura’s post to describe an event she went to that had a similar aim as UnSectored:

We brought together a group of people to workshop the “how” and the “why” of what they were each doing, and to give each other feedback. The goal was for each person to go away with new perspectives on their work, and some new connections, in the interests of doing it better…

We were very explicit about not wanting to create any new initiatives or projects for anyone as a result of the event – there was no common end. We feel that everyone is already engaged in enough activity, so what’s needed is support for that work, not creation of more.

I agree with Nadine: There is already enough activity happening around social change. It is almost never a good idea to start your own organization to tackle a problem unless you have a very specific niche market and a very innovative solution to solving your own problem. Chances are, if you want to offer up a solution to a problem, there’s already someone out there doing it and doing it better than you ever could.

However, that doesn’t mean you can’t make a difference. Just because there’s a lot of activity doesn’t mean there’s enough work being done. The fact that our world is plagued with problems shows more needs to be done. The work just needs to be coordinated. It needs to be connected. Someone out there does probably have a better idea or process for solving a problem than you do. But they need help. You just need to find them.

This is what UnSectored–and similar platforms like the event Nadine attended–are doing: Making connections. UnSectored focuses on the infrastructure of personal connections that needs to be created to develop and nurture more effective social change. We make those connections through sharing ideas and hosting conversations on the blog and our Talks, but the infrastructure really gets built when we aren’t around. That happens in the time before and after our events. In the workplace and after-hours discussions of a blogger’s post. In the introductions one UnSectored community member makes to another. This is where we are shifting people’s perceptions on what social change should be, and what it needs to be.

I hope you will join us as a member of this community. Signing up for our posts and our events may seem like a small thing, but you are entering yourself into a long process of building the infrastructure between individuals, organizations and sectors to develop a more effective system for creating change.

Or, if you just want to check out what were about in a low-key, no-connections-required way, join us for our next UnSectored Talk on January 29th.

Photo credit: Philou.cn

Friday’s Thoughts: Shifting injustice to a different venue

Posted on January 18, 2013 by jraderstrong

“Networked individuals are good at starting things, but the jury is still out on how effective they are at maintaining services over time. And while there are more Internet connected devices on the planet than there are people, not everyone has a smart phone. Issues of access, equity, and skill divides still matter, they’ve just switched from wired desktops to mobile phones. Time and technological advances have shifted these justice issues to a different venue, but have made them no less important or easier to address.”

–Lucy Bernholz, Blueprint 2013

We continue our feature of Blueprint 2013, the annual social economy forecast from Lucy Bernholz. If you haven’t read it in its entirety yet, do so immediately.