How Social Innovation, Social Venture Capital, Community Engagement, and Social Aikido Work Together

September 13, 2015

This was a big week for Austin, Texas. “Mission Driven,” a conference on social innovation, “Philanthropitch,” an accelerator event for nonprofits, and “The Spirit of East Austin Forum,” a community forum on economic development for the historically segregated side of town, dramatically increased our community’s capacity to address social issues in innovative ways.

 

What do the three have to do with each other? Everything!

 

The week began with Mission Capital (formerly known as Greenlights) hosting the first ever Texas conference on social innovation called Mission Driven. As defined by the Stanford Graduate School of Business, a social innovation is a "novel solution to a social problem that is just more effective, efficient, and sustainable than current solutions. The value created accrues primarily to society rather than just to private individuals.” For-profit, non-profit, and government agencies can all engage in social innovation if the payoff is primarily for the social good and not just for the investor.

 

Over the past 15 years or so, venture capitalists have begun to focus their resources on pressing social issues that the markets and governments either will not or cannot solve. Venture capital has made its way into supporting innovative ways to find solutions to intractable social issues. With the beginning of the micro-loan industry for low-income entrepreneurs in India the foundations, governments, and equity firms are coming together as never before to fund and support as well as provide technical assistance to organizations that address social issues. Pay-for-Performance, stacked financing, grants, loans, equity, debt, and other types of financial instruments are being applied to provide incentive to reward collaborative efforts that move the needle in making communities (and society as a whole) healthier and more prosperous for everyone.

Austin’s Mayor Steve Adler was a keynote speaker for the Mission Driven conference along with Matthew Dowd, the ABC correspondent and social innovation investor. The Mayor sees his role as a convener who focuses the community’s will; to that end, he seeks out innovative and collaborative approaches to improve all of Austin. (We will come back to this.)

 

A highlight of the Mission Driven conference was Philanthropitch. Ten different nonprofit organizations pitched their innovative ideas to a panel of judges who awarded a total of $75,000 to the winners. The ten participating organizations were from all over the United States and Canada. Easter Seals of Central Texas won the top prize with their innovative landscaping service that is scaling up because of financing and not because of grants. Easter Seals was part of the Mission Capital Accelerator program in 2014; with the help of the Accelerator consultants and the social venture partners who worked with Easter Seals, the organization has accomplished its revenue goals in three months instead of two years!

 

Social venture capital (the pooling of funds from social venture partners) along with human capital and technical assistance are the hallmarks of the nonprofit Accelerator program. In Mission Capital’s case the nonprofits that have participated in this initiative have created sustainable revenue streams that can scale their programs to meet additional social needs without the need to go begging for grants and donations. They’ve moved beyond just targeting grants or donors for growth; they’ve used loans and other forms of financing and revenue generation to move their organizations to the next level.

 

To top off the week, Mayor Adler hosted the Spirit of East Austin (a community forum) at the Travis County Expo Center to address economic development of East Austin, the economically depressed area of the city. This was his mission in action; convening the community to create a vision that is representative of its current residents, and not just the outside investors with no emotional stake in the diverse and vibrant historic neighborhoods.

The community forum captured the frustration of citizens who want to dismantle the systematic and institutionalized racism that has lingered in Austin since the 1928 ordinance that banned people of color from living on the west side of the city. Through facilitated conversations in specific issue areas with diverse constituents, past history in community organizing and old frustrations were acknowledged, while new and engaging ideas were brought forth for City agencies to access and possibly implement. New ways of thinking about old problems were brought forward, while the past was honored. The Office of Innovation and the Office of Community Engagement and Public Relations will undoubtedly spend many hours combing through the thousands of suggestions to distill our 3000+ voices into one vision. (At least that’s the dream!)

With Austin’s entrepreneurial approach toward collective impact solutions, I look forward to seeing how Austin will create the shared vision for East Austin… and then facilitate and implement the plan that actually creates that vision.

 

What I learned this week has the potential to ripple out for years. I’ve seen a community engagement strategy in action that could yield high-value results. I’ve seen social investors reward nonprofit risk-taking, I’ve been in a room with 3000+ people who want to change the economic landscape of an entire city to benefit everyone, and I’ve watched 400 people learn about social innovation, collective impact, social enterprise, and social investing to make the world a better place for all.

 

As a parting thought about what this week means to me, reflect upon what Scott Sherman (the founder of Transformative Action Institute) calls Social Aikido. By creating a shared vision of the future with your oppositional forces, you can use those negative forces to build bridges and pathways to a better and brighter future. It is easier to move forward with allies than to push against adversaries. Help your oppositional forces see an alternative vision for the future that claims common ground and you move beyond “us versus them;” for as Abraham Lincoln asked, “Do I not destroy my enemies when I make them my friends?”

 

Transformative action is a collective process. Together, we can create a better future for all of us.

 

 

 

 

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