I read last week about the main TV networks’ concerted efforts to promote volunteerism in their shows and programs vs. through Public Service Announcements (PSAs) as it is usually the case. The USA Today article gives some details about iParticipate, a multi-year campaign that is the brainchild of the Entertainment Industry Foundation and took place all of last week across major TV networks in the US.
The major difference with PSAs (the campaign includes straightforward PSAs as well) is that this time messages promoting volunteerism or community service were included in the shows’ actual story lines. The article points out that it was actually easy to convince show producers to come on board and there was none of the usual battle and nastiness between networks.
We’ll have to see what impact this initiative is going to have. I’d be curious to hear whether anyone noticed the “convergence” of messages with the same tone and content – this is quite unusual, isn’t it? A barrage of goodness… But obviously, if down the road more folks are inspired to get involved in their communities and give back, that will be all nice and good. We’ll be happy.
However, there are a couple of things that do not feel quite right here. First, I do have a slight problem with the fact that this initiative was conducted unbeknownst to most viewers (not everyone had a chance to read the USA Today article or visit the iParticipate web site). Would the message be as effective if viewers knew? Not sure. I feel a bit odd knowing that some message – however valuable – was fed (force-fed?) to viewers without proper warning with a view to influencing them. Who said manipulation?
Also, can’t we keep entertainment and good intentions separate? I understand that working on the story lines per se may be more effective than delivering straight PSAs with viewers. But this is a TV show – it’s entertainment!! Imagine my neighbor next door – it is Thursday night, she wants to watch a comedy show to relax. It is her downtime. She just wants to let her hair down. At that very moment, she may not care that much about saving the world or helping the needy – maybe she just does not want to think about it right then. When I watch Extreme Makeover Home Edition which is about generosity and the trickle down effect that being good to others creates, I want to be moved by these acts of generosity and gratefulness. I have fun watching the show and seeing the awesome houses built for those nice folks!! That is indeed entertainment but it is also my choice to watch Ty and his team bring happiness to others.
So, kudos to the entertainment industry (don’t like this picture on their web site by the way) but maybe we want to keep all the goodness blurb separate from our favorite shows’ story lines.
Saturday, October 31, 2009
Monday, October 19, 2009
Where is the consensus on healthcare?
I heard report of what President Obama said about insurance companies in his weekly radio address and what the GOP response was, i.e. we would have access to more limited choices and the government would control (meaning constrain) our access to doctors and quality care if the healthcare bill in preparation were to pass.
That really made me angry to be honest with you…
· Angry at both Republicans and Democrats: why is it that I feel like neither Republicans nor Democrats are trying really hard to reach a consensus and come up with a landmark bill that will improve the way healthcare is provided in the US whereas there is a general consensus that the system in this country is not good enough by a long shot?
· Angry at Republicans: How can Republicans use scare tactics again to demean a bill that as far as I have heard is unlikely to bring about anything that the GOP representative mentioned? Well, they know scare tactics works – it has been very effective historically and it is not necessary to go back to the dark days of McCarthyism to realize this. Anyone who was in the US in the couple of years after September 2001 knows it in his/her guts.
· Angry at Democrats: it is easy and it feels good to bash Republicans but is it fair to hold only Republicans responsible for another mostly partisan bill despite its historic significance? Was Ted Kennedy the only one who could do bipartisan politics among Democrats?
· Angry at Obama: wasn’t he supposed to do politics differently? Yes, he is trying and I certainly give him credit for that. But this is not working so far and even though it is not only his or his administration’s fault, at the end of the day history will only remember the outcome of this, thus he has to try harder.
Ok, that is a lot of “politics bashing” but it does bug me that elected officials continuously discredit themselves and in the process make the general public increasingly cynical and distrustful. Or maybe I am being too negative…
That really made me angry to be honest with you…
· Angry at both Republicans and Democrats: why is it that I feel like neither Republicans nor Democrats are trying really hard to reach a consensus and come up with a landmark bill that will improve the way healthcare is provided in the US whereas there is a general consensus that the system in this country is not good enough by a long shot?
· Angry at Republicans: How can Republicans use scare tactics again to demean a bill that as far as I have heard is unlikely to bring about anything that the GOP representative mentioned? Well, they know scare tactics works – it has been very effective historically and it is not necessary to go back to the dark days of McCarthyism to realize this. Anyone who was in the US in the couple of years after September 2001 knows it in his/her guts.
· Angry at Democrats: it is easy and it feels good to bash Republicans but is it fair to hold only Republicans responsible for another mostly partisan bill despite its historic significance? Was Ted Kennedy the only one who could do bipartisan politics among Democrats?
· Angry at Obama: wasn’t he supposed to do politics differently? Yes, he is trying and I certainly give him credit for that. But this is not working so far and even though it is not only his or his administration’s fault, at the end of the day history will only remember the outcome of this, thus he has to try harder.
Ok, that is a lot of “politics bashing” but it does bug me that elected officials continuously discredit themselves and in the process make the general public increasingly cynical and distrustful. Or maybe I am being too negative…
Does Social Investing’s Success Mean Impact? (II)
See Part I below
Overall, the systemic or macro effect of those funds remains limited today, if not marginal. Despite the publicity that an Acumen has benefited from, the fund’s portfolio does not comprise more than about 25 companies. Root Capital that has grown rapidly over the past 5 years and now has a portfolio of 235 borrowers for $120m disbursed has spread its investments over 30 countries (source: Root Capital’s and Acumen’s web sites), i.e. an average of $4m per country since its inception in 1999. And when looking at a company’s environmental impact, how meaningful can it be – even if that enterprise’s area of intervention is a well-delimited territory – if that entity is the only one in that region trying to improve biodiversity health?
I am the first one to recognize the pioneering role that those funds are playing today. If social investing becomes a much larger industry some day, we will all have to be thankful to those entities. They are pathfinders and not only are they showing the way to those interested in creating investment vehicles but also they offer small- and medium-sized enterprises a better alternative to other forms of financing that generally revolve around less suited options such as microfinance (loans are too small for their size) and commercial banking (rates are high and those banks may not want to take a chance on relatively untested enterprises).
So yes, arguably, the systemic impact is there. But the actual macro effect of those enterprises remains minor because overall maybe a couple hundreds companies have received money from social investment funds so far – does that ever get to one tenth of a 1% of those countries’ GDP?
Now, it is not unheard of that an asset class becomes financially popular before it actually proves its value or merit. After all, the bet of those who invested in venture capital in the 80’s and 90’s was that that industry would be able to generate returns that were way above those of other asset categories.
However, the cause of social investing would be greatly helped if a few things were to happen:
· Set up a mechanism among major social funds to share and consolidate their information around impact: it should be relatively easy to find funders interested to pitch in.
· As a prerequisite, those funds should agree on simple metrics around the “straightforward stuff”: investees’ financial success, social indicators such as average / median household in communities affected or number of jobs created.
· Find a “home” to showcase those aggregate results. Maybe the White House’s Office of Social Innovation could be the right place (visibility would be great) - or some prominent foundation interested in the matter.
· Accelerate the pace of strategic investments: this is the way the impact magnitude issue could be addressed. Most funds organize their work by sector but there is a difference between supporting enterprises here and there and having an explicit strategy of - for instance - focusing only on innovative solutions that cover the whole gamut of existing and emerging technologies in energy or sanitation.
Being in the social enterprise trenches (sic), I feel that social investing will be successful, both money and impact wise. But let’s not get ahead of ourselves and let’s make sure we put in place the key ingredients that will bring about success before marveling about the “next big thing”…
Overall, the systemic or macro effect of those funds remains limited today, if not marginal. Despite the publicity that an Acumen has benefited from, the fund’s portfolio does not comprise more than about 25 companies. Root Capital that has grown rapidly over the past 5 years and now has a portfolio of 235 borrowers for $120m disbursed has spread its investments over 30 countries (source: Root Capital’s and Acumen’s web sites), i.e. an average of $4m per country since its inception in 1999. And when looking at a company’s environmental impact, how meaningful can it be – even if that enterprise’s area of intervention is a well-delimited territory – if that entity is the only one in that region trying to improve biodiversity health?
I am the first one to recognize the pioneering role that those funds are playing today. If social investing becomes a much larger industry some day, we will all have to be thankful to those entities. They are pathfinders and not only are they showing the way to those interested in creating investment vehicles but also they offer small- and medium-sized enterprises a better alternative to other forms of financing that generally revolve around less suited options such as microfinance (loans are too small for their size) and commercial banking (rates are high and those banks may not want to take a chance on relatively untested enterprises).
So yes, arguably, the systemic impact is there. But the actual macro effect of those enterprises remains minor because overall maybe a couple hundreds companies have received money from social investment funds so far – does that ever get to one tenth of a 1% of those countries’ GDP?
Now, it is not unheard of that an asset class becomes financially popular before it actually proves its value or merit. After all, the bet of those who invested in venture capital in the 80’s and 90’s was that that industry would be able to generate returns that were way above those of other asset categories.
However, the cause of social investing would be greatly helped if a few things were to happen:
· Set up a mechanism among major social funds to share and consolidate their information around impact: it should be relatively easy to find funders interested to pitch in.
· As a prerequisite, those funds should agree on simple metrics around the “straightforward stuff”: investees’ financial success, social indicators such as average / median household in communities affected or number of jobs created.
· Find a “home” to showcase those aggregate results. Maybe the White House’s Office of Social Innovation could be the right place (visibility would be great) - or some prominent foundation interested in the matter.
· Accelerate the pace of strategic investments: this is the way the impact magnitude issue could be addressed. Most funds organize their work by sector but there is a difference between supporting enterprises here and there and having an explicit strategy of - for instance - focusing only on innovative solutions that cover the whole gamut of existing and emerging technologies in energy or sanitation.
Being in the social enterprise trenches (sic), I feel that social investing will be successful, both money and impact wise. But let’s not get ahead of ourselves and let’s make sure we put in place the key ingredients that will bring about success before marveling about the “next big thing”…
Does Social Investing’s Success Mean Impact? (I)
I have been meaning to write a short piece on social investing and impact and since this is going to be a longer text than in other entries, it will come in two installments.
It is interesting to compare the success that social investing has been enjoying, as an asset class and as a career path in particular, and the impact that companies that have received funding from those entities have actually had so far. As a result of last year’s financial meltdown, the creation of appropriate investment vehicles, and an increasing interest among many (young and old) in addressing social issues, the whole gamut of social investment funds have gotten a lot of attention lately. It is commonplace to hear that whatever their business models (returning money to investors or not, and if so, serving below-market, at-market, or above-market returns) funds find it pretty easy to raise capital these days.
Also, social investing in its hybrid form represents a very compelling value proposition for young professionals who want to do good and do well, as it supposedly constitutes the perfect combination of for-profit rigor and efficiency and social impact. I have seen first- hand how so many “Millennials” contemplating careers in business are almost magnetically drawn to that career option. And this is probably true also for a lot of us, even those with grey hair (yes, I know, how did that happen?), who have had hybrid careers and believe that market mechanisms can bring about social change when used appropriately.
However, the magnitude of the impact that those social venture funds have through the enterprises they support remains a question mark. Funds like Acumen, Root Capital, E+Co, or Verde Ventures take impact measurement very seriously. Since they mostly receive grant and/or subsidized money, their “raison d’être” is more about the impact they can show than about attractive returns they can serve. Those funds’ web sites certainly try to be informative on the subject. E+Co measures the impact of its clean tech investees by tracking 34 social, financial, and environmental indicators and has a very straightforward section on its web site showing numbers related to the three sets of indicators. Acumen Fund explains its BACO (for "best available charitable option") methodology on its web site but does not elaborate on its portfolios’ actual impact. In order to quantify its investments’ social impact, Acumen compares them to the universe of existing charitable options for that explicit social issue. Root Capital shows cumulative results on its web site (number of loans and borrowers, repayment rate, but also organic agriculture under cultivation or number of farmers reached).
Today social and environmental monitoring remains expensive and there are no cases that I know of where investees are the ones paying for that cost. Monitoring is expensive because of its frequency and complexity. Most funds have set up declarative monitoring processes whereby portfolio companies report on a series of indicators previously agreed upon with the funds. However, a couple of times a year, those funds have to send their staff or external consultants to check impact for themselves. Also, while social monitoring can be relatively straightforward if such indicators as number of jobs created or variation in income of families impacted are used, environmental evaluation is more complex and time-consuming. Thorough baseline studies presenting biodiversity health status of the area affected have to be carried out before relevant measures of what is expected to improve can be determined. Moreover, it is inherently difficult to isolate the impact on biodiversity health of actual actions undertaken by the companies involved as other factors may come into play.
Thus, social investment funds are up against a double pressure of having to raise grant money to pay for M&E (whatever money they make out of their investments is rarely enough to pay for the whole monitoring cost) and showing those funders and the rest of the world the social and environmental benefits generated by the enterprises they are backing.
It is interesting to compare the success that social investing has been enjoying, as an asset class and as a career path in particular, and the impact that companies that have received funding from those entities have actually had so far. As a result of last year’s financial meltdown, the creation of appropriate investment vehicles, and an increasing interest among many (young and old) in addressing social issues, the whole gamut of social investment funds have gotten a lot of attention lately. It is commonplace to hear that whatever their business models (returning money to investors or not, and if so, serving below-market, at-market, or above-market returns) funds find it pretty easy to raise capital these days.
Also, social investing in its hybrid form represents a very compelling value proposition for young professionals who want to do good and do well, as it supposedly constitutes the perfect combination of for-profit rigor and efficiency and social impact. I have seen first- hand how so many “Millennials” contemplating careers in business are almost magnetically drawn to that career option. And this is probably true also for a lot of us, even those with grey hair (yes, I know, how did that happen?), who have had hybrid careers and believe that market mechanisms can bring about social change when used appropriately.
However, the magnitude of the impact that those social venture funds have through the enterprises they support remains a question mark. Funds like Acumen, Root Capital, E+Co, or Verde Ventures take impact measurement very seriously. Since they mostly receive grant and/or subsidized money, their “raison d’être” is more about the impact they can show than about attractive returns they can serve. Those funds’ web sites certainly try to be informative on the subject. E+Co measures the impact of its clean tech investees by tracking 34 social, financial, and environmental indicators and has a very straightforward section on its web site showing numbers related to the three sets of indicators. Acumen Fund explains its BACO (for "best available charitable option") methodology on its web site but does not elaborate on its portfolios’ actual impact. In order to quantify its investments’ social impact, Acumen compares them to the universe of existing charitable options for that explicit social issue. Root Capital shows cumulative results on its web site (number of loans and borrowers, repayment rate, but also organic agriculture under cultivation or number of farmers reached).
Today social and environmental monitoring remains expensive and there are no cases that I know of where investees are the ones paying for that cost. Monitoring is expensive because of its frequency and complexity. Most funds have set up declarative monitoring processes whereby portfolio companies report on a series of indicators previously agreed upon with the funds. However, a couple of times a year, those funds have to send their staff or external consultants to check impact for themselves. Also, while social monitoring can be relatively straightforward if such indicators as number of jobs created or variation in income of families impacted are used, environmental evaluation is more complex and time-consuming. Thorough baseline studies presenting biodiversity health status of the area affected have to be carried out before relevant measures of what is expected to improve can be determined. Moreover, it is inherently difficult to isolate the impact on biodiversity health of actual actions undertaken by the companies involved as other factors may come into play.
Thus, social investment funds are up against a double pressure of having to raise grant money to pay for M&E (whatever money they make out of their investments is rarely enough to pay for the whole monitoring cost) and showing those funders and the rest of the world the social and environmental benefits generated by the enterprises they are backing.
Saturday, October 10, 2009
Dynamite Barack
I was a bit stunned when I read about Barack Obama winning the Nobel Peace Prize yesterday. My reactions (in order) were: what??? – then great!! – and well, there could be a backlash here. And oh yes also, I thought, Bill Clinton must be fuming (and that made me laugh…).
The main explanation for the Prize seems to be around providing encouragement to Obama for him to continue the good work he has started, especially around putting diplomacy back in the picture front and center (a stark departure from his predecessor) and making early efforts on nuclear weapons reduction (ongoing negotiations with Iran). Obviously, we should not forget how appalling the image of the US overseas was when Bush was around and how that has changed in not even a year. Now, I can’t say that the other accomplishments measure up with those of previous winners but yes, I get it, it is about encouraging him.
It has been interesting recently, including following the skit on Saturday Night Live (SNL) last week during which the actor playing Obama essentially said that he had done nothing since becoming a President, to start hearing here and there (among his supporters too) that actually, not much had been accomplished since January. Those same folks seem to agree that a lot has been started but are we seeing results? Don’t want to get into this question now (I actually think there have been some significant accomplishments though I have my frustrations with this administration) but my point is that the tremendous pressure that comes naturally out of receiving such a high honor will only be compounded by this insidious impression circulating that we have not seen much yet. And this could create a backlash for Obama.
PS. For the intellectuals among you, you will have noticed the oh so subtle reference to Alfred Nobel in the title of this posting, the inventor of dynamite and creator of the Nobel Prizes. But the Peace Prize is actually awarded by Norway now (not Sweden) – so yeah, you can call me on that one…
Oh by the way, talking about intellectuals and subtle references, one of my students used the word “self-effacement” the other day – that was nice. Rarely hear that word mentioned – maybe a combination of lack of vocabulary and lack of self-effacement…
The main explanation for the Prize seems to be around providing encouragement to Obama for him to continue the good work he has started, especially around putting diplomacy back in the picture front and center (a stark departure from his predecessor) and making early efforts on nuclear weapons reduction (ongoing negotiations with Iran). Obviously, we should not forget how appalling the image of the US overseas was when Bush was around and how that has changed in not even a year. Now, I can’t say that the other accomplishments measure up with those of previous winners but yes, I get it, it is about encouraging him.
It has been interesting recently, including following the skit on Saturday Night Live (SNL) last week during which the actor playing Obama essentially said that he had done nothing since becoming a President, to start hearing here and there (among his supporters too) that actually, not much had been accomplished since January. Those same folks seem to agree that a lot has been started but are we seeing results? Don’t want to get into this question now (I actually think there have been some significant accomplishments though I have my frustrations with this administration) but my point is that the tremendous pressure that comes naturally out of receiving such a high honor will only be compounded by this insidious impression circulating that we have not seen much yet. And this could create a backlash for Obama.
PS. For the intellectuals among you, you will have noticed the oh so subtle reference to Alfred Nobel in the title of this posting, the inventor of dynamite and creator of the Nobel Prizes. But the Peace Prize is actually awarded by Norway now (not Sweden) – so yeah, you can call me on that one…
Oh by the way, talking about intellectuals and subtle references, one of my students used the word “self-effacement” the other day – that was nice. Rarely hear that word mentioned – maybe a combination of lack of vocabulary and lack of self-effacement…
Thursday, October 1, 2009
Kanye and My Mother
I was in Europe last week and I got there just after Obama had commented Kanye’s outburst at the Music Video Award ceremony (timely by the way that he did that just before he was supposed to be one of the first guests of Jay Leno’s comedy show – by the way, I still don’t get how different that show is from what he was doing on the Late Night…). Not only was the US media inundated with the Kanye thing (sic) – Dr Phil was on Larry King Live to give his two cents on this important national issue – but when I got to Paris, my mother asked me what was going on with Obama lashing on that guy (she had no idea who Kanye was by the way…) and said it had been all over the news in France in the past 2 days…
Alright, people – I am sorry but this is the side effect of globalization. With no filter for relevance, the most unimportant news is crossing the pond and traveling to the city of lights and beyond – I am sure the Kuala Lumpur tabloids did their home pages on Kanye’s outburst too… I am not a media basher most of the time but Kanye taking the mike from that poor girl, a matter of national (international!!) importance, really??
I am all for having fun and blowing some steam off after completing a boring task or discussing a serious or difficult issue. But Kanye trumping healthcare reform, wow, Larry King and others in the country + media around the world, you are not doing your job properly here…
Alright, people – I am sorry but this is the side effect of globalization. With no filter for relevance, the most unimportant news is crossing the pond and traveling to the city of lights and beyond – I am sure the Kuala Lumpur tabloids did their home pages on Kanye’s outburst too… I am not a media basher most of the time but Kanye taking the mike from that poor girl, a matter of national (international!!) importance, really??
I am all for having fun and blowing some steam off after completing a boring task or discussing a serious or difficult issue. But Kanye trumping healthcare reform, wow, Larry King and others in the country + media around the world, you are not doing your job properly here…
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