In 2013, Said Business School at Oxford University has launched a program of investments with social performance. The two completed courses were attended by students from over 20 different countries, representing organizations such as World Bank, KPMG, Credit Suisse and open risk capital funds, as well as philanthropic consulting firms and social enterprises. We wanted to teach them technical skills they need for expertise in specific issues and management assessment as well as financial skills to analyze investment opportunities, the development of appropriate investment tools, business structuring and multiple effects measurement. Equally important is that we are trying to expose students to some of the issues related to the creation of social change and emphasize the message that investing with social performance involves a conscious effort to positively and negatively shape human and natural capital. It also includes a somewhat different mindset than the investments for financial return. The key message is "do no harm".
This diverse group of people naturally brought very real differences in the approach to investing with social performance, and during the debate appeared some important questions:
Are we ready to talk about failure and learn from it? Many students come from a culture where failure is not talked about. Others say they are afraid to talk about the project for fear it would be attacked by competitors, or they will appear weak in front of others in a new area in which the actors are trying to establish themselves. However, experienced investors with social performance (including our teachers) argue that failure must be a part of the learning process because telling the truth can only serve to strengthen individual investments and the entire area.
What is our attitude towards partnership? Students and teachers talked about the importance of learning from other investors and the involvement of the community in the development of and testing the projects. Others disagreed, noting again the fear of competition or additional difficulty of handling a variety of partnerships or agendas when it comes to partnerships.
How to solve the expectations? Investing with social performance is a hot topic, which entails the risk of excessive promises. How to achieve that the issue continues to be hot while we remain pragmatic?
How to find a balance between our different backgrounds? Some argue that the financial background should be a priority in determining staff for investment projects, while others believe that the experience in the social sector is as important, if not more so, for the achievement of meaningful impact.
How do we define the social return? It's a difficult issue about which there is still no consent (although GIIRS and IRIS helped the kick-off talk about the tools and guidelines).
During the course of our lecture, I worked with colleagues and investors with social performance from around the world in an effort to answer some of those questions and give our students practical knowledge.rnSome things the investors with social performance should like to have known before.
In addition to my work with the University of Oxford, I conducted hundreds of interviews with investors with social performance, philanthropists and social investors from around the world about the lessons and trends in social investment. Below are some things that the investors with social performance said they would like to have known before investing:
If you come here with the question "When will I see a return?", this is not for you. Often, it takes a long-term point of view, because we are talking about a new model of development where changes may not happen in three to five years.rnInvestors from the traditional world of investment should avoid to sit at a table with fixed ideas. Investors must be willing to consult with the communities to ensure harmonization of approaches and outcomes.
Also, individuals who enter the area of
