I attended this conference for a few reasons--first to evaluate emerging forms of capital/funding and new organizational structures. Second was scaling--that is the buzz now, everyone talking about scaling. Sadly, 90% of social enterprises can't scale because of access to growth capital, distribution, or regulation. The third reason is that I want to generate a match for a large investment Google made in Anita Borg Institute, so I am beginning to think about what story we can tell that is interesting/compelling. Fourth was to begin to interject ABI's name within this community. And lastly poking around for talent--just talking to folks.
I haven't been to this conference for about 5 years, and what I noticed immediately is that there are newer, more interesting models taking over this space. I go to a social capital conference in the fall held at Ft Mason--SOCAP10 Social Capital Markets Conference and it is very cutting edge, with industry, financial, practioners, all together. The social enterprise alliance conference I am at today feels very nonprofit-centric--very few industry folks, no banks, etc.
Scaling and capital were most impactful. We are using a micro franchise model for ABI's GHC India conference and for our US GHC regionals, which I didn't really know. Franchise is a great scaling tool.
Re capital, ABI already has track record of successfully using debt as a tool which many nonprofits and ngos are really afraid to do. However there are some very interesting funds--one in particular based in Philadelphia www.opportunityfinance.net. I talked to EVP about financing. I am also interested in mezzanine debt, which is another name for subordinated debt, or funders willing to take a 2nd or even 3rd debt position.
There is a new model of social enterprise emerging in US called a L3C--a low profit limited liability company. This is a hybrid for profit nonprofit model. 5 states have approved this model--all the profits have to get plowed back into the organization, and the profits must fit with the mission of the organization. For the first time, you are seeing foundations offer PRIs (program related investments which are foundation loans at 0-2% interest. These are not grants). I think this L3C model is going to grow significantly over next few years, esp if nonprofits end up having to pay income tax in some form, which 22 states have on the dockets right now in light of the decline in tax revenues the states are facing.
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