As the foundation marks its 100th year this year, and as we begin our second century, we see that the operating landscape for philanthropy is quite different than it was at our foundation. 100 years ago there were few actors in what we now call the social sector and philanthropy. Today, there is a good deal more actors doing this kind of work for social good—illustrated by the crowd of passionate nonprofit leaders, social entrepreneurs and corporate innovators gathered at the Social Capital Markets (SOCAP) conference this week.
I have had the privilege to both listen and participate at SOCAP over the last few days, and offer my thoughts on how we take impact investing from a few early adopters to the early majority. The Rockefeller Foundation has spent the last six years and upwards of $40 million building up the infrastructure for impact investing to take root, including helping start the Global Impact Investing Network and the Impact Reporting and Investment Standards to provide a common framework for reporting the performance of impact investments. While there has been tremendous positive momentum it is still in its early days, particularly on a the global stage.
“The early majority will move impact investing to a more standard practice.”
I believe impact investing is indeed facing a challenge similar to what to Geoffrey Moore called “crossing the chasm.” “Crossing the chasm” relates to the challenge of scaling the adoption of a new innovation beyond the few but eager early adopters and into the broader but still early majority.
Early adopters are visionaries, enthusiasts. They are willing to take leaps of faith and evangelize a new order. The early majority is much more pragmatic. They have different needs, different mentalities, and different thresholds for abandoning tried and true methods for new-fangled ways… yet they are the ones who will move impact investing beyond a niche idea into a more standard practice.
And, they can do this in three ways:
- More goal-oriented coordination among actors that applies their comparative advantages to specific social and environmental problems.
- A new management practice within institutions will help us realize both financial and social impact.
- Rethinking paradigms to achieve greater scale.
Ultimately, we must not accept the comment of “a lot of talk, not much action” on our next report card, and so I challenge everyone at SOCAP and most importantly in the impact investing sector to continue to talk, debate, and discuss – but to act in equal amount.
— Rockefeller Fdn (@RockefellerFdn) September 5, 2013
Building on the 100 years of impact behind us, The Rockefeller Foundation will do the same.