First of all, let’s talk about what this book isn’t.  It is NOT about impact investing, social capital markets where non-profits are traded, or other “answers” to the grind of philanthropic funding.  I probably could have figured that out by Saul’s other works, which includes Benchmarking for Non-Profits, but I think a part of me wanted this to be some kind of ground-breaking new idea to raise money to do good in the world.  It’s not.

That said, I enjoyed this book for what it is: a very straightforward, practical guide to selling non-profits impact.  Saul divides potential funders into two categories: psychic donors, who donate for personal or emotional reason, and impact buyers, who are purchasing the value a non-profit provides.

Psychic Donors

Most of us are familiar with the first category- family foundations with a personal connection to a cause, individual donors who are moved by a campaign.  However, Saul includes basically all foundations, even large, professionalized organizations, because they do not quantify the value their investment/ donation creates.

Impact Buyers

Saul is saying that all non-profits should start to think about how to “sell their impact”, rather than count on appealing to the fickle emotions of funders (he does recognize that foundations will remain a part of the funding mix for most organizations).  For example, Ronald McDonald House provides housing and support for many families receiving hospital treatment.  They had a loose relationship with the hospitals they supported, until they found a way to show that 1) they raised the reputational status of these hospitals, and 2) they improved the patient outcomes.  With this data in hand, they were able to create a stronger relationship with hospitals, which (of course) included more funding.  The hospital was purchasing what they were creating, rather than including them in a list of charities to which they give money.

Putting it to Use

The rest of the book goes step-by-step through defining stakeholders, measuring value, and making the “sale”.  It’s useful advice, which I plan to put into use on one of my side projects finding new funding for DesignWise Medical, last year’s runner-up in the Mosaic Social Entrepreneurs Cup.  DesignWise uses donated resources, including a lot of student volunteers and retired engineers, to design pediatric medical devices for markets too small to be profitable.

I’ve been brainstorming what value we could sell, and to whom.  Here are my top ideas:

• sell hands-on student engineering experiences to colleges
• sell professional skills-based mentorship experiences to organizations serving retired people (AARP?)

Of course, DesignWise already plans to sell the designed devices and use the earned income to fund more products.

Anyone have any other ideas? I’d love to hear them!!

This podcast officially launches Podcasts with a Porpoise!

In this episode, we chat with Thomas Schumacher and Ann Hall, members of the Boneshaker Books Collective.   Boneshaker Books is a non-profit bookstore located in the Seward  neighborhood of Minneapolis.

• Boneshaker Books
• Vegan Valentine’s Dinner Fundraiser- SOLD OUT

The Giving Key Necklace ($30)

The Giving Key employs the homeless to create unique necklaces designed to be owned only temporarily, and then given away to someone else.  Each one is unique!

Youth Venture’s tr3s Bling Necklace ($19.95)

Support young changemakers by purchasing this deceptively simple necklace.  It reads ‘I AM A CHANGEMAKER’ and the magnetic pieces allow you to wear it in dozens of ways.  I own one- I love it.

PoP Ambre Project 10 Bead Bracelet ($12)

Pencils of Promise builds classrooms and dormitories to support education around the world.  Two dollars of each bracelet purchased will be donated to further their work.  There is another set of bracelets made out of orthodontic materials, which are a little weird and a little cute.  They also sell amazing pieces of art, all “made with pencils”.

Ten Thousand Villages ($ various)

With an extensive collection of handmade items fairly sourced from developing countries, Ten Thousand Villages has everything from the edgy to the dainty.  They even have a store in St. Paul on Grand.

Last Thursday, the Wall Street Journal ran an article describing “America’s newest company type”, referring to the benefit corporation.  Recently passed in California and New York, legislation to create this new class of for-profit entities is gaining some momentum.  A grand total of seven states have new laws creating entities that allow for (or in some cases require) consideration of benefits other than shareholder profit when making decisions; four more states have introduced similar bills.

So where is Minnesota when it comes to benefit corporations? Rep. Linda Runbeck introduced the Minnesota Community Enhancement Corporation Act back in February of 2011, and Sen. John Marty introduced a form in 2006 (read the full story here).  The bill, which provides legal protection for companies that want to write a social mission into their charter, does not appear to be getting much attention.

Perhaps another recent legislative development is stealing the spotlight.  In July of 2011, the Human Capital Performance Bond bill was funded to the tune of $20 million.  The bill was spearheaded by Invest in Outcomes and Steven Rothschild, an Ashoka fellow and founder of Twin Cities Rise.   Through the bill, service providers would receive payments from the government for specific economic outcomes, also known as “pay for performance”. Although similar social impact bonds are being used in the UK, Minnesota was the first state in the US to attempt this type of program.  The Department of Labor and the Department of Justice are just launching pay-for-performance programs as well.  The bill is complex and many details, including who is eligible for payments and how they will be determined, have yet to be ironed out.  Read the Nonprofit Finance Fund’s White House report on Pay for Success to learn more.

Boneshaker Books

Harvest Moon Backyard Farmers

SimpleBrand

Donut Cooperative

Wisdom and Good Ideas

• Kate Barr of Minnesota’s own Non-Profit Assistance Fund reviews five challenges of 2011 and finds a silver lining in each.
• Dutiee lists 3 Big Opportunities for Social Innovation in 2012, which center on the social web and open data.
• California continues to innovate by becoming yet another state to offer Benefit Corporations as a legal entity.  12 Companies, including Patagonia, immediately sign up.

Global Experts

Solution journalism hub and #socent reporting blog Dowser recently ran a series checking in with some sector experts to mull over 2011 and ponder 2012.  Here’s a roundup:

• Sasha Dichter of Acumen Fund pointed to the continued, steady progress to bring the level of impact investing to match the level of discussion about impact investing.
• Amy Clark of Ashoka highlighted the ‘evolved democracy’ of social entrepreneurship spreading to new areas, and Ashoka’s new focus on empathy.
• Kevin Jones of SOCAP discussed looking to Scandinavia to learn how to collaborate.
• Gabriel Brodbar, founding director of NYU’s Social Entrepreneurship program, talked about preparing students for cross-sector collaboration, taking risks, and learning from failure.

The Latest on the Greatest

Mosaic Social Entrepreneurs Cup

This year’s winner of the Social Entrepreneurs Cup, a semi-finalist track of the Minnesota Cup, was HourCar, which provides Zipcar style car-sharing to Minneapolis neighborhoods.  In second place was DesignWise Medical, a non-profit medical device company filling market gaps in the pediatric market using volunteer resources.  The other two finalists were Mind Body Solutions and Give.MN (learn more about all finalists here). Also, the Social Entrepreneurs Cup gained sponsorship by the Mosaic Foundation this year.

SVP Investees

Once or twice a year, Social Venture Partners (SVP) and its members choose new organizations to support with their dollars and volunteer hours.  This year, they added Joyce Preschool, an early education organization bringing English-Spanish immersion, and A-List, an innovative youth center.  In addition they provided an incubation grant to Rockstar Supply, which engages the creative arts community in teen education via tutoring and afterschool programs.

Shiny and New

New Ashoka Fellow

As you may know, there are four Ashoka fellows located in the Twin Cities (Terrie Rose of Baby Space, Steven Clift of e-democracy, Steve Rothschild of Twin Cities Rise! , Jim McCorkell of Admission Possible), plus the first expansion of Genesys Works and offices for Playworks. This year Ashoka added one more to that list; Dana Mortenson of World Savvy was accepted as a fellow.  Congratulations Dana!

More Interest from Academia

There seemed to be an upswing in interest in using business for social good on the part of education institutions this year, including Augsburg, St. Thomas, and even Carlson School of Management.  Read more here about the specific programs and conferences.

Non-Stop Events

The social innovation event calendar was so full this year, it was impossible to attend then all.  Particular treats included:

• Ashoka Solutions Forum: The February and November events highlighted the amazing work of Ashoka fellows.
• Social Innovation Exchange: Considerably more intimate than the Solutions Forum, these discussion panels co-hosted by Ashoka and Engine for Social Innovation included a diverse set of experts, from hip-hop artists Dessa to Secretary of State Mark Ritchie.
• SEA hosted REDF: REDF has really set the bar for earned income non-profits, especially in job creation.  It was a real treat to hear from then first-hand.

Add in the St. Thomas Symposium on Social Entrepreneurship, SVP International conference, Net Impact, SEA, Epcon, and that’s a busy year.

This Blog!

I’ll admit I’m biased, the there is now a blog specifically dedicated to covering social innovation in Minnesota and you are reading it! Sign up for weekly Porpoise Mail to stay updated!

The Scheme

I was recently enthralled by Laurie’s article, published on good-b.com, entitled “Let’s End the Social Entrepreneurship Ponzi Scheme“.  (Laurie runs the Impact Entrepreneur Linked-In group that is now over 1,000 members strong; it’s a lively conversation if you are interested).  The main point is that everyone, particularly foundations and institutions, is encouraging people to start their social venture, assuring these would-be social entrepreneurs that there is plenty of money out there.  All this is adding more and more unfunded social entrepreneurs into an industry that does not have the investment infrastructure to meet the demand.   Sadly, the reality is that what little money exists for impact investing is targeted at later-stage companies.   While this is not exactly a Ponzi Scheme, it is still troubling.

Some startling facts from the article:

• Only 4% of U.S. foundations do any Program- or Mission-Related Investment in social enterprises,
• The Rockefeller Foundation, which has taken a lead in discussion about impact investing, has yet to make a single investment in the space
• Respected organizations like Women’s World Banking and ACCION International have tried to raise early-stage equity funds, but failed.

Social Venture Financing in Minnesota

SVP

MN Cup- Mosaic Social Entrepreneur track

MN Cup- all other tracks

Project Skyway

RECENT EVENTS

• 12/1: Jon Foley’s How to Feed Nine Billion People:

Jon Foley is an excellent speaker with a real knack for making hardcore science into something an audience can bothcomprehend and enjoy.  He spoke to a room of about 300 people through the U of M College of Continueing Education Headliners’ series.  Check out Foley’s Ted talk and the U of M Institute on the Environment’s video about his work.

• 12/5: InCommon‘s Collabumentary:

Speaking of video, InCommons sponsored an event designed to bring together organizations and provide hand-on practice at making videos.  Complete with improv comedy from the Theater of Public Policy, a cash bar, and the inspiring environment of co-working space CoCo, it was an unique event with a great turnout.

FUTURE EVENTS

• 12/7, 12-1pm: IonE’s Frontiers Series- Collaboration for Environmental Protection

U of M’s Institute on the Environment puts on a series of lunchtime talks that address environmental issues, from recycling to regulation.  This week Carissa Shively Slotterback will discuss how to bring stakeholders together to create change in environmental policy.

• 12/8, 12-1:30pm: SEA Members Spotlight on Innovative Packaging Solutions

The Social Enterprise Alliance- Twin Cities invites you on a tour of Innovative Packing Solutions, a local non-profit that focused on employment.  They will discuss how they balance their mission with driving sales growth.

Jon Foley, director of the University of Minnesota’s Institute on the Environment, recently published an article in Nature magazine explaining how we can feed the growing population without ruining the planet.

The solutions Foley proposes to meet such a massive goal include changing farming practices, shifting diets away from meat, and eliminating waste in food production and distribution. He explains it all in a TEDx talk here, and the Institute on the Environment has made an awesome 3 minutes overview of the challenges of population growth and modern agriculture.

Lucky for us Minnesotans, we can hear from Mr. Foley live at the U of M’s Headliner’s series Seven Billion and Counting this Thursday, December 1st, at 7:30 p.m. on the St. Paul campus.  It costs $15 and ,be warned, the signup process feels like registering for classes at the U, but it is definitely worth it to hear from this thought leader.

Check out other local events on our EVENTS page. If anyone has any theories why all the environmental events are in December, we’d love to hear them.