What is Impact Investing?

Social entrepreneurship is a field that is based on the notion of “capitalism with a cause”, “compassionate capitalism”, “social responsibility” and even “capitalism with a human face.”

Social entrepreneurs and social businesses work with a social mission, and they manipulate the workings of the capitalist system to help make a positive social or environmental difference.

Creating enterprises is one way for you, as a social entrepreneur to make an impact.

Another great method is to engage in socially responsible investing – and this can be part of your own personal finance initiatives day-to-day, rather than starting up your own social enterprise.

Impact Investing: One Type of Socially Responsible Investing

Even if you don’t run your own social enterprise, you can be personally involved in socially responsible investing using a portion (even a small amount) of your regular income and savings.

Paul Sullivan wrote a very relevant article in the New York Times, entitled ‘With Impact Investing, a Focus on More Than Returns.’ Here, he talks about ‘impact investing’ as one form of socially responsible investing.

He gives a definition of impact investing, as follows:

More often, impact investing is described by what it is not. It does not work in the same way as socially responsible investing, which excludes areas a person does not want to invest in — like tobacco or guns — through a simple screening process. Impact investing focuses more on bringing about change — helping the working poor in India buy a home, for instance.

While most of the money is going into areas like helping to reduce poverty and improving the climate, it is not philanthropy. Investors expect at least a return of their capital with an adjustment for inflation and, in many cases, a lot more than that.

According to Paul, impact investing seems to be a larger-scale form of socially responsible investing, as he claims that it usually involves “minimum investments often around $1 million.”

Investing in Proactive Companies Engaged in Social Impact

Although impact investing seems to need larger amounts of investment input, the philosophy behind it is still relevant even for the small investor and average person wanting to do good while doing well. The general philosophy is to invest your money in companies that make a positive social impact. It seems to be distinctive from other forms of socially responsible investing which merely excludes companies engaged in prohibited business practices. Impact investing, on the other hand, focuses on investing in companies that proactively engage in a social mission (a social return on investment), along with definite financial returns. For example, impact investing involves investing in companies that engage in sustainable energy technology or affordable housing.

If you’re very interested in the concept of social entrepreneurship, but you can’t see yourself starting up a social enterprise yourself, really do consider impact investing. You can support other social entrepreneurs and encourage social impact through your investment, even while you receive a financial return and grow your money, too.

Share Your Impact Investing Ideas and Resources

I’m aware that there are a number of ethical mutual funds that are available in Australia and the USA, which include only social responsibility type of companies. So I’m going to open it up to you. Share your impact investing ideas and resources. Are you engaged in impact investing yourself, and if so, how?

Go Out Of Your Way to Give Value

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A friend of mine was recently emailing me and, in getting in contact with him, it was great to see him develop and to finally figure out what he’s passionate about. Social networking for business can be a great way to extend your resources and give greater value to those in need.

What I’m going to be talking to you today is going out of your way to get things done. And once you’ve found your passion, and what you’re passionate about, then going out of your way to get things done seems so easy.

It’s so evident with him (my friend) that he’s so enthusiastic now that he’s going all out. That’s what I recommended to him: Once he had found what he was passionate about and what he wanted to live for and what drew him to excitement, go all out.

Social Business and Service

When it comes to your social business and you being a social entrepreneur, I would suggest for you to go out of your way to give value to others. By going out of your way to give value – to provide a service and a product, to be effective – it’s a great way to influence people.

Now, I’ve talked about it before. But there is a law of reciprocity working in human interactions. What that law means is that: Whenever you give something to someone, usually that person feels a connection to you.

Giving Value & the Filipino ‘Utang Na Loob’

In Tagalog – my original Filipino language – it very much means ‘utang na loob’ (that’s what they call it). ‘Utang na loob’ means something that you owe from inside.

For you to go out of your way for your customers, for your clients, for beneficiaries, for what you give out there in the world, I would argue that by doing something like that (by giving your all, sharing what you’re passionate about and sharing your contributions with others), the world will give back to you. It will give back to you in the sense of financial sustainability for your business, in terms of credibility and reputation for you and for your company.

But going out of your way also means that you’re giving – and as a social business or any form of social networking for business that’s the core reason for it’s existence: to give value to the world.

Note: Please excuse the poor sound quality of the video. As I was living and working in Bangladesh at the time of this video, it was the rainy monsoon season. Therefore, the sounds in the background were the fierce winds and pouring rain. Thank you for your understanding.

ScojoVision and the Microfranchise Social Business Model

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Today I’m going to be reviewing a social business, and today’s social business for review is ScojoVision. This will help you understand what makes good business ideas work.

Now ScojoVision actually was called the Scojo Foundation before, and it stemmed from Scojo Eyewear which is based in the USA.

Transforming a Conventional Business into a Social Business

Scojo Eyewear sells sunglasses and glasses to people in the USA. But what’s fascinating is that they transformed their conventional business into a social business in that they wanted to help people’s eyesight around the world, especially in developing countries.

So they set up the Scojo Foundation, now known as ScojoVision, and they created microenterprises, especially known as ‘microfranchises.’

ScojoVision and Microfranchising

Microfranchising is where a franchisor creates a business system – a successful one – and then helps people in developing countries use that business model for little capital and then start creating money and profit with that. So they’re using their entrepreneurial initiative but for a small amount, and with a business system that works.

Now, ScojoVision used that business system of microfranchising in South Asia, and I think now also in Latin America. With that, they helped poorer women to go out, and as franchisees they would test people in their community with their eyesight. They would give these tests, and whenever they found that people needed glasses, they’d be there ready to provide glasses. And the women themselves, would get a large percentage of that profit.

So with that great innovation of microfranchises by ScojoVision, it’s a great idea!

What do You Think About ScojoVision’s Microfranchise Model?

And I would suggest that to you: To really think about it, think about the kinds of good business ideas you can do and maybe you could share with me some ideas about microfranchises that you know.

Note: Please excuse the poor sound quality of the video. As I was living and working in Bangladesh at the time of this video, it was the rainy monsoon season. Therefore, the sounds in the background were the fierce winds and pouring rain. Thank you for your understanding.

Creating Social Business Ideas Using ‘People’, ‘Planet’, ‘Profit’

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The area of social business and social entrepreneurship (creating business ideas for good) is very much a new thing, and that’s what’s great about it!

Being new means it’s very much open to you, and your imagination, and what you want to come up with.

Start Up a Social Business with a 3BL Focus

Now, to give you a kick-start, let’s think of some techniques of how you can start creating a social business to move into social entrepreneurship.

To come up with business ideas, a traditional business would mainly think of profit maximization as they focus only on that single bottom-line.

Social enterprises, on the other hand, have a triple-bottom-line (3BL): People, Plant and Profit. In my point of view, that’s a great starting point to start your own business ideas.

Example: People, Planet, Profit for Computers

One way you could do it is to take a sheet of paper. Write down ‘People’, ‘Planet’, ‘Profit’ and come up with a single idea. To start with, start with something you’re passionate about. Let’s say you’re passionate about computers (that’s something that I’m quite passionate about – I love computers and technology).

Let’s say you enjoy computers. Start with how you could help people through computers. You could give a service and provide a profit through computer technology. You could sell computers and that could solve your area of ‘Profit.’

But in terms of ‘People’, how could you help them? Well, you could then decide: “I want to give a portion of my profit to ICT4D, which means Information and Communication Technologies For Development.” And you could also help donate some old computers to developing countries to help them with their computer literacy.

In addition, it would help the ‘Planet’ – the environment – because you would then be reusing old computers which would have gone to the landfills, and you would actually then ship them and donate them to developing countries where they could in fact use them.

Share Other Ways to Come Up with Social Business Ideas

What do you think? What other ways or techniques can social entrepreneurs use to come up with social business ideas?

Note: Please excuse the poor sound quality of the video. As I was living and working in Bangladesh at the time of this video, it was the rainy monsoon season. Therefore, the sounds in the background were the fierce winds and pouring rain. Thank you for your understanding.

3 Inspirations For Your Self-Leadership

Understanding leadership and social networking for business are just as important for social entrepreneurs as it is for traditional entrepreneurs.

Though social entrepreneurs have the added responsibility of thinking about the external, social impact of their business practices. Leadership is about taking responsibility for yourself, your team and the environment around you.

Self-Leadership Comes From Within

The concept of self-leadership concentrates on leadership from within. Usually, when we think of leadership, we think of one proclaimed leader who has followers supporting them.

Self-leadership, however, is about how everyone has the capacity to be a leader. Leadership becomes more about understanding yourself and your responsibilities, and taking directed action, rather than having authority over others. Self-leadership is about taking responsibility and direction for your own life.

Social entrepreneurs must be leaders, and must understand it – because essentially, they must understand themself.

Understanding yourself – your strengths, weaknesses, and personal passion – is highly significant for achieving social impact that is influential and effective.

3 Quotes to Help Motivate Your Self-Leadership

Michael Tucker, who heads Xtreme Business International, is a very interesting guy devoted to supporting social entrepreneurs especially in the USA. He has written an article called ‘The Price of Respect is Self-leadership‘ over at the Social Entrepreneur Forum.

There are 3 main quotes from his article that stand out, and may be useful to inspire your own social leadership:

  • If you cannot lead your self you can’t lead anyone else.
  • Self-leadership is important because it ensures that you materialize your goals and most importantly that you build self confidence.
  • People can’t help but admire and respect someone that has applied discipline to their life to accomplish a goal.

Share Your Inspirations That Drive Your Self-Leadership

How about for you? What inspires you? What social networking for business skills do you use through leadership? Share some inspirational quotes that motivate your own social leadership.