Doing Better at Doing Good

NC has become hotbed for ‘impact investing’

September 14, 2013 

Earlier this month, the nation’s largest gathering of social innovators and high-impact entrepreneurs assembled in San Francisco. Organized by recent Asheville transplants Kevin Jones and Rosa Lee Harden, the Social Capital Markets Conference (or SOCAP for short) has rapidly become a premier event for exchanging promising ideas for positive societal change.

The setting for SOCAP couldn’t have been more inspiring. Situated at the Fort Mason Center along the San Francisco Bay, SOCAP coincided with America’s Cup sailing race. With the world’s most technically advanced sailboats racing past at top speeds in the background, everyone’s creativity seemed to surge.

Several key themes emerged. Among them: growing interest in investment capital serving as a catalyst for social change, the acceleration of social ventures in under-served communities and the role of big data analysis as a tool to unlock new solutions.

Each theme represents a dynamic approach to “doing better at doing good” and provides an opportunity to showcase some local innovators in North Carolina.

“Impact investing” is simply investment capital that seeks social and/or environmental value as well as a positive financial return. Current estimates show that several billion dollars a year of “impact investment” are flowing to sectors as diverse as sustainable agriculture, affordable housing, clean technology, and financial services for the poor.

This growth is being led by individuals and institutional investors who are seeking to do more with their money. It’s also attracting significant policy attention. Government leaders see this infusion of private capital as a market-driven approach to addressing significant local and global challenges, as evidenced by impact investing being an area of focus at the recent G8 Summit in Enniskillen, Ireland.

In the meantime, North Carolina has become a hotbed for this work. In fact, Investors Circle in Durham is the nation’s leading network of early-stage angel investors interested in impact investment. Since its founding in 1992, it has facilitated $171 million in investment with $4 billion in follow-on capital to 271 social enterprises. Investors Circle recently launched a chapter in Raleigh and is now looking to expand to the Charlotte area.

Idea gains traction

Self-Help, also based in Durham, has become the largest community development financial institution in the country. Through its venture fund and credit unions, it made more than $140 million in loans to families, small businesses, and non-profits last year (adding to almost $6.4 billion that has been invested since its founding in 1980) – all of which is geared toward making a lasting impact in our communities. The Latino Community Credit Union is having a similar impact across its eleven statewide branches.

One idea that is gaining traction globally, but not yet locally, is having foundations invest some of their endowment into high-yield impact investing vehicles. This could put more money to work in innovative ways in the state, so we hope this comes to fruition in N.C.

SOCAP was also abuzz with the growth of community-based “accelerators” designed to scale the impact of promising ventures. Here at home, Accelerating Appalachia in Asheville is a pioneering “nature-based” venture accelerator focused on issues ranging from sustainable food and farming to green building to natural fibers and textiles – with a specific focus on underserved populations. Its first class launches this fall, and, after 12 weeks of intensive mentorship, two peer-selected ventures will receive a convertible note (debt that can convert to equity) of up to $50,000 designed to generate follow-on funding. All participating ventures will then join an alumni network to foster a robust cluster of high-impact entrepreneurs in western North Carolina.

Accelerator class succeeds

In Charlotte, Queen City Forward (which Christopher helped launch) just graduated the first class from its Health Care Accelerator, in partnership with Ortho Carolina. Startups in the accelerator ranged from Infinite Health, a practice focused on integrative health care for children, to personal hydration system Cool Quench to the Queen City Mobile Market. QCF’s fall accelerator with Duke Energy and Bank of America had over 70 applications and just accepted its class of 10 new ventures.

Finally, leveraging open-source data to make life easier, more efficient and more sustainable is gaining widespread traction these days, and SOCAP was no different. Again, North Carolina has moved to the forefront in this arena by hosting the nation’s first regional “data-palooza” this past week in Raleigh. Featuring a broad cross-section of leaders (including the Chief Technology Strategist for Red Hat), the event showcased highly innovative solutions using publicly available data for local advancements in education, health care, and public safety.

As inspiring as SOCAP was, it was all the more encouraging to see many of the innovative ideas already blooming right in our backyard. Let’s keep it up.

Christopher Gergen is founder of Bull City Forward & Queen City Forward, a fellow with Fuqua’s Center for the Advancement of Social Entrepreneurship at Duke University and author of "Life Entrepreneurs." Stephen Martin, a director at the Center for Creative Leadership, is author of "The Messy Quest for Meaning" and blogs at www.messyquest.com. They can be reached at authors@bullcityforward.org and followed on Twitter through @cgergen.

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