Jonathan Harrison, Broadening the investment spectrum, and Why I’m at SOCAP09

SOCAP Global September 3, 2009

By Gloria Sweida-Demania

Jonathan Harrison

Jonathan Harrison

Jonathan Harrison is the director of operations of Rubicon National Social Innovations, which launches social enterprises in order to scale them nationally so that they may have significant impact on poverty and jobs in America.
1) Where do you see your organization fitting into the capital market spectrum?
Our goal right now is to promote our Emerge Loan Program to potential investors.  Last year at the conference, I was one of the few non-profit organizations seeking patient investment capital with below market returns.  Most social investors would like the highest financial and social impact return they can get. We see our role as educating the investment world on evaluating investments with an eye toward achieving highest social impact in order to create additional incentives for the investor to enter into a deal with a social enterprise with lower financial returns.
2) What do you hope to get out of SOCAP09?
It is definitely an opportunity to highlight our Emerge Loan Program. This is an alternative short-term loan program to what the prevailing predatory payday loan model prescribes. We hope to raise money for that project and to get lots of feedback. The best feedback I have received on our business plan is from the traditional, hard-nosed investment community. They are the ones that find the holes to patch up and the advantages to accentuate in our business plan.
3) What questions do you hope to raise at SOCAP09?
The big question is how do we create deal structures for social investors that entice them to give up some financial returns for higher social impacts. True social investors should be willing to work with social enterprises to devise success measures that create incentives for social enterprises to reach deeper impacts, serve more clients, even hardest-to-serve clients.  Deeper impacts are generally higher risk, and hence costlier. I feel it is important that as a social investment community we begin to dialogue on what is a fair and reasonable return, especially for financial service products that are targeted to the poor and disenfranchised.  I am also here to evangelize for a standardized measurement of social return—one that optimizes for financial risk. We believe there is a real opportunity for social investing to broaden the investment spectrum and provide capital where markets fail. However, we anticipate lively debate on whether social investing should be narrowly viewed as that part of the spectrum accepting lesser returns than one is accustomed to in a straight market based model.

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