Monday, October 04, 2004

The 1% Solution

At a discussion of funding options for social enterprise, the idea of creating a new asset class came forward. Dubbed a 'community debenture' the financial tool would fall somewhere closer to 'cash' than 'equities' on the asset spectrum and would be available to institutional investment professionals [Are you getting chills yet?] as part of their asset allocation strategy. So a socially balanced portfolio could invest up to 1% of it's assets in social enterprises - ergo ... the 1% solution.

Sounds good. Sounds easy.

To apply a little perspective, the Investment Funds Institute of Canada (IFIC) estimates the managed money industry assets, August 2004, at CDN$ 468.1 billion - a figure that reflects investments in Canadian mutual funds. At 1%, CDN$ 47 billion, that's a lot of economic stimulus for social enterprise.

It's no wonder the "1% Solution" received nods of approval.

Here's the rub ... social enterprise is cleaving into a set of 'kissin' cousins' that include enterprising non-profits, co-operatives, and socio-centric enterprises, each looking to define "social enterprise".

The sector is going in circles so fast it can see its' own tail.

Oddly it's not more money that's required ... it's more focused action.

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