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Non-Financial Capital and Social Change

January 25, 2012

(Paul Shoemaker is executive director of Social Venture Partners Seattle and recently was named one of the "Top 50 Most Influential People in the Non-Profit Sector" by The NonProfit Times.)

PShoemaker_headshotThe theme of this year's World Economic Forum gathering is The Great Transformation: Shaping New Models. A lot of people took a lot of time to write a convoluted description of what that really means. Let's boil it down to this: Because of the huge economic and social shifts taking place around the world, we don't have good models for understanding this "new norm" or for aligning stakeholders/citizens around a vision and inspiring institutions and individuals to realize those visions.

As some of you know, a few months ago I did the local TEDx about the power of human and social (not just or even primarily financial) capital to change our world in the years ahead. I think there are two parts of that message that might be relevant to WEF, and there's one I mentioned in the talk: our old ways of adding up the financial and institutional resources for community change flat out miss the power, potential, real, and often more enduring impact of human and social capital. (I give credit to SVP partner Bill Henningsgaard for articulating that.) This is starting to change, but we have to become much more intentional and specific about the role and value of non-financial capital in social change. That is a core part of our game at SVP.

This other one I didn't mention: another huge reason why human social capital is so critical is because the amount of money we can bring to bear on social issues is fixed, constrained, or even shrinking in many places. Whether we like it or not, that is not going to change anytime soon. Governments around the world are collectively tens of trillions (tr, not b) of dollars in debt. No matter your politics, that is a fact that unquestionably points to constrained public resources.

So the most plentiful, expandable assets we have are non-financial. Don't get me wrong -- money always matters. But if we want to increase the "supply" of assets for positive change, we're gonna have to do it in ways that are leveraged, creative, and expand human and social capital. How much difference can that make? I don't know for sure, but think about the "social value" that Facebook creates -- and the fact that it didn't even exist ten years ago.

What do you think? Given the challenges confronting us in 2012 and beyond, what does the social sector have to do to think -- and be thought of -- differently? How can we rapidly change the "equation for social good"?

-- Paul Shoemaker

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