LONDON (TrustLaw) - A close adviser to President Barack Obama said on Tuesday the U.S. has been looking to Britain for inspiration in its approach to social investment innovation.
Jonathan Greenblatt, special assistant to Obama and director of the office of social innovation and civic participation at the Domestic Policy Council, praised the UK for its innovative approach to social investment.
“The world is a better place for the leadership you have pioneered in the UK,” Greenblatt said in a speech at Good Deals 2012, a conference on social investment, in London.
“This includes many of the trends – good corporate form, fair trade, ethical consumerism, funding models and investment vehicles – that are evolving in our country.”
As an example, he mentioned the UK’s lead in creating social impact bonds, a new financial scheme that uses private capital to fund social programmes governments might not otherwise be able to afford.
The UK launched the world’s first social impact bond in 2010, aimed at reducing re-offending rates among ex-prisoners, and the U.S. has since introduced its own version of “pay for success” bonds.
“We think they hold tremendous potential to attract capital and fill gaps in funding,” Greenblatt said.
ENGINE FOR GROWTH
Greenblatt said it was wrong to see the social enterprise and non-profit sectors simply as a string of soup kitchens, or just as providers of services.
“When we pull back the lens we actually see that non-profits are also an economic engine,” he said.
U.S. jobs had been growing at a faster rate in the non-profit than in the private sector in the past decade, he said, adding that the non-profit industry was the U.S.’s third-largest employer with 13.5 million full-time jobs.
The sector was driving revenue of $1.5 trillion and generating $800 billion in annual economic output, which is about 5.5 percent of U.S. economic output, he said.
“Among the almost 2 million non-profits in the U.S., 95 percent operate on annual budgets below $1 million dollars, essentially functioning as small businesses and, at least in the U.S., it’s small businesses that historically power our economic growth,” said Greenblatt.
HEART OF THE MATTER
Social innovation is at the heart of Obama’s agenda of creating jobs, driving economic recovery, and strengthening civic life through expanded opportunity, Greenblatt said.
The president created the Office of Social Innovation and Civic Participation in 2009 to promote service, increase investment in innovative community solutions, and develop new models of public-private partnerships.
Obama’s principles are based on a very simple solution, rooted in the president’s own formative experience as a community organiser working in Chicago’s South Side in the 1980s, Greenblatt said.
“It’s about finding new ways to solve old problems, it’s about values-led creation as much as value creation,” Greenblatt told the conference.
“It’s about conclusive models for problem-solving that employ cross-sector approaches It’s about starting with evidence, learning from evaluation and applying those insights to drive better outcomes…
“It’s about investing in what works, replicating success and scaling change, not for commercial gain but in the public interest. The president deeply believes in these principles.”
Greenblatt mentioned the $50 million Social Innovation Fund, launched in 2010 and designated to provide growth capital for high-impact non-profits, as emblematic of the government’s efforts.
Greenblatt, a social entrepreneur himself and co-founder of Ethos Water, a company that aims to help children to get clean water, pointed out that no country had a “trademark” on social innovation.
“It can bind not just communities but countries,” he stressed. “It’s a global solution.”