Ronald Cohen, chairman of The Portland Trust and Bridges Ventures, talks to BW Businessworld about social entrepreneurship and philanthropy. Excerpts:
Which are the major issues before the social impact investment?
Health and education are the two major issues which are plaguing the world and social investments. Education is the best possible way of addressing the social issues, but the problem is we tend to solve it with aid, which has not been very successful. The governments have not been able to solve it. If we as social impact investors and philanthropy can replicate what we did in business and tech entrepreneurship in the social areas then we can begin to accelerate the pace of innovations.
What role could a government play?
The government has to adopt the new approaches of social entrepreneurship so that people can move more quickly. The UK government has introduced social investment bank and we infused £600 million through Big Society Capital, thus created a foundation which helped in increasing the capacity to absorb the impact investment. The philanthropic activities are promoting social entrepreneurship, and thus, reducing the task of the government recycling their money when they achieve goals in social investments. This idea is as disruptive as technology was.
How is social impact investment going to help India?
We can help through the social impact investment by helping a poor student in getting education and preventing the dropout rate, that would be the biggest help to any student and the society. We are planning to launch a social impact bond with YES Bank to help stop the school dropout. The non-profit organisations have to work with these students. India has to tackle the education issue.
A development bond has already been used in Rajasthan to check this, especially among the girl child. In India, there are 50 impact investment management firms with over $2 billion investments.
Do you see a change amongst the wealthy and their active philanthropy?
The behaviour of billionaires has been changing.They have committed to give away half of their fortune and they have begun to look at impact investments. For example, Matt Bannick of the Omidyar Foundation has been quite active in India and one of the big promoters of social impact bonds. The money has been begun to connect with impact investments in a better way than grants for helping improve other people’s lives.
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Haider Ali Khan is an alumnus of IIMC. He holds a degree in English Journalism from the prestigious campus. His passion includes Aviation, Technology, Politics and Sports.
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