More wonderful news! As part of the American Jobs Act introduced by President Obama earlier today, the White House announced that it will work with the SEC on a crowdfunding exemption. Heres how the White House Office of Science and Technology explain it on their website and link to IndieGoGo and Kickstarter projects as examples:As part of the President’s Startup America initiative, the Administration will work to unlock this capital through smart regulatory changes that are consistent with investor protection. This means reducing the disproportionately high costs that smaller companies face when going public, as well as raising the cap on “mini” public offerings Regulation A from $5 million to $50 million. It also means responsibly allowing startups to raise money through “crowdfunding” – gathering many small-dollar investments that add up to as much as $1 million. Right now, entrepreneurs like these bakers and these gadget-makers are already using crowdfunding platforms to raise hundreds of thousands of dollars in pure donations – imagine the possibilities if these small-dollar donors became investors with a stake in the venture.In a conference call with the press immediately after Obamas address, U.S. Chief Technology Officer Aneesh Chopra and Office of Science and Technology Policy Deputy Director Tom Kalil explained that they advocate an exemption, or at least a streamlined and less-expensive registration process, for public securities offerings of $1 million or less, with individual investment capped at $10K. They also said that they believe the SEC has the authority to make this regulatory change, no legislation required. Agreed– IANAL, but the Securities Act seems pretty clear about the SECs having the authority to write its own exemptions.
via White House to work for 10K/1M crowdfunding exemption – Change Crowdfunding Law.
Whether you interpret the jobs report that was released Friday by the Labor Department as promising or disappointing, the fact remains that the country is still mired in a joblessness crisis, with an unemployment rate of close to 9 percent. Amidst the talk of how the job market is faring in the business community, nonprofits in the U.S. are quietly creating jobs by cultivating entrepreneurship, ensuring that new jobs are both environmentally sound and pay a living wage, testing (and proving) the viability of worker-owned businesses, and advocating for the necessity of subsidized employment programs.
The Foundation Center and IssueLab joined together to interview six nonprofit and foundation leaders working on the urgent issue of job creation. Learn more about their unique perspectives on the issue and what they think is missing from the national discourse.
Social impact investing — a concept frequently raised but not clearly defined or understood — presents a compelling opportunity for foundations and philanthropists to maximize the leverage and impact of their work. Innovative philanthropists with higher risk tolerances such as Pierre Omidyar, Jeff Skoll, and Bob Pattillo, along with leading foundations and social impact funds like the Kellogg Foundation, Calvert Foundation, Acumen Fund, and Bill & Melinda Gates Foundation, are increasingly using social impact investing to expand their influence and introduce market-based solutions to the complex world of social change.
The increased interest of the philanthropic sector in social impact investing is driven in part by the desire of philanthropic funders and private investors to fuel sustainable interventions that address economic inequities and systemic, structural barriers to economic and social development. Leaders in the field believe that traditional charity often meets immediate needs but too often fails to enable people to solve their own problems over the long term. Accordingly, the social impact investment approach aims to catalyze the power of private markets to stimulate long-term social, economic, and environmental solutions.
Definition of Social Impact Investing
To date, no single definition of social impact investing has taken hold. The Global Impact Investing Network, a group of organizations working to strengthen the field of social impact investing, defines it as investments that “aim to solve social or environmental challenges while generating financial profit.” This approach contrasts with “socially responsible investing,” which uses negative screens to avoid investments in companies whose behavior is deemed “bad” or “harmful.”
Ashley Allen, via PND –.
Private-sector companies have ready access to a gargantuan capital market of tens of trillions of dollars globally. Nonprofit organizations, by contrast, are crippled by capital-raising efforts that are minuscule, inefficient, and badly organized. As a result, nonprofits that have developed solutions for critical and growing challenges—in fields like education, health care, housing, economic development, and environmental sustainability—often struggle to grow.
This is a problem with a solution that is entirely within the power of our legislatures. Like the private sector, nonprofits need investors who take risks in pursuit of financial return.
We might call this approach “dynamic deductibility.” Here’s how it would work.
via How nonprofits could access needed capital. – By Douglas K. Smith – Slate Magazine.
Social Finance launches Social Impact Bond
by editor on Sat 03 Apr 2010 01:00 AM BST | Permanent Link | Cosmos
London-based social investor, Social Finance, has launched a Social Impact Bond , with backing from the UK Ministry of Justice (MOJ).
The initial issue will fund social organisations working to reduce re-offending rates of short sentence male prisoners leaving Peterborough Prison. Social Finance targets to raise up to £5 million to fund the Peterborough Prison pilot.
“The Social Impact Bond has the potential to unlock an unprecedented flow of finance for social sector organisations,” said David Hutchison, Social Finance’s chief executive. “By focusing returns on outcomes, these organisations will be incentivised to develop innovative interventions to tackle ingrained social problems which weigh heavily on our society and our national purse.”
The bond is structured such that the MOJ pays returns of up to 13% to investors if re-offending is reduced below the targeted 7.5%.During the pilot period, social sector groups such as St Giles Trust will provide support to 3,000 short-term prisoners over a six-year period to help them resettle into community.
“Reducing re-offending is one of the Government’s highest priorities. Between 2000 and 2008, the frequency of adult re-offending fell by 15.9 %,” said Jack Straw, Secretary of State for Justice at MOJ. “But we are always looking at new ways of further reducing reoffending that provides value to the taxpayer.”
via Philanthropic Investing Magazine :: Social Finance launches Social Impact Bond.