Goldman Sachs is making an unusual loan of $9.6 million to keep young men out of New York City jail. And while, yes, they can make millions out of the deal, there are good intentions behind it. It’s all part of the introduction of a Social Impact Bond, invented in the UK and now launched here by Mayor Bloomberg, in which the private sector seeks to privide a solution to a problem that would cost the government money.
If the plan works, the investors and city split the profits, while if it doesn’t, tax payers don’t pay and the investors bear the loss. Specifically, Goldman’s loan will go to a non-profit called MDRC to pay for a selection of services for teen offenders. And if none of it works out, Bloomberg Philanthropies has guaranteed the bulk of the loan capping Goldman’s exposure to 25%. And that’s what’s so interesting because it prompts a series of questions that speak to the heart of the role of the private sector in scaling (and bankrolling) social change:
1. Does such an effort by Goldman Sachs do anything to improve its reputation in your mind since the revelations of banking practices since 2008?
2. Does the potential upside of the deal for Goldman diminish any reputational benefit especially when they ultimately bear so little risk?
3. Is it alright in the tax payers mind to empower private sector companies to profit by doing projects that government agencies should manage themselves?
4. Do consumers believe such efforts are motivated by a genuine intentions to help or are they seen as yet another (and quite literal) way to profit from the disadvantaged?
5. Is a feature in which private sector companies underwrite social change of all types feasible, both in terms of consumers and citizen support and the bottom line value to those companies?
6. Is it appropriate that Goldman gets a good deal in order to inspire other companies to follow suit?
With government burdened by debt and bipartisan inertia, and non-profits under-resourced, we have little recourse but to look to the private sector to spearhead social change. Yet with it will come even greater scrutiny of the mixed motives and competing agendas of for-profit companies empowering change.
If corporations such as Goldman Sachs cynically view such efforts as merely money-making opportunities they will rob themselves of the reputational benefits they so desperately need. If they re-characterize such efforts as investments in long term customer loyalty through social impact, they can quickly take the lead in what is both a necessary and expanding marketplace opportunity.
Do you support such efforts by Goldman Sachs? Do you believe their motives are genuine, cynical, or a mixture of both?
As the days when social media was pegged as a fad drift from memory, mobile advertising has risen to take its place. Will mobile ads be effective, what ad format works best, who will win the mobile payments battle and why? Yet a quick glance at the infographic by Luma (above) should be enough to assure anyone that mobile advertising (like Social TV)is already a force that will reshape the marketplace and consumer spending. And, if there was any lingering doubt, the numbers below should dispel it.
1. Is your brand and its marketing actively pivoting for the mobile-driven marketplace?
2. Is your website mobile-friendly and is the content through which you promote your products and services optimized for smartphones and mobile advertising?
3. Is your marketing strategy being reconfigured with mobile advertising and social shopping as the key drivers rather than traditional media?
As the half-life of technology stinks, so too does consumer adoption. Mobile advertising is already here. There is no time to waste and much to lose if you your brand doesn’t respond.
Do you believe mobile advertising will reshape your business and, if so, how?
I had a special moment in London last week that I wanted to share. Five years ago when I started writing We First, I had no idea what I was doing or if it would amount to anything. When it came to writing the Epilogue, I went up to a friend’s house and locked myself away in a room for a day to write. I started by reading the speeches of JFK and MLK Jr., to get my mind in the right place and ended up quoting MLK Jr. in the Epilogue.
Last week I was fortunate to attend the Global Impact Institute in London and MLK Jr’s daughter, Bernice, was there. She read the Epilogue and wrote the message (above) next to it. It’s one of those moments when things come full circle and make all the effort worthwhile.
I share this to encourage anyone else who’s working on something meaningful for a higher purpose to keep going.
If you’re working towards defining and acting on your company’s purpose and core values, keep going.
If you’re working on finding a way to make your products, services and environmental impact more sustainable, keep going.
If you’re working towards scaling the contribution your company makes towards a cause that’s in alignment with it’s core values, keep going.
If you’re assuming greater responsibility in your personal life for the impact on the planet and the lives of those around you, keep going.
A movement is underway in which consumers, citizens, corporations, non-profits and government agencies are slowly forming purposeful partnerships that are our best chance to meet the social challenges we face with the necessary force. This has arisen not because it’s merely possible thanks to digital and social media, but because we have no choice. So let’s draw energy from each other’s company and commit to making a small difference a million times over using whatever platform we can, whether it’s a simple conversation, social media, a book, a website or your company’s behavior. It’s the only way we can realistically improve lives for ourselves and others for the long term. I guarantee that when you do, moments will come along that will make the effort worthwhile.
Have you ever had such a moment when good work you were trying to do suddenly made sense? Would you be willing to share it?
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