As Conservative leader David Cameron looks for a big idea to help him win the next British election, has he stumbled upon philanthrocapitalism? In a speech at the Voices 09 conference, he said that Britain must “shape” capitalism to suit its society and not vice versa, arguing that social enterprises are in a key position to achieve this. Hear, hear!
Cameron also said that the “third sector” is under-capitalised, and that it would be a priority for a new Tory government to create a social investment bank. This would act as a wholesale supplier of capital to other social lenders, and as a one-stop shop for investment and financial advice for social entrepreneurs.
This is an idea that is also interesting Britain’s Labour Party, which has made several positive contributions to improving the social sector, led by its Social Investment Taskforce. In America, Barack Obama has promised to create a social investment fund to help promising social enterprises to scale up – though the details of this remain vague for now.
Cameron also said he is interested in the idea of a “social stock exchange”, allowing social enterprises to raise equity capital by selling shares. This is probably not something that could work for all social entrepreneurs, but only those which can generate revenues to pay some return on the share capital. But if done right, it could help to improve the access to capital and efficiency of the social sector. Mark Campanale, one of the leading thinkers about social stock exchanges, discusses the idea here.
Overall, having politicians compete to be the most philanthrocapitalistic is extremely positive, given the need for philanthropic funds to achieve leverage and the need for governments to embrace more innovative approaches to solving social problems. The challenge will be to ensure that the bureaucratic tendencies of government do not stifle the social-entrepreneurial spirit.