A vision for market development
We need to look at this field as a new market or new industry that needs to be developed over time. From that perspective we need to ask ourselves: What is our vision for this market? How should a mature social impact market look like in Turkey in 10 to 15 years? What kind of players, products and services do we need and how would such a market function in practice?
Figure 1: Social impact market development
Based on Monitor Institute (2009): Investing for Social Impact, p. 12
Currently, with a few sporadic activities by entrepreneurs and intermediaries, the acute lack of social investment capital, and perhaps more importantly lack of reform champions, Turkey is still at a phase of ‘uncoordinated innovation’ (see figure 1 above). What can be completed to move to the next phase of ‘market building’? Firstly, we need to break out of the ‘chicken and egg’ cycle. The few potential social funders or investors I spoke to, who showed some interest in investing for social impact, argued that there was no “deal pipeline” or “trustworthy organizations” and virtually no reliable and competent partner to support the investment process. Without access to finance however, social organizations are less likely to successfully launch their idea, sustain their operations overtime and grow, which makes investment in this field more and more unattractive.
I see a point in the argument made in this context by Sir Ronald Cohen, a Egyptian born British venture capitalist in the 1970s and a social investment pioneer since the beginning of this century that “supply of money creates its own demand”, i.e. if we supplied the right kind of financing the development of social organizations would follow. In reality, it is probably a mixture of interventions both on the supply and demand side. However, we should not wait with attracting social investors who are ready to put their money in social innovations until we have a long list of ‘investment ready’ deals to present to them.
Secondly, we need to support social ventures not only with a view to help establish investment ready enterprises but also with a view to supporting their potential as pioneers to create benefits on market building beyond the direct impact of their organization. A social venture, for example, that establishes an innovative partnership agreement with a government agency lowers the barriers for other social ventures to work in a similar arrangement. Similarly, many entrepreneurs first educate the market before they are able to offer their goods and services thus helping to prepare the future market for their peers.
Figure 2: Total social impact of a firm
Thirdly, we need to engage and build market intermediaries such as think tanks, education initiatives, impact measurement agencies, funding or matchmaking platforms. By providing market information, increasing transparency, raising awareness, and connecting and educating players, these organizations are essential for the flow of capital and the ability of social organizations to make absorb capital at different stages of their entrepreneurial life cycle. In practice, however, the importance of the work of intermediaries has still not been fully recognized in Turkey (neither in most other countries, in fact). Why? For many philanthropist and support organizations it still seems more attractive to support and invest in a specific social organization that provides direct benefits to, for example, women or children than to help start a networking platform, support an accelerator program let alone fund research or public policy consulting
Add paragraph text here.
Figure 3: Building the field for Policy Change
