A New Fund Seeks Both Financial and Social Returns says the New York Times article picturing Bono at Capitol Hill
"There is a lazy-mindedness that we afford do-gooders" said Bono, criticising the perfomance of impact investing to date. "A lot of bad deals done by good people"
Behind the 2 billion dollar fund is a private equity firm which has previous gained from investment in Uber and AirBnB, but now their founder wants to be seen to be doing good.
“Capitalism is going up on trial, and I think that it’s clear that putting profit before people is a nonsustainable business model,” Bono said. “I think giving those two equal time is the way forward, and I think that in the present climate, we need to rethink, reimagine what it is. It’s not that capitalism is immoral; it’s amoral. And it’s a better servant than master.”
That point bears ar remarkable resemblance to something I shared several years ago with the McKinsey Long Term Capitalism challenge - Re-imagining Capitalism : The New Bottom-LIne which described business which puts people before shareholder value and applying it in a 'Marshall Plan' for Ukraine
was how I described the challenge to shareholder value made 20 years ago
When our founder was interviewed in 2004, he'd made this point: "If everyone in the world has enough to live a decent life and not in poverty, then there is no great problem with some people having far more than they need. But, that's not the case, and there are no rules in the previous capitalist system to fix that. Profit and numbers have no conscience, and anything done in their name has been accepted as an unavoidable aspect of capitalism."
The 'Marshall Plan' proposal described the creation of a social investment fund of at least 1.5 billion dollars which would be returned in addition to reduction of costs to the state, particularly in the case of childcare reform which would enable all institutionalised children to benefit from a loving family home.
Last year, when York St John University ran their conference on Cross-Sector Collaboration, I was given the opportunity to describe how forward thinking business were invited to contribute to the social investment fund
“Project funding should be placed as a social-benefit fund under oversight of an independent board of directors, particularly including representatives from grassroots level Ukraine citizens action groups, networks, and human rights leaders.
“This program provides for near-term social relief for Ukraine’s neediest citizens, most particularly children who normally have least possible influence and no public voice. Over a few years time, the net cost financially is zero. Every component is designed to become financially solvent, through mechanisms of cost-savings and shared revenue with other components. One component, Internet, provides essential communications infrastructure as well as a cash surplus to be used to offset any lingering costs of other components such as childcare, and otherwise goes to a permanent social benefit fund under oversight of the aforementioned independent, citizens-based non-government board of directors.
“Any number of other social enterprises can be created. Furthermore, any number of existing for-profit enterprises are entirely free to contribute any percentage of profits they wish to increase the proposed initial $1.5 billion social investment fund. If for example the total fund comes to $3 billion, that amount would generate at least $300 million per year in a hryvnia deposit account at any one of several major Ukrainian banks, to provide ongoing funding to continue to create and expand social enterprises.
“This strategy places adequate funding for social benefit under control and management independent of government and the very obvious vicissitudes and conflicts inherent therein."
The oversight of an independent board of directors might well have been the deal breaker for those backing the Bono plan.
A decade ago, the plan was shared on both Skoll and Omidyar social enterprise networks and in 2009 I offered to lead the way for Richard Branson in Ukraine.
On the death of the man whose work I've described above, local civic activists shared an extract of his communication calling on support from USAID and the Senate FRC
"Children are left in conditions of neglect and medical ignorance, without benefit of even the most basic modern medical interventions that could reduce their suffering and give them a life reflecting human compassion that the vast majority of Ukrainian citizens want for all of Ukraine’s children, in my experience. Whether these kids live or die is of little, if any, concern to mafia"
The same might be said of these grandstanding billionaires, trying to build a reputation on what they are going to do.