So, remember Rockefeller Brothers Fund President, Stephen Heintz? Well one guy spent a half hour of our media briefing challenging Heintz’ assertion that “no major social change has come from the for-profit sector.” Paul Herman, founder and CEO of a new company called HIP Investor (at the conference as Press writing for Fast Company Magazine), disagreed.

I think it is almost instinctive to most of us young’ins that social change can be profitable, but this is actually a radically new idea in the investment community when considering investment strategies (it is not part of a single major foundation’s investment strategy, according to Heintz) and is not part of mainstream financial investment discourse, to be sure. It is a new force of change: the mission-driven investment movement.

Immediately, I thought about the example of a profitable venture that produced drastic social change during my lifetime: the internet. The internet has revolutionized the world while at the same time resulting in massive profit. It is the single most influential factor in globalization and the “flattening of the world.” Yet, the internet serves as the basis for infinite profitable ventures.

Starting in the 90s, the concept of micro-lending took off. With the internet, so-called hybrid models of for-profit ventures that produce social good and particularly, using web technology to conduct microlending, have emerged. Check out a few examples:

• kiva.org = “Kiva’s mission is to connect people through lending for the sake of alleviating poverty. Kiva is the world’s first person-to-person micro-lending website, empowering individuals to lend directly to unique entrepreneurs in the developing world.”
• prosper.com = “Prosper is an online community for lending and borrowing money.”
• microplace.org = “Invest wisely. End poverty. At MicroPlace, you can make investments that reach millions of hard-working poor people worldwide.”
• zopa.com = “The best rates. The nicest people. At Zopa, members who invest help members who borrow.”

I think there are many more examples of for profit ventures and CSR programs that can produce social good, but for now I will just give a shout out to HIP…

What is HIP and what does their model entail? (Excerpts from their website) www.HIPinvestor.com

HIP Investor is a team of experts in sustainable and profitable growth. Together with their partner the Social Venture Technology Group, HIP + SVT have developed a unique HIP framework to measure human, social and environmental impacts of products, processes and portfolios — and to measure the results. Founded on the premise that boosting net-positive human impact leads to even higher profit, HIP is using its innovative scorecard tool (link to this) to demonstrate how solving human problems can result from Human Impact + Profit.

Socially responsible investing is the fastest growing group of managed assets in the United States, growing more than 258% over the last ten years. More and more investors are looking for a way to align their values with their investments AND make a profit.

At the same time, 84% of global executives see the need to deliver both high investor returns and public good yet only 3% feel their companies are doing a good job at realizing their goal. Organizations around the world have an unfilled need about how to innovate to solve human problems, thereby creating positive human impact. This impact is measurable (e.g., customer, employee and supplier values) and drives sustainable, profitable growth.

HIP Investor is a leading expert in building this sustainable, profitable growth and helping both socially minded investors and global executives meet their goals for Human Impact + Profit simultaneously. Until the world’s $140 trillion in investments in all currencies are generating both Human Impact + Profit (HIP) simultaneously, they are underperforming. HIP Investor serves corporations and CEOs, entrepreneurs, and individual and institutional investors to realize their potential to be HIP.

Can social change be “HIP”, or profitable? Know of any examples where profit meets human impact? Can the for-profit sector be responsible for a social revolution? Why do we even need the non-profit sector? What do you think?