Famine or Feast ?. Arthur Wood [email protected] The Current Status Quo. The Current System is Highly Inefficient Despite Bono (or Geldoff if you are my generation) If things are left as they are – it will get worse Demographics and Aging & Health in Western Countries
Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.
Famine or Feast ?
The Current Status Quo
PEOPLE WE SERVE ARE AT THE BOTTOM OF THE FOOD CHAIN
How Bad is the Financing Structure?
So 20-80% of the Capital does not even arrive
Market System Any Better ?
Market System Any Better ? (ctd)
Cost of Capital Allocation 20-50% vs. 2-5%
Irony for Donors – 50 cents on the Dollar
Current allocation systems are taking20%-50% + off before usage
Indeed how efficient is the current Market allocation system even after it arrives – with a huge number of small entities with limited Economies of Scale
Or on the Governmental side driving top down through the existing status quo.
Post 1980 is this how we now drive change ?
BUT Grounds for Optimism
THE SAME HISTORICAL FORCES ARE AT WORK
INTHE GERMAN HEART OF EUROPE
German Employment Indexed to 1960
Source: McKinsey analysis of data from Johns Hopkins Nonprofit Sector Series
CITIZEN SECTOR GROWTH IS ACCELERATING IN THE US
Number of Organizations Indexed to 1982
Source: The Independent Sector: The New Non-Profit Almanac in Brief (2001), IRS (2002)
>> Improve the RISK Products - Credit structure – CCC>>AA
>> Increase RETURN - provide High Contingent Returns
>> Risk Management – Insurance models
>> TO BRING PRIVATE CAPITAL AND IDEAS IN SCALE INTO THE MARKET
Expanding the Product Range
Entry of banks with Capital Market Instruments
Social Investing Ventures
Breaking down legal structureCIC &L3C
PRI / LLC
Plus 5% (and beyond) IRR
Minus 100% IRR
“Not For profit” Foundation Grant model
“For Profit” Iterations of Venture Capital models
THE IMPORTANCE OF COLLABORATION AND CHANGE
To solve the problems on a systemic basis requires:
Collaboration from the social sector
Creation / Evolving of Intermediaries to create Collaborative behaviour
Foundations – Leverage Capital, Increase Innovation but HOW to draw in more Private capital
Governments to change legislation – Tax treatment and Legal structures
Banks to bring their skills to bear