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Ag Faceoff: For-profit or Nonprofit, Which Wins the Social ROI Contest?

Oxford’s Fierce Compassion – Series of Student Insights to the Skoll World Forum 2016.

Mark Brown, rx Co-Founder of Kulemela Investments and Current Oxford Said MBA student weighs in on “Ag Faceoff: For Profit or Non-profit Which Wins the Social ROI Contest.”

Agriculture presents an incredible opportunity for small-scale rural families in developing countries across the world. Countless organizations have taken various approaches in an effort to help farming families create better livelihoods for themselves. In this debate, link we heard from two representatives from non-profits and two representatives from a for-profit investment fund. They debated which structure better positions an organization to achieve social return on investment.

The panel, moderated by Richard Fahey, COO of the Skoll Foundation, included Alan Cheung and Ion Yadigaroglu of the for-profit Capricorn Investment Group, and their non-profit counterparts Willy Foote of Root Capital and Andrew Youn of One Acre Fund.

The panel was tasked to debate whether $1million can generate better social impact for small scale farmers if invested in a for-profit company or donated through a non-profit channel.

All four of the panelists shared great examples of investments and impact that their respective organizations have made and achieved. All four debaters expressed their organizations’ innovative approaches, promising social impact and the ability to generate healthy streams of revenue. At the end of the introductory remarks all of the panelists seemed to have a lot in common.

Alan Cheng pointed out that Root Capital and One Acre fund have a lot in common with for-profit ventures. Willy Foote urged us to consider that non-profits can make riskier, important investments. Ion Yadigaroglu pointed out that many of the early discoveries that have been scaled by non-profits were initially discovered by for-profit ventures. Andrew Youn shared his bottom line that One Acre is for-impact and with a non-profit baseline, it can formulate its approach to generate social impact at the most efficient rate.

The panelists raised compelling arguments but their values did not seem to be inherently opposed. The dialogue pushed the conversation past the two sides’ common threads of impact and financial sustainability and examined where they are unique from one another: in their differing accountability to their sources financing. Fortunately Jeff Skoll, an investor in all four of the panelists organizations, stepped forward to share his perspective. “It’s about timing”, he shared from the gallery. Market forces can achieve great impact, but when working to serve the poorest of the poor, the timeline to make money can just take too long. With less vulnerable populations, we can let market forces push businesses forward to create social impact.

The insights from each side of the debate seemed to underscore the importance and benefits that both for-profits and non-profits can have in the pursuit of improving small-scale farmer livelihoods. In the end the themes of a commitment to social impact, innovative methods and financially-sustainable revenue prevailed as more important than what seemed to be a false tension between non-profit and for-profit structures.

Follow Mark: @MarkPatBrown