Social Investment

This week's Economist has an interesting article on the recent trend of mixing philanthropy with innovative "impact investing".

 The Clinton Global Initiative launched the Global Impact Investing Network (GIIN), comprising of twenty members representing big banks (including Citigroup and Deutsche Bank), donors (Gates, Rockefeller), the Acumen Fund and Generation Investment Management (which is Al Gore's green company). If this group succeeds in agreeing on a common language for social investing and lobbying for helpful laws and regulations, impact investing could grow to $500 billion, which accounts for around 1% of the world's total assets under management in 2008.

 Social investment is not new in itself. But the success of ideas like microfinance, which combines do-good with profit, has inspired mainstream financial institutions and investors to become interested.

 For example, Social Finance, a social investment firm in Britain, has introduced the "social impact bond," where funds raised by bond purchases contribute toward organizations with social missions.  Social Finance plans to try out this bond for several public services like rehabilitating released prisoners and improving community health services.

You know a concept has hit the big time when it gets applied to the global music industry.

Now, microfinance - the technique that has been reducing poverty amongst women from Bangladesh to Bolivia - is available to struggling musicians around the world.

Through the power of social networking and a recent surge in the popularity of peer-to-peer lending, Calabash Music, a popular music download site internationally and the world's first "fair trade music" site, has launched a new initiative "Tune Your World" in which fans can "microfinance" the start up costs and recording activities of their favorite new and emerging artists' around the world.