We swim in a cloud of technology at our fingertips 24/7 thanks to the ubiquitous mobile internet, and we take these technologies for granted. However, just in the US, in addition to the individual suffering, every day we experience over $2.5 billion in economic losses associated with some of our society’s most complex problems. The one million nonprofit organizations trying to be of help lack proper technology to deliver on their mission in a more financially efficient way. Some people point at the lack of economic incentives for entrepreneurs to create technology to address these problems, but perhaps there is also a lack of understanding of a simple equation: it is possible to do well while doing good.
Our Big Idea
How can we use the same technologies and business models to help social causes have a more significant impact? Our Big Idea is Giving Tech Labs as a model to create sustainable public interest technology ventures. Our big idea is making an open call to focus on financial return on investment (ROI) as much as the return on Social Impact (ROSOCI) to show it is possible to do well while doing good and inspire the next generation of entrepreneurs.
Connecting the dots with the past
This path started in 1988, during my senior year in college, when I got my first personal computer and created my first software venture. At the moment, I did not realize that beginning would lead me here, because life only makes sense when you stop, look back, and connect the dots.
That first step took me through a fantastic journey in technology, both as an entrepreneur, launching four companies in the past and most recently running Giving Tech Labs, which is incubating four public interest technology ventures. I also had the privilege to be a team member in companies like Microsoft that changed the world.
I have had the opportunity to live in several countries and meet amazing people. I have learned a lot from each step. One pivotal step was a meeting with Jeff Raikesback in 2015 when we talked about catalytic philanthropy and impact investment to unleash tech innovation that addresses social issues. This led to creating Giving Tech Labs with my co-founder Shelly Cano Kurtz and in partnership with Jeff and Tricia Raikes. Today, we focus on creating Sustainable Public Interest Technology Ventures.
The tipping point that led us to this idea
Jeff Raikes and I worked together at Microsoft and built a strong professional relationship that with the years became a treasured friendship. In 2015, after finishing his tenure as the CEO at the Bill & Melinda Gates Foundation, we discussed how catalytic philanthropy and impact investing address complex problems. In essence, one institution act as the catalyst and innovates a solution that a larger entity might be wary of attempting, and proves that it is both helpful and viable, and then relies on devising a recurring cash flow to continue investing and maintaining the original venture.
That concept inspired the creation of Giving Tech Lab to create Sustainable Public Interest Technology Ventures.
What do we need to lead this idea to widespread adoption?
The opportunity is to align government, NGOs, Academia and the private sector to become ‘social risk takers’ and to have interventions in the form of sustainable social enterprises and prove the efficacy of their impact. This shows the way to a market opportunity or highlighting the fact that there is a public social good that needs to be invested in.
We can learn from the Ford Foundation when in the ’50s they invested into the revamping of law school curricula, much of it aimed at re-orienting law toward the cause of “social change” and rendered so much progress through Public Interest Law.
It is our opportunity and moment to drive a similar change in the area of Tech for Public Interest or Tech4PI, combining it with sustainability models to motivate the next generation of entrepreneurs and creative minds that can work with the subject matter experts that genuinely understand the causes and potential solutions for these challenges in society.
A significant challenge is to achieve a behavioral change in society where all of us measure success not only in terms of ROI but also in terms of ROSOCI (Return of Social Impact).
Unleashing Capital for Tech for Public Interest
We work with Impact Investors and Catalytic Philanthropists; either foundations or individuals.
An Impact Investment Opportunity is to sponsor the creation of more Innovation labs that realize the full potential of the Tech for Public Interest movement, becoming a model for doing well while also doing good. It is an opportunity to shift a combined focus to return on social impact – rosoci.
Between 2000 and 2016, the Venture Capital Industry offered Median returns of -1% to 15% annualized over fund life. While Returns on Investment are not guaranteed, Software as a Service (SaaS) solutions monetized via subscription models is a proven monetization mechanism for the technologies that the social sector needs and we expect 3% to 5% annual distributions from those ventures.
In addition to the ROI goal, each lab also has measurable Social Impact (ROSOCI) goals as each lab acts as a local catalyst of wealth and social good by incubating two sustainable tech social ventures per year. These labs and their social tech ventures are the core element of Social Return of the Investment, while distributions from the generated revenues or liquidity events represent the ROI.