Monday, January 5, 2009

Nell Edgington of Social Velocity Talks about Socially Responsible Investing

Nell Edgington of Social Velocity Talks about Socially Responsible Investing

How did you come to Austin?
My husband and I were in graduate school in Dallas Chicago and we moved to Austin after that. Austin is the only place we wanted to live. We love it. We’ve been here for the past six years.

How did you get involved in this idea?

I’ve been working on this idea for about a year. I knew I wanted to start a business in this sector space and thought about a venture philanthropy fund. A VC fund except it makes investments into non-profits. I’ve been looking at various models in other cities. San Francisco and Boston have funds like these in which there is a social return although not a financial one. For Austin, I’m trying to build a fund to help non-profits grow and scale their business beyond incremental growth. We help them create that business plan and then pitch to investors for that growth capital. It’s a new idea in Austin to pitch for growth capital for a non-profit. We also help them diversify their revenue stream to earned income, sponsorship and more. This is an idea whose time has come and I believe it is timely for Austin. You probably know of several companies that have a social result.

What are some examples of companies in this area?

One example is Citizens Schools which is an after school program for middle school students. so Tthey bring people in who have special skills such as how to create a web site so teenagers find a connection to school. It’s proven to raise retention all the way through high school. The program works well on the national level but here in Austin they struggle because they are underfunded. We’re putting a plan together on what would growth look like. If you could grow this program through Austinto all the Austin middle schools that could benefit from it you would see a dramatic increase in retention rates in both middle and high school. Austin’s dropout rate is above the national average. It would take $300K to $500K growth capital for this program.

What are some examples of investment groups that do this?

Investors Circle in San Francisco which is similar to an angel network. They come together twice a year and review social and financial return opportunities. For example, they’ll invest in solar power companies or a company that recycles books with a portion of the revenues going to a non-profit. There are similar groups in Denver, Boston, LA, and New York. There’s a movement throughout the country in which investors seek a social return in addition to a financial return.

Any local company examples that have a social benefit in addition to a financial one?

Another example is Blue Avocado here in Austin which replaces plastic grocery bags with a reusable bag system which helps the environment.

Where can investors find out more about this?

I write a blog that focuses on this area.

Best regards,
Hall T.

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