In an unexpected, but welcome, move, two prestigious and important actors in the social impact investing sector have announced to their respective memberships a full-on merger. SJF Institute and Investors' Circle will combine boards and senior management effective immediately.
In the nonprofit and social impact sectors, mergers are rare. Talk about eliminating duplication and leveraging resources is commonplace, but the incentives for combining forces are frequently theoretical and threadbare. As I have learned from convening the Opportunity Collaboration, partnering and alliance-building often serve as a first baby steps on the long, steep and often unreached merger journey.
In the private sector, the singular concern is Will the merged companies make more money? In the social sector, missions must align and reinforce each organization's core purpose as well as increase financial viability.
The combined forces of the SJF Institute and Investors' Circle will mean one-stop shopping for social entrepreneurs. Companies with a larger social purpose can now access a suite of services, ranging from direct technical assistance to venture capital.
Frequently, a merger means unemployment for senior management and, as in every walk of life, leaders seldom compromise when their own survival is on the line. Unlike in the private sector, there are no CEO compensation exit packages to soften the financial impact of the unemployment line.
In this case, Investors' Circle Interim CEO Suzanne Biegel never intended to make the position into a permanent career. Giving truth to her personal card title of Catalyst-at-Large, she will graciously step aside to allow both organizations to reach their full potential as one.
As Mark Hanis, Genocide Intervention Network co-founder and former Opportunity Collaboration Delegate, smartly summarizes in a Social Edge online discussion, his successful shepherding of a merger with the Save Darfur Coalition was built on a history of shared campaigns and a vision for greater impact. It was also driven by a measure of fear or, put more delicately, "We also saw the potential to lose momentum, to lose activists and funders to other causes as the crisis in Darfur gradually faded from news headlines."
Investors' Circle with its 150 angel investors and SJF Institute with its experience supporting over 1,500 impact entrepreneurs already have been working together for years. For both groups, staying visible in the rapidly emerging social impact investing space is a necessity. New players enter the field daily.
For good or ill, former British Minister Tony Blair challenged his party and his country to modernize. In his memoir My Political Life, he wryly recalls, "I bumped up against the single most difficult thing about making change in any organization. It's what I call 'taking away the givens.'"
Investors' Circle and SJF Institute, against the odds, removed the givens and moved boldly towards, as SJF Institute CEO Bonny Moellenbrock states, "... a vibrant capital marketplace to put more impact entrepreneurs on a clear path to strong financial growth... We know this is the pipeline that later stage institutional investors are seeking. When this happens, everyone wins: the entrepreneurs, the investors, communities, and the planet."