Recently I interviewed a candidate for a new role at ClearlySo. During the interview she asked me why I founded the organisation and what the thinking was behind it.
After leaving the City, I wanted to do something that would make a social impact. Jobs at UBS, Paribas and Lehman certainly didn't fall into that category. After a few years in conventional venture capital, I took a chance, together with some colleagues, to raise impact investment funds in partnership with The Big Issue. This was in 2000/01. We were not successful, so I began to search for other ways to make a difference.
In the 1990s I had been quite active in the Liberal Democrat party and even stood as a candidate in the 1997 general election. Fortunately, I lost and realised that party politics was not the best way for me to generate meaningful social impact. I briefly tried a part-time role at a leading investment bank and realised that was not the way forward for me either.
In the mid-2000s, I had the opportunity simultaneously to chair a large national charity and a small, early-stage, start-up business. I found that the charity, which had only recently considered, then rejected, a merger, was not wholly to my liking. Although the organisation raised lots of money and had considerable visibility, it was not as focused as I would have liked it to be on the cost-effectiveness of the impact it generated. Furthermore, I found myself unable to improve this and other aspects, despite being chair. In the end, I resigned.
The early-stage start-up business that I had the privilege to engage with was JustGiving. With a mere £5m to £6m of angel capital, it was able to build the world's leading online charitable fundraising business, which now dominates the sector. From the start, the two leaders, Zarine Kharas and Anne-Marie Huby, were focused on making the business successful by controlling costs and keeping a razor-like focus on customer satisfaction. Their theory was that if they could build a successful, well-run business it would generate far more social impact.
This is something that is too often neglected in the impact investment and enterprise sector. Unless a business is sustainable, it isn't really a business. To achieve massive social impact, it has to be really great - and JustGiving has helped to raise about $3.5bn for the charitable sector. The Body Shop is another excellent example of such a business. To put it another way, social impact and financial success are positively correlated.
I found how I could make a difference; JustGiving showed me the path. ClearlySo was founded with one simple aim - to create 100 JustGivings.
Rodney Schwartz is chief executive of ClearlySo, which helps social entrepreneurs raise capital
