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Communities need private capital and public efforts to reap "resilience dividend"

by Astrid Zweynert | azweynert | Thomson Reuters Foundation
Wednesday, 10 September 2014 17:47 GMT

An infographic by the Rockefeller Foundation displays the concept of building resilient communities. THOMSON REUTERS FOUNDATION/Handout

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* Any views expressed in this opinion piece are those of the author and not of Thomson Reuters Foundation.

More job opportunities, better coordination among government silos and greater social cohesion are among benefits to be gained from innovations in social finance

SAN FRANCISCO (Thomson Reuters Foundation) - When Southern Pacific Railroad President Edward Harriman heard news in 1906 that an earthquake had decimated San Francisco, he led the first train west to assess how the railroad might assist in the recovery.

When he arrived in nearby Oakland, he immediately ordered tracks to be laid into the most devastated parts of town to carry out people and debris. He met local officials to kick-start the rebuilding process and sent telegrams across the country pleading for both private and public funds.

Harriman gave $200,000 of his own fortune directly to the cause. "The rich and poor have to be cared for alike," he wrote in a telegram home.

His approach was the beginning of a rich history of combining meaning and money in the Bay Area of California, Judith Rodin, president of the Rockefeller Foundation, pointed out in a speech last week at SOCAP, an annual conference that brings together social entrepreneurs, non-profits and investors to help accelerate the flow of capital to social good.

"Private capital is a powerful tool for helping to solve humanity's greatest challenges," Rodin said. "Which is critical, because philanthropy and government only have billions between us. Yet private markets hold an estimated $210 trillion - $80 trillion in pension and institutional funds alone."

Rodin said that in today's world, shocks such as earthquakes, droughts, flooding and infectious diseases, as well as slower-burning stresses such as joblessness and civil unrest, are coming faster and staying longer.

"Through our resilience work, which over the course of the last decade has funded or committed more than a half-billion dollars, we have learned that investing in resilience not only mitigates the damage caused by disasters and stresses, but also creates benefits for people in good times as well as bad."

"We call this the resilience dividend," Rodin said. "Some of the benefits we've seen include more job opportunities, lower operating risks for businesses, better coordination among government silos and greater social cohesion. To help more cities and rural communities achieve the resilience dividend, we are pursuing innovations in both financial mechanisms and models."

The Rockefeller Foundation's "100 Resilient Cities" challenge, a $100 million programme, focuses on building urban resilience in 100 cities worldwide.

It has created a platform of resilience goods and services for the cities, leveraging hundreds of millions of dollars more for the cities from entities as diverse as computer services and software firm Palantir, the International Finance Corporation, non-profit software company Ushahidi and insurer Swiss Re.

INVESTMENT CHOICES MATTER 

Last month's Bay Area earthquake did not result in the devastating fires of 1906, but it did serve as a reminder of how crucial it is to create and support resilient systems by choosing our investments wisely, Rodin told delegates.

Stresses and shocks to communities and economies reinforce the relevance and necessity of investment in robust systems as well as individual organisations, other speakers at SOCAP agreed.

Kevin Jones, co-founder of SOCAP, Antony Bugg-Levine of Nonprofit Finance Fund and Ronald Cohen, head of the G8 Social Impact Investment Taskforce, stressed the importance of investment in infrastructure and building resilience in communities, a key theme at this year's conference.

"There is no such thing as a sustainable business, only a sustainable system,” said Judy Wicks of Philadelphia's White Dog Café, a leader in the U.S. local food movement. 

One endeavour to drive change is just one part of an ecosystem, said Willy Foote, founder and chief executive of Root Capital, a non-profit social investment fund, working with small and growing agricultural businesses in poor, environmentally vulnerable places in Africa and Latin America.

Jones said SOCAP had been growing year after year because of the “unlikely ally” effect: the interdependence that arises when private and public and non-profit collide. Eight years after its founding, SOCAP now welcomes hundreds of “unlikely allies”, from corporations trying to access new markets in low-income communities to small-scale entrepreneurs, he said.

 

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