After stock markets worldwide collapsed, bringing down 401Ks and people’s personal assets, common sense would tell you that traditional assumptions of the market and modern portfolio theory needs to be reevaluated. We need to move beyond the “OR”: I either maximize profits OR give my money away. The social capital markets offer investors an opportunity to both earn a return on their investment while having a social impact – creating a more holistic return on their investments.

It’s encouraging that despite the economic downturn, social investment funds are continuing to grow in their asset bases are earning steady returns. Additionally, there is growing interest among large institutional investors who are beginning to look at the social capital marketplace as “smart strategy”. However there is a ways to go in developing the marketplace to make it a more widely accepted medium for investment.

Going back to the points made yesterday, the advancement of this sector is going to require ultra-transparency and generally accepted metrics that illustrate the social impact of an investment, or the social return on investment (SROI). Furthermore, we need to take the time to develop the infrastructure that will allow the sector to scale. New standards like IRIS and GIIRS should really help in bridging the divide between traditional financial investors and the social capital marketplace.