Funding

Societal innovation needs several funding mechanisms which guarantee the not-for-profit nature, applicability and openness of the innovations. Openness means that innovations can after their initial creation be further developed through crowdsourcing, according to set rules. Open innovations are for example Wikipedia and Linux.

Applicability means that the innovation is dynamically scalable irrespective of geographic location, culture and other conditions. This type of scalable innovations are for example the Arctic Garde City and Iron College model. The not-for-profit nature of innovations guarantee that the inventions belong to everyone and the inventions can, for example, be the object of export as “cultural development aid”, because culture and education belong to everyone.

Philanthropic investments seek target

The potential investors in societal innovation do currently not find their target. There are a lot of private persons, foundations and trusts that would like to invest, but they avoid targets chosen by risk investors and speculative money. Nor are ethically unreliable targets and those with questionable goals object for philanthropic investment.

When we change the word investment into a resource philanthropic investment and resourcing can take the form of offices and other space, tools and workforce. In this sense a philanthropic investor can give his resources to promote societal innovations.

Philanthropic return on investment is, in addition to or instead of financial profit better quality and functioning products and services, less environmental overload, local economic activity, rise of human capital, accessibility of education and culture, enabling the practise of arts, ethically and economically driven production and city that is nice to live in.

The individual projects funded by risky investment portfolios and the innovation system are unreliable investments into narrow sectors and their purpose is to generate profit for a group of shareholders or a limited number of startup founders. Only some 10% of the stratusp are allowed to continue their business, meaning that losses are huge and the efficiency of startup funding is weak.

Startup funding carries the stigma of one idea and blind focus on selling an unfinished produce well over the market price and after the rip-off, the exploitation and abandon of the next naive startup. Expressions”hit and run” ja “take the money and run” define the current startup investments.

In the end, the startup entrepreneur is merely a poor bystander as the risk investor dictates his conditions for a quick exit strategy.

Philanthropic investment seeks models

Supporting societal innovations can be done in the form of a traditional funding, but also office or work space, apartment, house or other real estate, why not a farm. Whatever concrete resource may be better investment than mere money – both for the donator and the receiver. This way the investor sees his resources being part of a visionary investment and he can get involved in the development process and in carrying out projects of public utility.

Thanks to the invested resources ensuring the practicalities, the startup can focus whole-heartedly and intensively on the most important, the development work.

It is important to understand that startups that create societal innovations that benefit human capital are totally different from the current startup activity that seeks quick monetisation: greater good is sought instead of quick money, large systemic concepts of hundreds of variables are being planned instead of one idea, and the development work can last years. Because societal innovation does not seek quick monetisation, it needs intelligent, wise and far-sighted investors.

Societal innovation startups profit the most from a mixture of investments: offices, others space, equipment, tools, mentoring and money.