In financial markets there is “smart money” and “dumb money”. These rather crude phrases refer to the fact that certain types of investors tend to make good decisions and others tend to make bad decisions. The “smart money” usually goes against the crowd and makes investments in things that the “crowd” currently dislikes. “Dumb money” investors tend to be trend followers and pile into the hottest fade of the moment. When someone says “follow the smart money”, they are urging you to invest in the things that the “smart money” investors are currently buying.
Social Actions, in partnership with The Skoll Foundation, PopTech, ideablob, andCivic Ventures, announced a new resource that will let people interested in social entrepreneurs “follow the smart money.” The resource is called the Social Entrepreneur API:
From the Social Actions press release:
The Social Entrepreneur API (Application Programming Interface) will be the first open database of information about social entrepreneurs who have won fellowships and awards from social enterprise funders.
The tool will allow philanthropists, investors, press, and fellow entrepreneurs to find social entrepreneurs based on keyword, location, cause area, population served, and a variety of other factors.
Facing more than a million nonprofits and a vast field of social entrepreneurs, we need smart ways to create filters so that the great opportunities do not get lost in the fire hose of information.
Now, the Skoll Foundation is launching a Social Entrepreneur Search Widget:
The widget can be customized to include all or a selection of funders participating in the API. You can put the widget on your own website if you like by grabbing it here.
The main thing I like about the API and widget is that it surfaces a set of vetted social entrepreneurs. By creating a searchable set of social entrepreneurs that have gone through the due diligence process of well resourced funders, the API makes it easier for individual donors to piggyback on the research of others.
Let’s say that last year a donor read about the nonprofit OneWorld Health’s successful work with pharmaceutical giant Roche to develop a drug for a prevalent, but not profitable, disease. The story is compelling, but the donor wonders if the article is telling the whole story. A quick search of the Social Entrepreneurship API Widget would have revealed that the founder of OneWorld Health passed the due diligence of the Schwab Foundation for Social Entrepreneurs. The info from the Schwab Foundation even includes detailed information about The Innovation, The Strategy and The Entrepreneur (not all funders have added this info to the API). While this doesn’t guarantee a thing, it still puts the donor way ahead of the game in terms of evaluating whether OneWorld Health is worth supporting.