CR Leaders: Stuart Yasgur, Managing Director, Ashoka Social Financial Services

AccountAbility Interviews Stuart Yasgur, Managing Director, Ashoka Social Financial Services

Mr. Yasgur leads Ashoka’s Social Financial Services team, where he engages across Ashoka’s subject matter activity with a distinct focus on using market forces to address social challenges at large scale.

At Ashoka, Mr. Yasgur has worked with others to initiate efforts that have mobilized more than $500 million in funding for social entrepreneurs. He has also worked with the Changemakers Team at Ashoka to engage with the G20 through the Toronto, Seoul and Los Cabos summits and helped form partnerships with leading financial institutions and corporations.

Earlier in his career, Mr. Yasgur was Managing Partner of a New York-based consultancy and has more than a decade of experience working with start-up and growth stage companies. He frequently speaks on the role of social innovation, and has taught at New York University and the London School of Economics.

Mr. Yasgur received a Ph.D. degree from the London School of Economics, a Master’s degree from Columbia University, and a Bachelor’s degree from Cornell University.


AccountAbility (AA): What is Ashoka Social Financial Services mission – and what is your role at the organization?

Stuart Yasgur (SY): Ashoka’s mission is to create a world in which every person understands their ability to address social challenges as they arise around them, or as we describe it, a world in which everyone is a changemaker. Within that context, my primary role at Ashoka is to lead the Ashoka Social Financial Services team. This area of work grew from an understanding that one of the largest impediments social entrepreneurs face is timely and appropriate access to capital. After a number of years helping to foster a change in the financial ecosystem for social entrepreneurs, we’ve increasingly moved towards understanding how we can use markets as a tool to address social challenges on a large scale.

AA: How does Ashoka measure impact? How do you weigh the importance of pure financial return versus social return?

SY: Ashoka is focused either on what we call systems change or framework change. There’s a famous saying – it’s a good thing to give somebody a fish, it’s better to teach him how to fish. As social entrepreneurs, our Fellows won’t rest until they revolutionize the fishing industry. So that’s what we mean by systemic change. It can be in any subject matter whatsoever in any of the 70 countries around the world in which we work. We’re looking at social entrepreneurs who have ways to change systems in society for the benefit of all. We’re entirely open in that regard, but incredibly rigorous in terms of doing due diligence to vet the things we support to make sure they have the most significant impact possible on the systemic level. In terms of measuring, instead of thinking about how many people we’ve helped educate or helped feed or provide jobs for, we look for indicators of changing systems in society. I’ll mention 2 of them: first, over 90% of the social entrepreneurs we support change the basic practices in their industries within 5 years of our supporting them. Second, 50% will have changed national policy within that same 5-year period.

AA: How much does your organization look to develop partnerships to accomplish social goals? And can you provide an example of a successful partnership that Ashoka has entered into?

SY: Partnerships are crucial for us to scale impact. For example, a large asset management firm came to us and said they wanted to create what would at the time be the largest social investment fund in the world. We were able to bring together a group of different social entrepreneurs to provide them with a wealth of experience that they could build on as they were developing this new part of their business. From our perspective it’s fruitful because large corporations like this have the ability to mobilize resources that we simply couldn’t in the non-profit sector. By creating partnerships between citizen sector organizations and large financial institutions we can foster social innovation in a way we couldn’t otherwise and provide entry to otherwise difficult to access markets. Each can benefit more through partnership than either could alone.

AA: Social entrepreneurship seems to focus mostly on developing countries. Is this a misperception or a reality?

SY: I think it’s a misconception, but there may be a natural reason for it. For example, Ashoka started in India over 30 years ago, so there is over 30 years of history of building a network and a community of social entrepreneurs in India, and then expanding into Asia, Africa and Latin America. That’s a long track record with powerful examples. On the other hand, Ashoka has been in Europe for over a decade. For the last 14 years there’s been a very active community of social entrepreneurs within the United States, where there are well over 100 leading social entrepreneurs dealing with the most vital issues, from health care innovations to changing the way we fund renewable energy production. People are just becoming aware of the great work social entrepreneurs are doing in developed countries as the field matures.

AA: Impact investing has made a big splash in recent years but faces questions from some people about its long-term viability. What do you think about these questions, and where do you see impact investing going in the next 5-10 years?

SY: Impact investing is making a really important contribution to the evolution of how we finance solutions to social challenges. My own view is that it is a precursor to what’s probably the larger correction in the marketplace. The fundamental role of the market is to create value for people who live within societies, and increasingly people in large corporations are recognizing that if they want to have sustainable financial viability and continue to grow at the rates they need to in order to meet shareholder expectations, business needs to be about more than profit. It also needs to be about creating value. That’s also what their employees demand, so if you’re going to compete for the best talent, you need to realize that your value proposition needs to be not only about the material compensation but also how you enable people to make a meaningful contribution in the world around them. It should be the cornerstone of our economic activity. Impact investing in some ways is the tip of the spear of a much larger correction and we’re seeing that being called for from all parts of society – large corporations, employees, young individuals who are looking to enter the labor market, communities and governments who are trying to create viable, stable and fruitful societies. I think this is the beginning of something much more significant.

AA: Would it be fair to say that in case there is a contradiction in a specific investment between the financial return for the investor and larger societal return, the latter should take prominence?

SY: Business pioneers recognize that when they have to make those kinds of tradeoffs, they may not be in the right situations. So increasingly what they’re starting to do is look for different kinds of opportunity landscapes. For example, private equity funds are incorporating into their due diligence an assessment of how well their investees or potential investees are doing on the social and environmental fronts, because success there is critical for success on the financial front. If you’re forced to make too many tradeoffs, you’re just not looking for the right kind of opportunities. Increasingly large corporations are starting to follow suit as they recognize that the next 100 years of economic growth are going to come not by merely servicing people who have wealth today, but from creating wealth and prosperity for everyone in society.