Carrie Rich

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CEO of the Global Good Fund Carrie Rich joins us today to talk about how their US-based fellowship program for impact-driven entrepreneurs operates, and how it has led to the development of other projects such as the 360 Learning Assessment, the Global Impact Fund and Fund the Good.

Rich shares that her beginning as a social entrepreneur was largely influenced by her personal values and her business mentor. Her strong moral compass and supportive mentor influenced her to co-found the Global Good Fund eight years ago. The fund married young people who cared about making the world a better place using entrepreneurship for good, together with other experienced business executives who wanted to turn their professional success into social significance. By pairing the two populations, Rich hopes that this will serve as a catalyst for good social change in the world. At present, the Global Good Fund has supported more than 160 entrepreneurs across 40 countries, and has built a community of more than 40,000 global changemakers.

Having been exposed to a variety of social enterprises, Rich notes the trends she has noticed as of late regarding the focus of these companies, namely: education, health and healthcare, financial inclusion, economic mobility, and environmental sustainability. She then discusses how they formulated the 360 Leadership Assessment as a way to measure the leadership effectiveness of social entrepreneurs.  Rich continues to say that traditional entrepreneurs must catch up to social entrepreneurs, because the latter are comfortable navigating the boardroom, halls of power, and even the slump while the former are not. For social entrepreneurs, there's a willingness to connect with people at all aspects of the continuum in terms of social class and economic mobility, in a way that there isn't the same interest in traditional entrepreneurship.

Rich also details the founding of their sister company, the Global Impact Fund. It aims to invest in socially impactful companies that produce market leading returns. They wanted to demonstrate that individuals could invest and do good, and do well, at the same time.

Lastly, Rich explains their recently launched Fund the Good campaign as a way to engage individuals to participate in different master classes to raise funds for the Global Good Fund. With all of these projects, Rich envisions a world in ten years where there won't be such a field as impact investing, or social entrepreneurship, because traditional companies and traditional investors will have built impact into the way that we all do business. And as a result, the world will be a better place.

Rich’s key lessons and quotes from this episode were:

• “Our philosophy was that if you invest in a high potential young leader, that leader will, in turn, grow business and positively impact the world.” (05:00)
• “And now, during times when people are losing jobs, and there's high unemployment rates especially in young people, there's an opportunity to go out there and make a difference yourself and start a company that can positively impact the world.” (07:07)
• “When you invest in a high potential leader, that leader, in turn, grows the business and positively impacts society. And really, the idea is, let's have a ripple effect.” (10:26)
• “We're really trying to bring together people from across the world who want to get together and in their way, however big or small it is, do their part to make the world a better place. ” (24:37)
• “I trust that, in the future, there won't be such a field as impact investing, and there won't be such a field as social entrepreneurship, because traditional companies and traditional investors will have built impact into the way that we all do business. And as a result, the world will be a better place.” (25:22)

In this episode, we also talked about:

• How Global Good Fund was founded (2:15)
• Trends of social entrepreneurship (6:44)
• 360 Leadership Assessment as an evidence-based tool to measure leadership effectiveness (9:50)
• A social entrepreneur vs. A traditional entrepreneur (12:30)
• Qualifications for applying as a fellow to the Global Good Fund (13:11)
• Founding of the Global Impact Fund (18:59)
• How Fund the Good engages donors (23:47)

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Maiko Schaffrath  00:06

You are listening to Impact Hustlers, and I am your host, Maiko Schaffrath. I've made it my mission to inspire the next generation of entrepreneurs to solve some of the world's biggest social and environmental problems. And for this reason, I am speaking to some of the best entrepreneurs out there who are solving problems such as food waste, climate change, poverty, and homelessness. My goal is that Impact Hustlers will inspire you, either by starting an in tech business yourself, by joining a team of one or by taking a small step, whatever that may be, towards being part of the solution to the world's biggest problem. In today's episode, I speak to Carrie Rich, the CEO of the Global Good Fund. The Global Good Fund is based in the US and invest in impact driven entrepreneurs and supports them through a year-long virtual fellowship focused on leadership development. So far, the Fund has supported more than 160 entrepreneurs across 40 countries and has built a community of more than 40,000 Global changemakers. And with her team, Carrie has developed something called 360 Mirror. It's an evidence-based leadership assessment focused specifically on social entrepreneurs. And I'm really keen to learn more about the work she does every day with Global Good Fund. Welcome to Impact Hustlers, Carrie.

Carrie Rich  01:37

Thank you so much for having me. I'm thrilled to be here.

Maiko Schaffrath  01:40

Thank you very much. You started the Global Good Fund initially about eight years ago. And I think with that, you're probably somebody that's been in that impact space for, for longer than most. I think it's been a space that's more and more hyped in the last few years. And I think getting more and more serious in terms of investment as well, and people supporting social entrepreneurs. But tell us a bit more about how the world looked like eight years ago, which sounds like not that long ago, but it was quite different, right? In terms of social impact and why you started the Global Good Fund.

Carrie Rich  02:15

Yes. At the time, there were a lot of nonprofit organizations focusing on social impact. And one of the biggest shifts we've seen in the last eight years, is that there are way more for-profit companies that have built social impact into their business models. And so, eight years ago, when we started the Global Good Fund, we got a lot of applications from amazing social entrepreneurs all over the world, who were using nonprofits as a vehicle for social change. And today, we still see some nonprofits, but there's been a dramatic shift to actually the bulk are now for-profit companies that we see applying to be a Global Good Fund fellow. And my background was in healthcare. At the time I went to school at university, you couldn't study social entrepreneurship, which again, doesn't feel like that long ago. But you know, you couldn't study social entrepreneurship. So, I studied health, the business of learning how to help people and improve the community's health. And today, you know, throughout the world, you can learn to be a social entrepreneur actually starting even before university. So, there are a lot of trends that are making it a lot more easily accessible to become a social entrepreneur, invest in social entrepreneurship and care about what's happening domestically and throughout the world in terms of social impact.

Maiko Schaffrath  03:33

Amazing. So, what exactly was the problem at the time when you first started? How has that evolved? So, you said at the time, maybe there were more charities not so much profit driven, impact focused companies? Was that your mission to support more like for-profit, impact focused companies at the time, or did that change?

Carrie Rich  03:54

Well, actually, at the very beginning of the Global Good Fund, the issue for me was that great ideas seem to be evenly distributed throughout the world, but opportunity wasn't, and still isn't. And that's why we started the Global Good Fund. The real star of the Global Good Fund, for me was personal. It was that I had an amazing business mentor who ran a very large company. And, you know, I was just getting started in my career and fresh out of school and worked really hard and had a strong moral compass and wanted input and advice on how to do better. And he was an amazing mentor, who really sponsored me and mentored me, and pulled me up and put targeted capital behind my ideas. And I thought, "Gosh, how lucky am I to have such an incredible business mentor like this?" There are young people all over the world who have, I'm sure even better ideas than the ones I come up with and are socially impactful, and entrepreneurial in their thinking, and very driven and hardworking. They don't have a platform to showcase what they're doing and connect with business executives to help them scale and grow.  And our philosophy was that if you invest in a high potential young leader, that leader will, in turn, grow business and positively impact the world. And so, really, the medium was the message, my co-founder and I are the medium. And we're also the message. And we went out and found other young people who cared about making the world a better place using entrepreneurship for good and found other experienced business executives who wanted to turn their professional success into social significance. And pair those two populations as a catalyst for social good with some targeted capital behind that pairing. And what we're seeing today is an increased awareness I think, in all size companies, not just entrepreneurs, but actually large global corporations as well, that really want to cultivate a social impact mindset.  And that the greatest issues of our time can be addressed through entrepreneurial thinking, and through having a social impact mindset, especially today, during COVID. COVID exacerbated the greatest challenges of our time. And if we as companies, and entrepreneurs can approach solving business challenges with a social impact mindset and real leadership, this will make the world a better place. So, that was the impetus behind the Global Good Fund and maintains, we really stay true to our mission today.

Maiko Schaffrath  06:20

So definitely what you just mentioned, is something that's more needed than ever, even now, right? And I'd love to ask you about the current situation of social entrepreneurs, because you're seeing so many across different countries, really globally. Do you think they have something in common in terms of the problems that they're facing and building their companies and their ventures?

Carrie Rich  06:44

We see trends throughout the world, and actually industries that are really hot in terms of where social entrepreneurs are gravitating and truly able to make a difference. And what we're also seeing is that, you know, when the economy doesn't do well, it creates more of an opportunity for entrepreneurship. So, social entrepreneurship has been increasingly of interest anyway. And now, during times when people are losing jobs, and there's, you know, high unemployment rates especially in young people, you know, there's an opportunity to go out there, and make a difference yourself, and start a company that can positively impact the world. The five areas or industries where we're seeing great focus, and increased focus over the last few years include education, health and healthcare, financial inclusion, economic mobility, and environmental sustainability. And these are areas where we're finding that there's not only an opportunity to create incredible social impact, often around Sustainable Development Goals, but to create amazing social impact that's truly built into the business. But also, there's a way to do so that creates market leading financial returns, but you don't have to sacrifice financial returns to create a socially impactful business. And we're seeing that in large companies, and especially in startups that are social entrepreneur driven.

Maiko Schaffrath  08:10

Got it. Let's focus a bit actually on your fellowship and on your focus on leadership, because that's actually your big topic and what you support people with. You support leaders of startups, entrepreneurs, to become better leaders, right? So why did you identify that specific topic, something that you should focus on to make a big difference, and how does it work?

Carrie Rich  08:35

Sure. Well, when we first got started, we did a landscape analysis of what already existed in the field of social entrepreneurship. And we found that there were phenomenal gold standard organizations and investors that really focused on the business, but that there was no funding really allocated to, explicitly, to the leadership of social entrepreneurs. And we found that even in unrestricted capital, most social entrepreneurs are about other people, they're about the conserving the community, and so they wouldn't spend money on themselves. And as a result, their businesses couldn't grow as effectively, because they didn't invest in their own leadership. And they were so other oriented. And so, what we decided to do was start with an analysis of that landscape and then dig in and find, you know, how do we know if we would even be successful at cultivating the leadership of social entrepreneurs? And so, we took about six months to do a peer reviewed leadership, excuse me, a peer reviewed journal assessment of what existed in terms of measuring the leadership effectiveness of social entrepreneurs, and we really thought that was the way to go. And we could not find a tool that was evidence-based to validate this view or not. And so, we ended up creating an assessment called the 360 Leadership Assessment that we now use to measure the leadership effectiveness of social entrepreneurs, and of leaders in their companies and communities to say, "How effective am I at that only becoming a better leader, but also delivering social impact in my community?" And what we found through a third party study was that the entrepreneurs that we've been working with are actually three times more effective in raising traditional VC capital, as well as philanthropic capital as a result of investing in their leadership. And so, it confirms the hypothesis that when you invest in a high potential leader, that leader, in turn grows the business and positively impact society. And really, the idea is, let's have a ripple effect. If we can invest in one person, there's a really high potential and well-connected in how they're looking to contribute to the world. We can invest in that one person, and there'll be a ripple effect for positive good throughout the world.

Maiko Schaffrath  10:52

Got it. Do you see that there is any sort of gap between, like the typical social entrepreneurs you work with? And maybe what be considered mainstream entrepreneur, non-social entrepreneur, although that whole line is blurring a lot recently, right? Like, do you think there's a difference where maybe a lot of social entrepreneurs need to catch up a little bit? Or is it now really kind of playing on a level playing field?

Carrie Rich  11:18

I don't think the social entrepreneurs need to catch up, it may be the other way around. You know, what I find with social entrepreneurs, in particular, is that they're comfortable navigating the boardroom, and in the halls of power, and they're also comfortable navigating the slump. And most entrepreneurs are not comfortable with that. And so, there's a willingness and an eagerness to connect with people, and to have empathy through lived experience, through experiential learning. And to when you get to know your customers, or the people you're aiming to impact, and those people aren't, you know, sitting in their comfortable homes, buying off the internet, you know, it's uncomfortable, and it's really healthy. It's a way to truly connect with other people to understand, you know, our shared lived experience and do something about it. So, I think what I'm seeing is that, from a business standpoint, you know, if you're going to have a mission, you need to have a margin. You know, every entrepreneur needs to generate income in order to thrive. And in order to, in this case, to do more good. But what I see as a main difference between a social entrepreneur and a traditional entrepreneur, is that there's a willingness to connect with people at all aspects of the continuum in terms of social class and economic mobility, in a way that there isn't the same interest in traditional entrepreneurship.

Maiko Schaffrath  12:47

Amazing. And what is the message to entrepreneurs listening to this podcast that are maybe early on in their journey? What is the type of entrepreneur that's best suited to apply for your fellowship? What is the kind of profile that you're looking for?

Carrie Rich  13:03

The message is to keep going, that we believe in you, we want you to succeed, our world needs you, and our work is really important. And in terms of the Global Good Fund, we're looking for an entrepreneur who's full time committed to their enterprise and has at least one other person working with them so that we can help grow you as a leader. We're looking for someone who's been in existence, typically two to five years as a company so that they've either piloted an idea and are ready to go to market or have gone to market and are ready to expand. And someone who's extremely humble and coachable, who, you know, wants to take feedback and improve. And that's a pain, it can be a painful process. But the point of the Global Good Fund is to surround you with mentors and coaches who want to help make you better, so you can be a better leader and grow a more effective social impact company.

Maiko Schaffrath  13:53

Amazing. Now, I'd like to focus a bit on your setup, right? So, you said that you're actually very passionate and very passionate in supporting for-profit entrepreneurs who have a social mission. The Global Good Fund is registered as a charity, right? And I'd love to learn a bit more about the reasoning behind that. And I think you're also working on like a venture fund, which is probably a bit of a different setup. So, tell us more about that, and why you decided to set up the way you did.

Carrie Rich  14:23

Yes. So, the Global Good Fund supports both nonprofit and for-profit entrepreneurs. All of the entrepreneurs we support need to have an interest in generating revenue and be profitable. Because again, we believe that if you don't have a margin, there is no mission. And so, whether you're a nonprofit or for-profit, you have to have an interest in making money and doing good for the world. And what we've seen as a shift in the percentages of entrepreneurs that are applying presenting a for-profit, and I think some of the tax statuses of companies like for example in the US, the B Corporation has increased the level of interest in a for-profit company that can also do good. But just in general, we are seeing more increase in for-profit companies. But we, the Global Good Fund supports both nonprofit and for-profit businesses. As the leader of the Global Good Fund, and co-founder, why did we set up this nonprofit organization? And the truth behind that story is that, you know, I was not planning on starting a nonprofit or any company, actually. I was working in health care; I loved the business of helping people and improving the health of the community. And I had a wonderful boss, who was also a mentor and became the co-founder of the Global Good Fund. And he gave me some lunch money for my birthday, and said, instead of taking you and your colleagues to lunch for your birthday, why don't you go live out this idea? That you can, you know, pair emerging social entrepreneurs with seasoned business executives and mentor them for social good? And I thought," What am I going to do with some lunch money?" You know, that's not going to make a big difference. And so, we ended up fundraising together and raising a couple million dollars. And, you know, like I said, I was on track to grow within healthcare. So, I did not have an interest in starting an organization of any kind. And eventually, we formed a board and started a fellowship program, and realized that someone needed to run the enterprise. And because we didn't have a legal entity set up, we actually defaulted to a nonprofit. And what that did was create an opportunity to fundraise, obviously, which is culturally part of the US fabric. But on the flip side, it created, it was really difficult to scale. And we want to support more and more entrepreneurs each year. And so, we took a few approaches to figure out how we could grow. And one of those was we found that the tools and services we use, including the 360 Leadership Assessment, to run the fellowship program were actually of interest to other organizations and corporations, in terms of growing leaders within their entities that had a social impact mindset. And so, about five years ago, we started selling these products and services to other like-minded companies that want to have social impact and didn't quite know how to get there or wanted to just get started, and were doing a lot already, and wanting to take it to the next level. So, that's one way that the Global Good Fund as a nonprofit also has a small income stream. And then we started also partnering with companies and family offices that wanted to identify a specific challenge and use their resources to address that issue, so things like Women's Entrepreneurship or financial inclusion, we now run fellowships that target these types, entrepreneurs who are women or entrepreneur who was working on women-focused issues, and entrepreneurs that are, you know, addressing the issues of financial inclusion. And we support those entrepreneurs to help them scale. What started happening about four years ago, when you mentioned impact investing was that traditional VC started approaching the Global Good Fund and saying, you know, "Who do you have for us to invest in?" Which was wonderful, because, you know, suddenly, traditional VCs wanted to invest in all kinds of companies, including socially impactful businesses that could produce market leading returns. And so, because Global Good Fund's spent seven months doing due diligence on these entrepreneurs that apply to Global Good Fund to be a fellow. And then we effectively direct the companies over the course of a year through our 12-month virtual fellowship program. We also monitor the leadership development, enterprise growth and social impact of these companies, we knew which social impact companies to refer to the VCs. And so, the VCs loved it, because they got access to deal flow. The entrepreneurs loved it because they got access to capital. And the nonprofit was sitting there with nothing to show for it. So, about four years ago, we've created a sister company called the Global Impact Fund, which exists to invest in socially impactful companies that produce market leading returns. And we wanted to demonstrate that most people at the time thought, you know, "I give philanthropically through one pocket, and I invest from a different pocket." And we wanted to demonstrate that you could invest and do good and do well, at the same time. And secondly, that the small nonprofit, had access to phenomenal deal flow in terms of social entrepreneurs who are delivering major social impact, also financial returns. And when we picked our head up four years later, it turns out that 80% of our portfolio of the VC fund is led by people of color and women. And so, that's not surprising given that over half of the entrepreneurs at the Global Good Fund are people of color and women, and so it's, given what's going on in the world today, it's especially relevant. And that's why we've, you know, continue to double down on what we've been doing for the last eight years as an organization.

Maiko Schaffrath  20:03

Amazing. And for the Global Good Fund itself, who are the main funders of that? Or what type of investors do you have that actually, are you mainly still funded by donors? Or is the revenue streams that you just talked about, is that picking up more and more of the companies working with you?

Carrie Rich  20:21

Yeah. So, we're a nonprofit that can generate income through philanthropy. So, we definitely focus on philanthropy. And in the last five years, we've grown what we call Leadership Services, which is partnering with other nonprofit organizations as well as companies, including some very large corporations, that are interested in creating a social impact mindset within their companies. And that is a form of revenue for the Global Good Fund. And then long term with this Impact Fund, the aim is to have part of the carry, go back to support the Global Good Fund, so that for the entrepreneurs who receive, follow on investment, at that part of that carry from the VC fund will go back to support the Global Good Fund and continue to invest in diverse entrepreneurs.

Maiko Schaffrath  21:07

It's really quite interesting to see a setup where you're taking advantages of both setups, both running a charity, and also like a VC fund that's kind of looking at returns and financial returns. At the same time, it's really, really interesting to see that. And we've had actually entrepreneurs on the podcast that played off similar setups, obviously in different contexts, completely different goals, etc. But we had Alex from Bean for example here, which is a UK startup. And they've set up a charity and a for-profit social venture to basically fight homelessness, and crowdfund for the education of homeless people, so that they could get the required certifications to get a job, and to get back into the job market. They've done a similar setup, obviously completely different problem that they're looking at, and completely different setup. But it's, I think it's quite interesting to be creative with these models as well. And not to necessarily say, Oh, you've got to be a charity, it's evil to turn a profit or you shouldn't be a charity, you should definitely turn to profit, it's evil to be a charity, or it's inefficient, right? I think it's interesting that every purpose may have a different form. And I think for anybody that's starting out to have similar initiatives, that's really good to keep in mind, I think. Like, don't be dogmatic with what form you choose, right?

Carrie Rich  22:36

Sure. And at the end of the day, there are ways to be efficient with both models. And really, the model, for me is, it's just a tax vehicle. You know, there are great examples of both nonprofits and for profits that have scaled. And the point of this is to be able to grow our mission. And that's, you know, that's how we look at it, regardless of whether it's a for-profit or nonprofit.

Maiko Schaffrath  23:01

That's great. I've seen that you've recently announced the Fund the Good Campaign. And you're actually focusing on different social issues, five different issues that you want to focus your efforts on. I think you're going to run the big event as well, with Arlen Hamilton I saw, and you're kind of putting a lot of resources out there as well. Can you tell us more about that campaign?

Carrie Rich  23:26

Yes. So, one of the things that we've noticed is that it's really meaningful and engaging to support all levels of donors. But it doesn't take writing this enormous check or making a big donation online to make a difference that for small amounts of money, we can all get together to, we can all come together to do good. And so, we created Fund the Good as a way to band together and do good in the world. And what's involved, we have master classes that are ongoing right now, that are really fun ways. We've learned how to cook ravioli, dance, do wine tasting, kids' etiquette, all kinds of different master classes that for $20, you can participate online, and have a really great time connecting with other peers who want to learn a fun new skill, and do it in a way where 100% of the proceeds benefit the Global Good Fund and social entrepreneurs around the globe. And following that, we'll have several days of conversations that are led by our social entrepreneurs leading up to our December 9th event with special guest Arlen Hamilton, who's an amazing VC, who's doing really impactful investing across the US and we're very excited to have a conversation with her. So, we're really trying to bring together people from across the world who want to get together and in their way, however big or small it is, do their part to make the world a better place. And we welcome participation in all different sizes and, and time is really an amazing contribution when you can connect with other people who share the same values and mission. It's amazing what happens when we come together.

Maiko Schaffrath  25:04

Amazing. I got my famous last question or not so famous last question, which is, how does the world look like in 10 years if the Global Fund, Global Good Fund succeeds in their mission? And I mean, you're already succeeding. But imagine in 10 years’ time, how does the world look like?

Carrie Rich  25:22

I trust that, in the future, there won't be such a field as impact investing. And there won't be such a field as social entrepreneurship, because traditional companies and traditional investors will have built impact into the way that we all do business. And as a result, the world will be a better place.

Maiko Schaffrath  25:41

That's an amazing reason to have. And it's great to see how much you're doing to make that a reality every day with your programs. And thanks very much for joining us today.

Carrie Rich  25:52

Thank you again for having me. It's been a pleasure.

Maiko Schaffrath  25:54

Thank you, Carrie. See you soon.