Our name itself embodies perhaps our greatest challenge: historically, the words social (i.e. of a community) and markets (i.e. the allocations of resources) have forged an ambivalent alliance.  While we firmly believe market attributes like evaluation and accountability are good for the social sector, we also believe there are limits to how far the market model can be productively pushed, and that these limits will become clearer as socialmarkets evolves.

The non-profit sector is not immune to the internet's proven power to turn old business models on their heads.  Communities of increasingly empowered donors, agencies and related stakeholders are already blogging, wiki-ing and networking their way to higher expectations of transparency and accountability.

We strongly support the notion that better tracking of the resources flowing into the non-profit sector is better for every stakeholder within it.  For starters, we can offer donors who want to incorporate such metrics into their funding decisions more than the ambiguous data currently on offer, e.g. IRS 990s and pie charts of administrative expense percentages.

SROI is a messy idea, insisting on quantifying what is always difficult (e.g. public parks) and often distasteful (e.g. homelessness) to quantify.  We believe in tackling it anyway, because the non-profit marketplace made possible only by incorporating metrics like SROI will ultimately benefit all non-profits, difficult and distasteful alike.

Market economics is itself evolving to include many of the non-economic elements classically labeled 'external' to its graphs and related calculi.  Producers, consumers, governments and NGOs are unlikely allies in a conspiracy already bearing bizarre new fruit like the European market for carbon trading - a mighty validation of the SROI concept irrespective of its success or failure.

Classic market economics continues to generate the increasing wealth it promises, unfortunately with decreasing uniformity in the distribution it ignores. We believe that socialmarkets, in partnership with a more enlightened and empowered donor community, can encourage a larger slice of the larger wealth pie for the non-profit sector, narrowing the growing rich-poor chasm.

We see a reflection of socialmarkets itself in the newest and wealthiest entrants into the philanthropic arena, at the cross-product of faith in technology and public service. Web-based and financial enterprises are the source of much of the new cash flowing into the sector, and socialmarket's quant approach to building a stronger sector is an easy sell to the people behind it.

Economies of scale have pushed internet-based marketing and distribution towards a 'long tail' model, where the aggregation of many low-volume sales overwhelm those of the few best-sellers.  By providing non-profits with visibility for even their smallest niche projects, and providing donors with data on those project's risks and benefits, socialmarkets can help realize the larger, more powerful sector anticipated by the long tail.

We can't talk about transparency, accountability and honest evaluation without addressing the contentious topic of failure.  As both a lesson and as a metric, failure is potentially productive at every level of socialmarkets - from the repeated return of one homeless person to a shelter, to the repeated attempts to attach a value like SROI to such a story.

Socialmarkets is just one piece of the enormously complex puzzle that characterizes the sector's scope and trajectory.  That complexity allows sufficient space for the peaceful co-existence of multiple models of funder and fundee definitions and relationships; socialmarkets is only one.