How do you build trust between two parties when you don’t actually meet, or have the chance to get to know each other? Anonymous social impact investors are exploring the concept of investing in Transform International but we haven’t met them.
How do they know we’re not snake oil salesmen? How do we know they aren’t going to push their financial weight around and mess up our tiny (but mighty) nonprofit?
In addition to not meeting, we have a few other strikes against us on the ‘trust’ thing.
First, research indicates that both trust and trustworthiness rises when people are close socially (Glaeser, Laibson, Scheinkman, & Soutter, 2000, p. 811). In our case the social venture investors are not part of our, the nonprofit managers, social network, nor are they socially close to the individuals leading the 9 local centres around the world. – Strike one.
The same research says that “trustworthiness declines when partners are of different race or nationalities”. Considering we at Transform International represent 3 nations at the core administrating level, and 9 country centres – 6 African, and one each in the Philippines, Papua New Guinea, and Bolivia – and scores of other nationalities representing the volunteer experts contributing to the Transform International network of shareable knowledge? This complexity of nationalities could scare off even the heartiest of investors. – Strike two.
It would seem we are facing a serious uphill battle on building trust.
On the plus side though, we have an incredibly intelligent and personable intermediary to help us with the trust-building process. She not only understands business, but also has a solid and experienced grasp of the key issues and complexities of development and poverty reduction.
The critical role of this person cannot be overstated.
In lieu of getting to know the investor, she is helping Transform International navigate unfamiliar terrain. Having emailed, spoken over video Skype, and met in person, we trust her as a person; and we trust her to represent our interests fairly and with great competence. Every snippet of information that she shares about the investors helps to illuminate our path. Every detail we share helps her to shape the collaborative process together with the investors.
In terms of trust building, it was so important to meet with this intermediary in person. Four Transform International people spent the afternoon with her discussing the various possibilities for collaboration and investment. We shared a dinner together with her and her husband; also at dinner was the person that brought our organization to her attention in the first place.
Breaking bread together, laughing over wild tales of travel adventures, and getting to know each other as people is an under-rated business activity. Through this visit I learned that I could trust this woman, and that I would trust her to take us to the next level of conversation with the investors. Without trust we would not move forward.
And we are moving forward.
Reference: Glaeser, Edward L., David I. Laibson, Jose A. Scheinkman, and Christine L. Soutter. “Measuring Trust.” The Quarterly Journal of Economics 115, no. 3 (August 1, 2000): 811–46.