Help Wanted: Social Arbitrageur, No Experience Necessary.

How’s your title?

Do you want a new one?

Try this one on—Social Arbitrageur.

Sounds cool, doesn’t it? What does it mean? What do I have to do?

Well, let’s start with the concept of social entrepreneur. This is a person who recognizes a social problem and uses entrepreneurial principles to organize and manage a venture to create social change. In other words, they create a sustainable enterprise to remedy a social problem. Perhaps the most famous social entrepreneur is Muhammad Yunus, the 2006 Nobel Peace Prize winner.

Yunus started a micro lending bank that provided capital to poverty stricken communities in Bangladesh. Despite conventional wisdom, Yunus found these borrowers to be good credit risks. His lending allowed micro businesses to be started and created the opportunity for jobs and economic activity. The social entrepreneur attempts to build an enterprise to address social issues. They see opportunity where others see irreconcilable problems.

We don’t all have the ability, vision, time and capacity to build sustainable organizations to address social problems. So what is one to do? Just sit on the sidelines? How about taking on the moniker of Social Arbitrageur?

Arbitrage is a financial transaction where an investor finds a discrepancy in markets for the same or similar goods. If widgets are selling for $2 in the US and $1 in China, the arbitrageur will buy widgets in China and sell them in the US. Actually, the deal takes place instantly and exploits the inefficiency between the two markets. If the price can be secured and there is enough margin for commissions and transaction costs, a profit is guaranteed. The arbitrageur makes money on the transaction, and proceeds to look for another opportunity.

Okay, then what is a Social Arbitrageur? Just like the social entrepreneur applies business acumen to a social problem, a social arbitrageur spots opportunities to address social problems by investing in the lower market price. Huh?

Social entrepreneurs operate a business to remedy a social problem. Social arbitrageurs make individual investments to bridge the gap between two markets. Social arbitrageurs engage in the “give to get” philosophy by transferring value from one market to bridge the gap with another market.

How about an example? Homelessness is a serious social problem in many cities. A social entrepreneur might raise capital and build housing or seek grants and other funding to provide housing for the homeless. A social arbitrageur will focus on a transaction and attempt to help one homeless person find a place to live or provide resources to secure a safe place for a homeless person to live. The social arbitrageur recognizes the difference between homelessness and those with a home. The social arbitrageur invests time or money to remedy the difference.

I did not invent the phrase social arbitrage. That has been coined by others, most notably, Keith Ferrazzi and Tahl Raz in their book, “Never Eat Alone.” Their use of the phrase applies to social networks and leveraging relationships to assist members of one’s network. In a sense this is a horizontal social arbitrage. My application of the concept is about giving to get, bridging two vertically aligned markets. “Giving to get” is a philosophy and practice where one selflessly gives to another with no expectation of return. The social arbitrageur seeks to remedy a social problem by giving of time, money, interest, or encouragement—one transaction at a time.

A social arbitrageur does not have to run an enterprise or build a structure. A social arbitrageur is an independent free agent who gives to bridge a gap between two markets of “human condition.” It does not have to be about money. A social arbitrageur can be attempting to remedy despair, lack of confidence, or lack of appreciation. In those cases a kind word or a selfless act can bridge the gap. A social arbitrageur is not always successful, but they always try. They “give to get.” Their reward comes, but it is unknown at the time of giving and the act is done from a spirit of service, not with an expectation of return.

Here’s the best part. You can be one. There is no fee to join, no degree necessary and no experience required. You just start. Identify a social inequity—a gap between two markets of human condition—then work to remedy it. It will not be perfect every time, but if you try you may well succeed. You might also convince others to become social arbitrageurs and your efforts expand. But first you have to start.

So, the next time someone asks you what you do, just reply “I’m a social arbitrageur.” They will be stunned and impressed. Then, of course, you have to live up to it. You’ll be glad you did. Just remember to “give to get.”