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• Identifying the Next Steps for Impact Investing

  Jocelyn Ling 1:01 pm on January 28, 2012 | 2 comments Permalink | Reply
  Tags: impact, impact investing (10), social enterprise (2)

  A report by Credit Suisse and the Schwab Foun­da­tion for Social Entre­pre­neur­ship was released this week on the topic of impact invest­ing at the World Eco­nomic Forum’s annual meet­ing (Davos). A great overview of the cur­rent land­scape, it is worth a read, par­tic­u­larly Mark Kramer’s and Sir Richard Bran­son’s inter­views and com­ments on the sector.

  Investing_for_impact Credit Suisse — Schwab Report

  The report lead me down an inter­est­ing thought path on the “next steps” of the sector…

  Evi­dence:  The report high­lights sev­eral suc­cess­ful social enter­prise mod­els that are part of Schwab’s net­work. My per­sonal favourite was Bam Aquino of Hapinoy in the Philip­pines — invest­ment funds that cre­ates sus­tain­able dis­tri­b­u­tion chan­nels and busi­ness devel­op­ment strate­gies to empower for­merly iso­lated and infor­mal sec­tors of the Fil­ipino econ­omy. The report above, com­ple­ments the Data Dri­ven JP Morgan-GIIN report, that drills drown into the num­bers and break­down of social enter­prise in dif­fer­ent sectors.

  As a next step, I would love to see a report that focusses more on the acces­si­bil­ity and avail­abil­ity of invest­ments in the space — from an investors per­spec­tive. Com­ing from an asset-management back­ground, I have devel­oped a strong belief that under­stand­ing the invest­ment is just as impor­tant as know­ing your invest­ment options. Cur­rently, main-stream investor’s expo­sure of ‘social’ in invest­ments are SRI offer­ings — they need to be edu­cated on dif­fer­ent entry points and impact invest­ing prod­uct offer­ings rang­ing from an insti­tu­tional and pri­vate client per­spec­tive. A great start­ing point to this step is Impact Asset’s 50: A list­ing of Impact Fund Man­agers.

  Fail­ure: With the indus­try in a growth stage, as great as it is to know the suc­cesses and the land­scape, it is just as impor­tant to know the fail­ures. Where did we go wrong? What worked? How did you man­age to pivot? How do you pri­or­i­tize your mis­sion and your finances? When did you know the time to scale? There is such a stigma with fail­ure in the non-profit/charity world. This stigma should NOT be car­ried for­ward into the impact investing/social enter­prise sec­tor. Fail­ure is a gift — and the abil­ity to speak freely to learn from them, should be embraced by this sec­tor. A won­der­ful exam­ple of embrac­ing fail­ure is the EWB Canada’s Fail­ure Reports. I would love to see a sim­i­lar ini­tia­tive in the impact invest­ing sec­tor. Even inter­nally within orga­ni­za­tions — as a start.

  Road-Map: There is a wealth of infor­ma­tion on impact invest­ing that has been churned up within the last few years or so. The issue is know­ing where to look: from fund­ing social enter­prises to exit­ing an invest­ment. A nat­ural next step to this would be for var­i­ous stake­hold­ers to share their “how-tos” and points of con­sid­er­a­tion in the impact sec­tor. Some orga­ni­za­tions have already begun to pave the way for this, but what we need is for more road-maps to appear so at the very least, when you’re at the start­ing line — you have a gen­eral sense of direc­tion on where to go.

   

   

• Invest2Innovate: Addressing the Disconnect in the Social Enterprise Space

  Jocelyn Ling 1:06 pm on November 26, 2011 | 0 comments Permalink | Reply
  Tags: BottomOfPyramid (4), empowerment (7), impact, social enterprise (2), social finance (7)

  *The post below was orig­i­nally pub­lished on http://www.socialearth.org on Nov 25, 2011

  
  In the social enter­prise world, one key issue that con­stantly resur­faces, as it would in any grow­ing sec­tor, is one of fund­ing and iden­ti­fy­ing a proper invest­ment pipeline. The acces­si­bil­ity and  avail­abil­ity of start-up fund­ing is cru­cial to star­tups, and in the case of social enter­prises, a largely untapped mar­ket. Here’s whereInvest2Innovate (i2i) comes into the pic­ture. They are a social enter­prise inter­me­di­ary that sup­ports the growth of social entre­pre­neur­ship in new mar­kets, help­ing fun­ders and early stage entre­pre­neurs see eye to eye.

  I had the oppor­tu­nity to con­nect with Kalsoom Lakhani the founder and CEO of i2i to inter­view her about her recently launched social enter­prise. A trail­blazer and native to Pak­istan, Lakhani launched i2i’s pilot in Pak­istan in Sep­tem­ber 2011 with plans to expand oper­a­tions to other coun­tries post 2012. Here’s what she has to say about her startup and the space:

  1) What is most inter­est­ing to you right now in the social enter­prise space? 
  There are many inter­est­ing inno­va­tions tak­ing place right now – from ground­break­ing SMS crowd-mapping tools to agriculture-based inno­va­tions for small farm­ers. Inno­v­a­tive tools & approaches of engag­ing and empow­er­ing low-income com­mu­ni­ties are com­ing up con­stantly. But I’m also extremely inter­ested in the growth of the impact invest­ment space, and where we are right now in terms of the com­mu­nity as an emerg­ing asset class, whether or not this type of invest­ment breeds bet­ter social impact met­rics, and whether the cap­i­tal is flow­ing to the right places. There are still a lot of spaces we need to fill when it comes to con­nect­ing cap­i­tal to social enter­prises, par­tic­u­larly at the early-stage, and it’s inter­est­ing to see how crowd-funding and other inno­v­a­tive ways of rais­ing cap­i­tal are becom­ing poten­tial solu­tions to help fill that gap.

  2) Why start up i2i? Why is this the time to enter into the mar­ket? 
  i2i was launched in order to help address some of the dis­con­nects in the social entre­pre­neur­ship space. Prior to launch­ing the com­pany, I worked in ven­ture phil­an­thropy for over three years, pro­vid­ing seed fund­ing and sup­port to early-stage social enter­prises mainly in Pak­istan. I was first exposed to the “space” then, and quickly immersed myself in all things social entre­pre­neur­ship & inno­va­tion. It has been fas­ci­nat­ing and moti­vat­ing to see grow­ing ecosys­tems in mar­kets like India, Latin Amer­ica (Mex­ico, Brazil, Chile are good exam­ples), and East Africa. Beyond higher access to cap­i­tal (a lot of impact investors oper­ate in these coun­tries), we’ve seen the growth of other play­ers that fur­ther sup­port social enter­prise – incu­ba­tors, accel­er­a­tors, gov­ern­ment poli­cies (in some cases), inter­me­di­aries, etc.

  

  i2i was founded to take a sim­i­lar ecosys­tem approach in the “untapped” mar­kets – that’s a lot of jar­gon I know, but essen­tially we pro­vide tai­lored ser­vices to early-stage social enter­prises to grow their busi­nesses and con­nect them to cap­i­tal. Pak­istan, our pilot mar­ket, is a great exam­ple of a coun­try where there is a sig­nif­i­cant need for more inno­v­a­tive and market-based approaches to devel­op­ment – 66% of the pop­u­la­tion live on under $2 a day – but where the envi­ron­ment for social entre­pre­neur­ship is rel­a­tively new. Entre­pre­neurs often lack the tools & ser­vices to max­i­mize the poten­tial of their mod­els and attract cap­i­tal, espe­cially in mar­kets like Pak­istan, where the volatile polit­i­cal and secu­rity sit­u­a­tion hurt the investor envi­ron­ment. There is a lot oppor­tu­nity for i2i, as an inter­me­di­ary, along with other part­ner orga­ni­za­tions, to be the archi­tects of the ecosys­tem, fos­ter­ing the social entre­pre­neur­ship space both from the top-down and the bottom-up.

  3) What is the biggest mis­con­cep­tion you see in the world of social enter­prise and where do you stand on the issue? 
  I think the biggest mis­con­cep­tion in social enter­prise is that it’s ok to stop at the “warm & fuzzy” and throw the term around irre­spon­si­bly. It dri­ves me crazy. Social enter­prise ulti­mately com­bines the best of the busi­ness and the char­ity world – it begs the ques­tion, “Could we mag­nify social impact if we take a busi­ness approach to devel­op­ment?” Social entre­pre­neur­ship is not the solu­tion to every­thing, but in some cases, it can be really effec­tive. For instance, if rural low-income com­mu­ni­ties that are off the elec­tric­ity grid use kerosene as their light and heat source, not only is it a costly prod­uct, but it poses ter­ri­ble health and envi­ron­men­tal ram­i­fi­ca­tions. Dis­plac­ing this demand for kerosene with clean energy solu­tions pro­vides these low-income com­mu­ni­ties with bet­ter alter­na­tives at com­pa­ra­ble prices, ulti­mately con­tribut­ing to poverty alle­vi­a­tion. Social enter­prises need to demon­strate social and/or envi­ron­men­tal impact – that is what tends to qual­ify the “social” in the equa­tion, but at the end of the day, they are busi­nesses that need to have strong mod­els and be sus­tain­able in the long-term. Some­times that gets lost in the “warm & fuzzy” sto­ries we hear in the space, which are great in com­mu­ni­cat­ing an organization’s vision and build­ing a com­mu­nity of sup­port­ers, but there needs to be sub­stance behind that story.

  4) What is one action would like peo­ple to take once they know if i2i? 
  If you are a social enter­prise, espe­cially in Pak­istan (since that is our pilot), get in touch with us to get an assess­ment of your busi­ness and how i2i can pro­vide ser­vices (from busi­ness devel­op­ment to communications/marketing) to help your orga­ni­za­tion grow. If you are a poten­tial investor (both for i2i and/or inter­ested in early-stage enter­prises in new mar­kets), we’d love to talk to you! And finally, if you are just a sup­porter, we are always excited to hear your feed­back and make our model better.

  ***

  Kalsoom is a the founder of invest2innovate based in Wash­ing­ton, D.C. She is a co-ambassador for Sand­box, a global net­work of inno­va­tors under 30, and is also a mem­ber of the World Eco­nomic Forum’s Global Shapers.  She has writ­ten for the Wash­ing­ton Post, the Huff­in­g­ton Post, Foreign Pol­icy, and Pakistan’s Dawn Newspaper. Get in touch: klakhani@invest2innovate.com.
   

• VANCOUVER+acumen Presentation - Making an Impact through Social Finance

  Jocelyn Ling 3:54 pm on November 8, 2011 | 0 comments Permalink | Reply
  Tags: impact, impact investing (10), social finance (7), sustainable (5)

  For the past year and a half or so, I have been involved with an incred­i­ble group, VANCOUVER+acumen. We’re a vol­un­teer chap­ter sup­port­ing Acu­men Fund by actively cham­pi­oning Acumen’s inno­v­a­tive model of patient cap­i­tal to ele­vate global poverty. We achieve this by engag­ing in com­mu­nity, rang­ing from infor­ma­tional work­shops, monthly salons and our annual case com­pe­ti­tion. As one of the found­ing mem­bers, it has been a great priv­i­lege to work along­side such pas­sion­ate indi­vid­u­als in this space and to con­tinue to cre­ate a world beyond poverty.

  

  I’m really excited to announce that I will be speak­ing at the inau­gural Cana­dian Global Impact Invest­ing meetup in Van­cou­ver on behalf of the group — shar­ing the acu­men model (both on a global and chap­ter level) to the impact invest­ing com­mu­nity in Van­cou­ver. The event will be held on Wednes­day, Nov 23rd from 6:30pm — 9pm at SFU Segal Grad­u­ate School of Busi­ness in down­town Van­cou­ver. You can check out more details about the event here.

  Three other orga­ni­za­tions will also be pre­sent­ing at the event: Vancity, Global Cat­a­lyst Ini­tia­tive and Oppor­tu­nity Inter­na­tional Canada. Also, at the event, they will be giv­ing away door prizes ( 2 books I couldn’t rec­om­mend highly enough): Impact invest­ing: Trans­form­ing How We make Money While Mak­ing a Dif­fer­ence – Jed Emer­son, Antony Bugg-Levine and Banker to the Poor – Muham­mad Yunus.

  See you on the 23rd. Look­ing for­ward to con­nect­ing with other fel­low impact investing/social enter­prise champions.

   

• Catalyzing Social Capital Markets: 4 key publications

  Jocelyn Ling 3:27 pm on October 13, 2011 | 0 comments Permalink | Reply
  Tags: impact, impact investing (10), sustainable (5)

  I’m not sure if I suf­fer(?) a bad case of Con­fir­ma­tion Bias but it seems (and this is a broad gen­er­al­iza­tion of course!) that there has been a rise in news, webi­nars, events or arti­cles about impact invest­ing and/or social enterprise. I wrote the post below for SocialEarth two days ago and it already needs updat­ing! From the amount of responses and retweets, peo­ple really love resource/reading lists! Hence, I will start shar­ing resources that I come across here instead of blast­ing out via email to my friends (I’m under a delu­sion that they love receiv­ing news like this — no one has opted out so far!).

  So 2 quick updates. Upcom­ing (free!) webi­nars on impact investing.

  1) How to Be An Impact Investor hosted by MaRS Cen­tre for Impact Investing

  Date: Thurs, Oct 27th 2011

  Time: 12pm — 1pm (EST)

  Key themes/questions (from event description):

  • How do you con­vert your moti­va­tions for a just and equi­table soci­ety or a pollution-free envi­ron­ment into an effec­tive invest­ment pol­icy state­ment that will enable you to make both pos­i­tive impact and seek the finan­cial return require­ments of your organization?
  • What level of due dili­gence should you con­duct to deter­mine whether a ven­ture is a good can­di­date for such investments?
  • What skills and exper­tise can you draw on inter­nally or acquire through exter­nal advi­sors or man­agers to aid in your decision-making process?
  • What oppor­tu­ni­ties and chal­lenges should you be cog­nizant of as you seek to re-align your invest­ment port­fo­lio with your mis­sion and val­ues, both orga­ni­za­tion­ally and personally?

  2) Impact Invest­ing: Chal­lenges and Prospects hosted by Jed Emer­son and Antony Bugg-Levine

  Date: Mon, Nov 7th 2011

  Time: 12pm –1pm (EST)

  Key themes/questions (from event description):

  • Roots of impact invest­ing, exam­ples of its prac­tice today
  • Chal­lenges that need to be addressed: reg­u­la­tions, cul­ti­vat­ing trans­for­ma­tional lead­ers, mea­sur­ing blended value, bring­ing in phil­an­thropic cap­i­tal, lim­its and chal­lenges of impact investing
  • Chart­ing a course for ‘blended value’ invest­ment strate­gies that make money while improv­ing social and envi­ron­men­tal conditions.

   

  *The post below was orig­i­nally pub­lished on http://www.socialearth.org on Oct 11, 2011

  Cap­i­tal­ism has alot to answer for these days. Mem­bers of this group range from ardent Occupy Wall Street pro­test­ers to a sense of com­mon vision that seems lack­ing amongst cit­i­zens. Today, we turn to four won­der­ful pub­li­ca­tions high­lighted at  SOCAP11  that has been cre­at­ing momen­tum to rede­fine cap­i­tal­ism and would be a sig­nif­i­cant con­tri­bu­tion to the pub­lic debate.

  1) Impact Invest­ing: Trans­form­ing How We Make Money While Mak­ing A Dif­fer­ence – Jed Emer­son, Antony Bugg-Levine

  This ground-breaking book should be your first choice to pick up to explore the trans­for­ma­tive power of impact invest­ing. The book explores an inte­grated alter­na­tive to tra­di­tional phil­an­thropy and invest­ing – high­light­ing the appli­ca­tions of impact invest­ing as well as its poten­tial. It demon­strates how it is and can be a pos­i­tive dis­rup­tive force. Per­haps the most inter­est­ing angle of this book is the usage of time with impact invest­ing, pro­vid­ing a his­tor­i­cal and pre­dic­tive per­spec­tive enabling read­ers to have a solid under­stand­ing of what the present holds. The authors ulti­mately offer a opti­mistic vision for what we can col­lec­tively achieve when our assets work in uni­son with our val­ues. As a bonus, I can assure you that the authors are as inspir­ing in per­son as they are in the book. No jokes.

  Fur­ther Resources:

  • My inter­view with one of the authors, Antony Bugg-Levine
  • The HIP Investor: Mak­ing Big­ger Prof­its by Build­ing a Bet­ter World

   

  2) Inno­va­tions Jour­nal: SOCAP 11 – Impact Invest­ing Spe­cial Edition

  I’ve been a big fan of Inno­va­tions – quar­terly com­pi­la­tions of com­men­tary, research and essays from lead­ing inno­va­tors in their field. There was a spe­cial edi­tion of Inno­va­tions for SOCAP11 con­tain­ing a myr­iad of per­spec­tives on build­ing the inter­sec­tion on money and mean­ing as part of the solu­tion to global chal­lenges. Below is the com­plete list of con­trib­u­tors in this spe­cial edition.

  

  My pick out of all the essays was one by Robert Katz and Brian Trel­stad of Acu­men Fund on Mis­sion, Mar­gin and Man­date. The essay firstly unwraps the def­i­n­i­tion of scale and sus­tain­abil­ity and then lays out the three paths to achieve this goal through mis­sion, mar­gin and man­date. I was par­tic­u­larly hooked on the dilemma pre­sented: what should take prece­dence when build­ing out a social enterprise?

  • “At what point do you evan­ge­lize your solu­tion to raise mission-based grant cap­i­tal or vol­un­teer sup­port to work on that new product?
  • At what point to you buckle down and sim­ply exe­cute on sales and ser­vice to grow your margins?
  • When do you approach the gov­ern­ment for changes to pol­icy that might help get that man­date to scale?”

  Fur­ther Resources:

  • You can obtain a free copy of their essay here
  • Bonus offer: Write an Ama­zon review for the SOCAP11 Impact Invest­ing Spe­cial Edi­tion and receive a free sub­scrip­tion to the Inno­va­tions Journal.

   

  3) Design for the Other 90% – Cyn­thia Smith, Paul Polok

  “It is a dis­ci­pline that uses the designer’s sen­si­bil­ity and meth­ods to match people’s needs with what is tech­no­log­i­cally fea­si­ble and what a viable busi­ness strat­egy can con­vert into cus­tomer value and mar­ket oppor­tu­nity”. Tim Brown, Change By Design

  This book is an extra­or­di­nary col­lec­tion of more than 30 design projects tar­geted specif­i­cally to design low-cost solu­tions for the world’s pop­u­la­tion that have lit­tle or no access to most prod­ucts (the other 90%). The sto­ries and bril­liant illus­tra­tions (part­nered with the Smithsonian’s Cooper Hewitt, National Design Museum) takes the reader through unique ways to pro­vide bet­ter access to basic needs and how inno­va­tions in design are often the most suc­cess­full in address­ing these issues.

   

  Fur­ther Resources:

  • IDEO’s Human Cen­tered Design Toolkit
  • Sup­port: IDEO’s mis­sion to design an end to poverty

   

  4) A New Foun­da­tion for Port­fo­lio Man­age­ment - Port­fo­lio 21, RSF Social Finance

  One of the fun­da­men­tal con­cepts that per­me­ates port­fo­lio con­struc­tion and the asset man­age­ment world is Mod­ern Port­fo­lio The­ory (MPT) – how do you max­i­mize port­fo­lio expected return for a given amount of risk by choos­ing var­i­ous pro­por­tions of assets. This paper is a great start­ing point in a call to arms to reeval­u­ate MPT in light of the impact of eco­log­i­cal lim­its and global impact of invest­ments. The premise of the paper focuses on: 1) Inte­grated Risk; 2) Selec­tive Growth; and 3) Mul­ti­di­men­sional Util­ity Func­tion to pro­vide investors clar­ity on the long-term impli­ca­tions of man­ag­ing a port­fo­lio that goes beyond a purely finan­cial purpose.

  Fur­ther Resources:

  • Port­fo­lios of the Poor: How the poor live on $2 a day  - Daryl Collins, Jonathan Mor­duch, Stu­art Ruther­ford, Orlanda Ruthven