Social Investment Manual

A Guide for Social Entrepreneurs

Developed by Social Investment Task Force
consisting of

Technical University Munich

Schwab Foundation Community of Social Entrepreneurs* led by Andreas Heinecke

Schwab Foundation for Social Entrepreneurship

Ann-Kristin Achleitner Wolfgang Spiess-Knafl

Mirjam Schöning Abigail Noble

WORKING DOCUMENT

18 May 2011 * Please see page 50 for an overview of the task force members of the Schwab Community which contributed to the development of this document. We look forward to your comments or suggestions. Please contact wolfgang.spiess-knafl@wi.tum.de and abigail.noble@schwabfound.org We would like to thank Miriam Al-Ali, Andrea Coleman, Gene Falk, Pradeep Jethi, Victoria Kisyombe, Lisa Müller, Reed Paget, Amitabha Sadangi, Sarah Volk, Heinrich Weninger, Arthur Wood (in alphabetic order) and all participants of the workshop on “Social Investment” organized by the Schwab Foundation for their contributions and their willingness to discuss some of the key issues.

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Table of Contents
Foreword 1 2 3 Introduction Social Investment Landscape The Financing Process 3.1 3.2 3.3 3.4 3.5 3.6 3.7 3.8 4 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 5 6 7 Index Sources Available Financing Instruments Finding the Right Investor Approaching the Social Investor Screening and Due Diligence Process Negotiating the Financing Terms Working with Investors Performance Measurement Exit Consideration Social Capital Markets Internal and External Financing Financing Instruments Reporting Template Investment Template Social Investors with General Investment Focus Social Investors with Focus on Microfinance Value Banks Social Investment Advisory Funding Consultancies Social Stock Exchanges 3 5 6 7 7 9 10 11 13 15 16 18 19 19 21 22 24 25 27 37 40 46 48 49 50 52 53

Appendix

Task Force Members

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Foreword
The basis for this manual was laid at a social entrepreneurs gathering during the World Economic Forum’s Annual Meeting of New Champions in Tianjin (China) in September 2010. Thirty social entrepreneurs in the Schwab Foundation community came together from all continents to share their current challenges and deliberate how these challenges could be addressed by pooling their shared experiences and leveraging the Foundation’s networks. Subsequently, several task forces were formed to address these common challenges. The task force on social investment quickly caught the interest of further members within the Schwab Foundation community, which comprises 200 of the world’s most advanced social entrepreneurs. The Schwab Foundation recognizes that social enterprises span the spectrum of grant based to financially self-sustainable to profitable. The social enterprises in the Schwab community are classified by one of three business models (leveraged non-profits, hybrid non-profits and social businesses). The majority of Schwab social entrepreneurs (70%) either has a hybrid or a social business model and could therefore benefit from different debt and equity structures to expand their impact. Most of the entrepreneurs participating in the social investment task force had collected experience with social investors. They have gone through long negotiations and learning processes to access debt or equity capital for their organizations. While networks like the Global Impact Investing Network (GIIN), the Aspen Network of Development Entrepreneurs (ANDE) and the European Venture Philanthropy Association (EVPA) provide opportunities for the social investors to exchange experiences, few, if any investees had exchanged notes with fellow social entrepreneurs. The task force therefore set out to assist fellow social entrepreneurs on the path into the social investment space with this manual. The decision to engage with social investors, as is any decision by the founders to share responsibility and ownership of their daily operations and results of their organization with external stakeholders, is one that must be well researched and the implications carefully considered. We hope that this manual provides the basic toolkit for social entrepreneurs to begin these conversations, not only with prospective investors, but also with themselves. Social investment can offer entrepreneurs the chance to scale up and out their impact exponentially, but it can also lead to unintended consequences, such as a change in strategic direction, a divergence from the original values and mission, or a loss of control over the organizational culture and direct engagement with the community it is serving. Given this, the need for a manual is ever more important for social entrepreneurs. It is our hope that the Schwab Community of Social Entrepreneurs will embrace both the challenges and opportunities represented by the social investment space, and will use as a launching point this guide and the work of this taskforce. With this, we can deepen our understanding and widen our use of the practices and metrics of social investment. Given the rapid evolution of this field, the task force welcomes continuous feedback and insights from entrepreneurs to incorporate in the guidebook.

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We would like to recognize and thank Andreas Heinecke for driving the task force on social investment as well as the members of the task force. We would like to thank Prof. AnnKristin Achleitner and Wolfgang Spiess-Knafl at the Technical University Munich for their invaluable support in putting this manual together.

Mirjam Schöning Head Schwab Foundation for Social Entrepreneurship

Abigail Noble Regional Head for Latin America and Africa Schwab Foundation for Social Entrepreneurship

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to help shorten times to assess expectations and prepare a mutually relevant frame. Two completely different worlds collide — one where planning and structure is all-important and one where there is apparently a lack of management expertise. as this form of financing is often called. The goal of this manual is to alleviate an additional challenge on the hands of the social entrepreneurs. Second. vague and uncertain planning perspectives. nor is it an abstract idea. better understanding of the social investment space is needed on both ends. First. The duration of expression of interest until the conclusion of an investment agreement is inordinately long. and investors in this sector often lack on-ground knowledge. philanthropic donations were the major. Paradoxically. that of having a mutually compatible approach for social entrepreneurs and social investors. sometimes running in years. 5 . if not the only source of funds for a growing social enterprise. The best of intentions on both sides cannot prevent deals from failing. Social entrepreneurs complain that there is little understanding of the definition of “social impact” and there is often financial over-engineering. funding sources that can ensure not only the financial sustainability but also the growth in impact of social enterprises have deepened and widened. it is not a simple market inefficiency or matching problem that must be solved. Most often this is because the skills and expertise required to achieve the objective are not understood. The authors of this manual believe the problem is one of information and understanding. This manual strives to address this challenge. However. investors seeking to make both a financial and social return often feel the options are limited. Social investments present a business practical approach to investing in organizations and projects that brings about change in areas that may not be considered “commercially” attractive.1 Introduction Traditionally. This document is by no means a scientific treatise on social investment. Social entrepreneurs have already sought out to address the most pressing problems facing societies today. Social Investment. and often. As the field of social enterprise has gained credibility and therefore scale. rigorous and mutually agreed upon metrics that will facilitate the social investment transactions and deal flow are imperative. a lack of regular cash flow. while successful social entrepreneurs with proven track records face a chronic lack of capital. to help them engage better with those who deal with social investment support. represents a real alternative to government subsidies or donations. It is written from the perspective of social entrepreneurs.

The institutions in the social sector and their equivalent in the traditional capital markets are shown in the following figure. In addition to the financing institutions. source mature social enterprises with a proven business model and significant capital needs while venture philanthropy funds provide capital for younger and innovative enterprises. there are also institutions whic advise social which enterprises and funders how to structure an investment. Value banks provide loans to social enterprises with a low risk profile to minimize the default rate as they have to secure the deposits of its savers. The institutions known in the traditional capital markets have been transferred to the social sector to reduce the transaction costs and to help allocate capital more efficiently. Please see appendix on page 19 for an see overview. Social stock exchanges could be an attractive funding sourc for . 6 .2 Social Investment Landscape Over the last years there have been increased efforts to facilitate the financ financing for social enterprises and to overcome the challenges of the traditional philanthropy model based on donations. Figure 1 Social Capital Markets Source: Achleitner & Spiess-Knafl (in press) Knafl Each institution focuses on a specific segment of the social sector.

7 . would you be able to take on capital that requires annual interest or dividend payments (e. social entrepreneurs have to ask the following questions also shown in the f figure below: Would you be able to set aside capital that would allow you to repay any financing you might receive after a couple of years? In thinking about ways that your organization might grow.3 The Financing Process The complete financing process includes the following steps: ing Finding the appropriate financing instrument Finding the right social investor Approaching the social investor Screening and due diligence p process Negotiating the financing t terms Working with the investor including performance measurement Exit of the investment Before approaching a social investor the social entrepreneur should consider first which financing instruments are suitable and which social investor supports his strategy and social mission. Those financing instruments are described in the following table as well as in more detail in chapter 4. 5% interest)? s interest) Classification of available financing instruments Figure 2 Illustration based on Achleitner Spiess-Knafl & Volk (2011) Achleitner.3. 3. When determining the right financing instrument.g.1 Available Financing Instruments ble The first step in finding the right financing structure is the choice of the right financing instrument.

Usually restricted use for predefined projects .Low entrepreneurial flexibility Annual interest payments require predictable cash flows No dilution of ownership Far-reaching rights of capital providers in case of default High entrepreneurial flexibility in the use of capital Dilution of ownership Social investor receives control and voting rights Profit participation for social investor Potential impact on corporate culture Annual interest payment require predictable cash flows No dilution of ownership Mandatory repayment Profit participation for social investor Inexpensive financing instrument No dilution of ownership Risk sharing with the social investor Great structuring flexibility Grants Annual Payments: None Repayment: Duration: None Long term (3-7 years) Debt Capital Annual Payments: Interest payments (variable) Repayment: Duration: Yes Unlimited Equity Capital Annual Payments: Dividend payments (variable) Repayment: Duration: No Long term (3-7 years) Mezzanine Capital Annual Payments: Interest payments (variable) Repayment: Duration: Yes Long term (3-7 years) Hybrid Capital Annual Payments: None Repayment: Depends upon structure Table 1: Comparison of Financing Instruments Source: Own illustration 8 .Financing Instrument Term Sheet Duration: Short term Implications for Social Enterprise .High fundraising costs .

000 social investors can syndicate the investment (simultaneous investment of two or more investors).2 Finding the Right Inv Investor The second key element in determing the right financing mix is the financing source. The geographic focus and the sector focus are therefore usually hard criteria. In the case of significant capital needs exceeding a limit of ~$1. Figure 3 Investment fit Source: Own illustration Most social investors concentrate their funding to gain experience and to transfer knowledge between the social enterprises. The first meeting with the social investor or a discussion with other investees are good ways to answer this question. The different investment stages are: Seed Early Stage / Start-Up Later Stage / Mature A social investor might only finance a proven business model while others finan individuals finance with a promising concept for a social enterprise. The questions to ask in finding the right investor are shown in the following figure. 9 . the financing terms and the investment stage do offer room for negotiation. For this reason a social investor might only invest in youth projects in Western Europe. However.000. This “proof of concept” is usually not oncept negotiable. The social entrepreneur also has to consider if the social investor shares the same values and has a similar mission.3.

10 . those funds have low contact barriers and offer information on their website how to contact the fund managers. 1 Also see page 45 for a list of social investment advisors.How is the product or service relevant to impacting the lives of the base of the pyramid? . the dialogue with investees of the social investor or the dialogue with social investment advisors which do have a good overview of the activities of the different social investors.1 In the appendix on page 25 there is an investment template on how to prepare the relevant information. This template structures the relevant information and reduces the time spent for further inquiries.Tell us about your team. How has your venture uniquely addressed these issues? What is unique about your approach to the challenges of serving the poor with your product or service? Another more personal possibility is the visit of social investment conferences. How are you uniquely qualified and positioned to take on this endeavor? .Sector .Many well-intentioned ideas to help the poor are not sustainable and do not appropriately address market barriers to success. mission.Size .What is the primary product or service you provide? .Stage If the social entrepreneur meets these criteria he is asked to send his business plan to businessplans@acumenfund.3. On this page Acumen Fund describes the formal criteria such as: .Geography .Tell us about your experience and knowledge working with the market that you'd like to serve. What have your experiences been in testing your product in the target market and how has this positioned you to grow from here? . Box 01 Acumen Fund has a link on its website “Business Plan Submission” with all relevant information.3 Approaching the Social Investor Social investors are usually interested in screening and analyzing as many social investment opportunities as possible. and goals. Therefore.org addressing the following topics: .

According to Heister (2010) they can be grouped in the following categories: Concept Market Financials Social Impact Social Entrepreneur “Concept” accounts for a large part of the discussions in the investment committees and is the single most important selection criterion. stakeholder support or innovation. Basically. Within the criterion “Market” venture philanthropy funds discuss the competition and peers of the social enterprise and certain characteristics of the target group. fund managers discuss around 50 different selection criteria. Investors want to understand whether the product or service provided will change the relevant sector and help the target group. empowerment strategies. creativity. Fund managers analyze the business model as well as capital requirements. 11 . The selection criterion “Financials” is highly relevant for funds which do expect interest payments and a repayment after a few years. fund managers want to understand the potential market size to better evaluate growth strategies. professional skills. Fund managers regularly discuss different aspects within the group “Social Entrepreneur”. The factors can be generally divided into five groups which are strategic skills. Within this selection process. they want to understand how and how much income will be generated during the holding period.4 Screening and Due Diligence Process Social investors usually analyze a few hundred social enterprises per year and use a multistage selection process. Relevant questions could include aspects such as access to the target group. creativity and biography. Within the selection criterion “Social Impact” fund managers analyze the scalability and reach of the business model. The most discussed criteria are dedication. attitude and development potential.3. Reach is the percentage of the market reached with the concept whereas scalability refers to certain characteristics of the business model such as the necessary know-how for service provision and the dependence upon certain stakeholders which could influence the scaling of the social enterprise. Additionally. A sample of questions to prepare is shown in the following box.

g. 18. 15. 20. experience and contacts of the founder? What were the motives of the foundation? Is the founder resilient? Has the founder good communication skills? Has the founder already gained entrepreneurial experience? Is the founder able to delegate duties? Is the founder creative in solving problems? 12 . 16. Is it a new concept? Are there existing or competing offers for the target group? What is the difference to the other concepts and offers? Does the organization have a clear strategy to solve the social problem? Can the target group be defined and does it have an incentive to accept the offer? Does the concept focuses on the strengths of the target group (e. 17.Box 02 For the due diligence process social entrepreneurs should prepare the following 20 questions: 1. 3. 10. 7. 14. 5. 8. parents. 11. 19. 13. special abilities of autists)? Does the concept integrate the target group in the process of the service provision? Are other stakeholders integrated in the concept (e. 9. 2. 12.g. teachers or neighbors)? Does the concept use externals and multipliers for the service provision? Can the target group easily access the offer (low-threshold offer)? Does the concept aim to change the system? Can the concept be copied and scaled easily? What is the potential reach of the concept? Is the offer dependent on the skills. 4. 6.

the social investor and the social entrepreneur start the negotiations of the financing terms. 2 In one example the social investor has taken up 10% of the social enterprise at nominal value and also provided a loan. about 7% in Western Europe) and depends upon the financial return expectations of the social investor. The financial return can be realized through an increase of the value of the social enterprise as well as through dividend payments. $250. the social entrepreneur has to address the question of control and voting rights. Debt capital (loan) A loan is attractive if the social enterprise has access to stable and predictable cash flows. In case of nominal values the repayment should also be based on nominal values.3. the social entrepreneur also needs to repay the loan.5 Negotiating the Financing Terms If the due diligence is finished positively. Equity capital An equity investment gives the social investor a share of the company and the future profits.000 after setting up a second location). In some cases the social investor provides the financing in separate tranches after the reach of certain milestones (e. The investor should be able to influence decisions in the company but the social entrepreneur should be careful in giving too extensive rights to the social investors. The financing terms include: Interest rate Repayment schedule Financial flexibility Default scenarios The interest rate is the annual payment of the social entrepreneur to the social investor. Considerations regarding the exit are discussed in more detail on page 18. Besides interest payments. The final question is how the social investor can exit the investment after a few years.g. The interest rate ranges from 0% (interest-free loan) to market rate returns (e. Another option is the complete refinancing at the end of the loan period. The financing terms differ between debt capital (loan) and equity capital. In such cases it is important that the social entrepreneur can buy back the 10% of the equity at nominal value. In a popular model the social entrepreneur starts to repay the loan (the principal) after two years.g. 13 .000 at the start and $250. An essential point is the question if the transaction is based on nominal or market values.2 Another issue is the question what kind of financial return the social investor can expect. In the case of an equity investment the social entrepreneur has to negotiate the following terms: Valuation of the social enterprise Dividend payments Exit / repayment A social investor would take up between 10-25% of the company and the social entrepreneur has to think about the valuation of the social enterprise. Moreover.

Secure the necessary entrepreneurial flexibility for the operations (voting rights only as far as necessary). The social entrepreneur should avoid any personal liabilities as well as too extensive debt to equity swaps. Box 03 The dos and don’ts of negotiating the financing terms: . 14 . . the loan provider has far-reaching rights. However. In the case of default or bankruptcy.The social enterprise should also negotiate the interest payment and principal repayment schedule in case of distress to secure the necessary financial flexibility. A debt to equity swap gives the loan provider a certain share of the equity capital (ownership) if the social enterprise defaults on its debt. Grace periods could be an attractive option for social enterprises.Consider the consequences in case of default.Avoid any personal liability. . the social entrepreneur also needs to consider the worst-case scenario.

Interestingly.6 Working with Investors After finding the right financing mix and closing the deal.Family firms always install an advisory board (if not existing already) after the investment. social investors have extensive knowledge about corporate governance.g. reporting. controlling. The installation of an advisory board is a practical way to involve the social investor in the operations and to give the social investor voting and control rights.The inter-personal relationship between investor and family firm is the single most selection criterion for the family firm in finding the right investor. Similar to social enterprises. Therefore. profit distribution and future development of the enterprise that the social entrepreneur has to be certain that he wants to have the social investor as partner over the next years even in times of stress. The advisory board can serve as a sparring partner challenging the decisions of the management in a favorable atmosphere and thus increasing the quality of the entrepreneurial decisions and the accountability of the management. Some social enterprises have operations across countries with different funders which all work in different settings. family firms also have multiple goals. .The management particularly appreciates the role of the advisory board as sparring partner. the advisory board was kept in place even after the exit of the investor. . As it is described in Box 04. That means that the social entrepreneur should adjust his expectations and use the existing skill set and network of the social investor. Some of the key findings were: . 15 . However. reporting and corporate finance. controlling and corporate finance but limited knowledge of the core activities of the company such as delivering the social services to the target group.3. a very important element is the inter-personal relationship between investee and investor. . E. The members of the advisory board are usually representatives of the social enterprise. Box 04 Achleitner et al. . (2008) conducted a study on minority investments of private equity funds in family firms. one social enterprise sends a monthly overview of the financial situation to the members of the advisory board which convenes four times every year. the social entrepreneur has to set up a working relationship with the social investor. representatives of the shareholders as well as independent experts which can either contribute expertise from the social or the business sector. a close personal interaction would be a better alternative. There are some constellations where the set-up of an advisory board is not recommendable.The family firms benefit from the investors’ support in corporate governance. In those cases an advisory board on a company level would be difficult to manage due to the complexity of the relationships. There are so many potential conflicts such as social mission.A clear common understanding concerning the profit distribution is necessary to minimize the risk of conflicts of interest.

” Although the impact value chain is a clear concept. A catalog describing the methods to assess the social impact can be found at www. for example. the percent that drop out. there is no yet a performance measurement method which is globally accepted and applicable.pdf. volunteering or money). but it is just as important for that organization to define the desired outcomes and figure out which internal output measures are most likely to be correlated with desired outcomes. Clark et al.riseproject. desired outcomes could include higher self esteem for participants or self-esteem higher educational achievement for participants. Outputs for an after school program. For the after afterschool program. al (2004) and Roder (2010) Input are those ressources which are put directly into the venture (e. (2004) have described outputs and outcomes as follows follows: “The key notion of the Impact Value Chain is to differentiate outputs from The outcomes.3. and the percent that re-enroll the following year.org/ www. enroll Outcomes are the ultimate changes that one is trying to make in the world. Figure 4 Impact Value Chain Illustration based on Clark et. The main questions are shown in the following figure. assets. Those methods do need hose 16 .riseproject.g. Performance measurement methods have similar information requirements as financial erformance analysts assessing the valuation or the credit rating of a company. Commonly the organization running the program may not have the expertise or resources to evaluate whether an outcome has been achieved.Outputs are results that a company. nonprofit or project manager can measure or assess directly. DBL_Methods_Catalog. Social entrepreneurs need to consider their impact value chain first.7 Performance Measurement Performance measurement enables the social investor to control and monitor the work of the social entrepreneur. could include the after-school number of children participating in the program.

Operational impact (indicators that describe the organization’s policies. In the traditional capital markets standards such as the International Financial Reporting Standards (IFRS) or the United States Generally Accepted Accounting Principles (US-GAAP) guarantee that companies are reporting on a comparable basis. and environmental performance) . From the social entrepreneur’s perspective.org/iris-standards) In the appendix on page 24.social-reporting-standard. B Lab and Rockefeller Foundation to create a common framework for defining and reporting the performance of impact capital.Organization description (indicators that focus on the organization’s mission.Financial performance (commonly reported financial indicators) . 17 .de and another standard developed in the United States is described in box 05. to improve the processes and to have a better documentation of the successes of the social enterprise. reporting is associated with additional efforts and costs at the beginning but there are also benefits. there is a reporting template which can be used for the reporting to the social investor. Standards addressing the characteristics of social enterprises have been developed but there is not yet a globally accepted standard.Product description (indicators that describe the organization’s products and services and target markets) .thegiin. Box 05 The Impact Reporting & Investment Standards (IRIS) was founded by Acumen Fund. and location) .Glossary (definitions for common terms that are referenced in the indicators) (taken from http://iris. It allows the social entrepreneur to control the own target achievement. The Social Reporting Standard (SRS) developed in Germany can be seen at www. employees.Product impact (indicators that describe the performance and reach of the organization's products and services) . operational model. The IRIS framework consists of six parts: .solid and comparable information to calculate their figures and ratings.

liquidation. The buy-back arrangement implies that the social entrepreneur has sufficient funds to buy back the share of the social investor. non non-repayment of the loan or long-term delay on scheduled payments). there can either be a sale of the shares to a third party investor. 18 . In the case of debt capital. a buy-back arrangement. there can either be a repayment of the loan or the refinancing of the loan. Some social investor fund a significant Some share of the social enterprise’s operations and a exit can lead to funding issues. A social an issues investor can fund 10% of the total budget or take over part of the overhead costs for a given period of time. The exit routes for equity capital. Figure 5 Exit considerations Source: Achleitner & Spiess-Knafl (in press) Knafl In the case of equity capital. There are also exit considerations for grant funding. an initial public offering on a social stock exchange or the liquidation . If the social enterprise defaults on the loan (e.8 Exit Consideration In the chapter Negotiating the Financing Terms a few aspects related to exit considerations ed were already discussed. Social investor extends the period of the repayment schedule (“financial flexibility”).3. (“financial flexibility” Social investor accepts equity in exchange for the loan (“debt to equity swap”) swap”). When the social investor stops his grant funding after a few years the social enterprise either needs a follow up financing or should have reached financial selffollow-up self sustainability. The refinancing means that another social investor is willing to financ the social finance investor for the next period. there are three scenarios: Social investor institute bankruptcy proceedings to recover part of the loan institutes (“liquidation”). debt capital and grant funding are .g. shown in the following figure.

3 An overview of social stock exchanges can be found in chapter 4.1 Social Capital Markets Value Banks Value banks have the same role as commercial banks in the traditional capital markets. This new form of financing in the social sector is known as Venture Philanthropy. Companies have access to a large capital pool and investors can sell their shares or bonds without delay at any time. This approach reduces the transaction costs and the risk through diversification effects. A list of social investment advisors can be found in chapter 4.5 ”Value Banks” on page 39. They support the social enterprise in setting up an appropriate financing structure and finding the right investors. At the moment. Social Investment Funds Investment funds act as intermediaries between demand and supply by bundling funds from investors which they subsequently invest in certain asset classes. 19 . In addition. They also take deposits from savers and give loans to individuals and companies. An overview of those specialized loan providers can be found in chapter 6. Social Investment Advisors The traditional role of investment banks is the financial advisory of corporate clients and the matching of supply and demand. Social investment funds apply the same principle in the social sector.4 Appendix 4. They began to adopt venture capital techniques for their funding strategies.11 “Social Stock Exchanges” on page 49. They collect funds from individuals or foundations which they invest in a given sector such as microfinance or the solar industry. those banks focus on the social sector and have therefore a better understanding of the business models and the specific need and requirements of social enterprises. Venture Philanthropy Funds Over the last 15 years high-net worth individuals and foundations have started to rethink their funding strategies. three social stock exchanges with trading activities are being incorporated. On stock exchanges companies can issues shares or bonds which are then traded continuously. However. Social investment advisors take over the same role in the social sector. the savers sometimes accept a lower interest rate which can be passed on to the social enterprise. A social stock exchange can be an attractive financing option for social enterprises with a proven business model and significant financing needs.9 ”Social Investment Advisory” on page 46. High Engagement Philanthropy or Social Venture Capital 3 Due to strict regulatory requirements it is not yet clear if and when the first social stock exchange will start trading. Social Stock Exchanges A stock exchange is an efficient public platform to match supply and demand.

They publish research reports on different sectors and advise funders which organizations to support. Due to their similarities.John (2006) defines this approach as having the following characteristics: High engagement Tailored financing Multi-year support Non-financial support Organisational capacity-building Performance measurement Thus. they can support the social enterprise over a longer period of time and use tailored financing (also including grant funding).7 “Social Investors with Focus on Microfinance” on page 37. Funding Consultancies Rating and research agencies publish ratings and research reports on publicly listed companies to support investors in their capital allocation decisions. social investment funds and venture philanthropy funds are shown in the same overview. Venture Philanthropy funds also support the social enterprise on a non-financial basis with management consulting or pro-bono services. In the social sector funding consultancies take over this role.6 "Social Investors with General Investment Focus” on page 27 as well as chapter 4. An overview of those consultancies can be found in chapter 4. Therefore. social investors concentrate their funding and support only a limited number of social enterprises.10 ”Funding Consultancies” on page 48. 20 . An overview of the social investors can be found in chapter 4.

4. equipment or infrastructure. (2011) 21 . term The different financing sources and instruments are shown in the following figure. External financing is either used to cover negative operating cash flows or to finance long-term investments such as buildings. The service is either paid by the target group.2 Internal and External Financing Access to capital can be classified as: Internal financing External financing Internal financing is provided by cash flows generated through the operating activities of the social enterprise. third party beneficiaries or third-party public authorities. Figure 6 Classification of the financing structure Source: Achleitner et al.

equity and debt capital.3 Financing Instruments Grants The traditional form of financing in the social sector is based on grants which can be either provided in monetary or non-monetary form such as volunteering or in-kind contributions.4. there are some shortcomings related to grants. The stable and predictable cash flows are necessary as the debt capital providers receive an annual interest payment. Debt Capital Debt capital can be used for long-term investments or project financing which promise stable and predictable cash flows over the next years. The interest payment can be linked to the profits of the company whereas the total amount is repaid after a certain time period. Grants are regularly provided only for certain projects and usually exclude overhead costs and expenditures for the development of the social enterprise. Grants are usually provided by foundations or individuals and continue to be an important funding source for social enterprises. The social investor receives no regular annual payments but a share of the profits generated by the social enterprise. Control and voting rights depend upon the legal form of the enterprise and are usually structured in the contract between investor and investee. Normally. The grant character can be explained through the fact that there are no interest costs and in certain pre-agreed scenarios the financing instrument is converted into a grant. grants are usually short-term oriented. 10% of total shareholdings). Furthermore.g. not predictable and impose high fundraising costs on the social enterprises. The structuring flexibility makes mezzanine capital an attractive option for social entrepreneurs as well as social investors. Besides a share of the future profits. Equity Capital Equity capital is the financing instrument with the highest risk for the investor. Financing instruments with hybrid capital character include: Recoverable grants Forgivable loans Convertible grants Revenue share agreements 22 .7 years. Hybrid Capital As illustrated in figure 4. hybrid capital contains elements of grants. The social investors gives the social enterprise a certain sum in exchange for a share of the company (e. the social investor has certain control and voting rights. Mezzanine Capital Mezzanine capital combines elements of debt and equity capital and represents a convenient financing alternative if pure equity or debt capital is not applicable. Debt capital is provided on a temporary basis and requires the repayment after a few years. the loans are provided for 5 . Despite their importance.

This mechanism can be used if success of the project enables the social enterprise to repay the loan to the social investor. A convertible grant is another financing instrument with hybrid capital character. (2011) To conclude. Figure 7 Financing instruments Source: Achleitner et al. The social investor provides the enterprise with a grant which is converted into equity in the case of success. This risk sharing model can be used for the repayment of the financing and gives the social enterprises financial flexibility. Revenue share agreements are financing instruments where the investor finances a project and instruments receives a share of the future revenues. A forgivable loan is a loan which is converted into a grant in the case of success. If the social enterprise reaches the goals agreed beforehand between investor and investee the loan does not to be repaid. the following table shows the description and implications of the different financing instruments.A recoverable grant is a loan which has only to be paid back if the project reaches certain previously defined milestones. 23 . If the milestones are not reached the recoverable grant is converted into a grant.

Key targets for the next Half Year [add information on the key targets for the next reporting period] ____ ____ ____ ____ ____ ____ ____ ____ ____ Revised annual budget ____ ____ ____ ____ dd/mm/yyyy 24 . Comments and additional information on the social impact figures [add information about the development of the social impact figures] 7. Reasons if the annual budget has been amended [add information why the budget has been changed over the reporting period] 8. Measured social impact Results over Half Year ended Number of people employed Number of activities Number of website visitors Numbers of press articles published [add further relevant numbers] 3. Unfavorable development over the period (weaknesses) [add information of the failures and the areas which developed unfavorably] 6. Activity development over the period [add information on the key developments of the last reporting period] 4. Profit & Loss (€) Half Year ended Sales EBIT Net Income Costs 2. Favorable development over the period (strengths) [add information of the successes and the areas which developed favorably] 5.4.4 Reporting Template Name of the Organization: [add the name of the organization] 1.

Number of Employees ______ employees 5.5 Investment Template Name of the Organization: [add the name of the organization] 1. Streams of Revenues (including donations and governmental money) of the past 3 years 2008: US$ ______ 2009: US$ ______ 2010: US$ ______ 6. The headquarter is based in ______ 4. Information about the Founder [add information about the founder and the idea that led to the foundation] 2. Description of Markets a) Current market [add information on the current market] b) Market Potential / Growth Opportunities [add information on the potential national / international demand and potential growth strategies] c) Competitors [add information on your competitors and explain the difference to your approach] 25 . Year of Foundation The organization was established in ______.4. Business Model [add information about the business model including access to the target group and description of the target group] 3.

role within social enterprise ______ ______. Chairman. Requested Amount of Money US$ ___ 10. Use of Capital [add information on how the capital will be used] 11. role outside of social enteprise Management ______ ______. Executive Director ______ ______. Grants and Awards [add information on the grants and awards the social enterprise has received in the past] 9.6. role within social enterprise 7. role outside of social enteprise ______ ______. Type of Investment you request (Loan or Equity) ______________ 26 . role outside of social enteprise ______ ______.] 8. role outside of social enterprise ______ ______. Reporting System [add information on the specific reporting system you are using. That can include the key figures you are monitoring on a regular basis or what information you are reporting to the Board of Directors / Advisory Board. role outside of social enterprise ______ ______. Governance Structure Board of Directors / Advisory Board ______ ______.

Equity capital .4.com Auridis Gruenstrasse 18 41460 Neuss Germany +49 2131 1511842 info@auridis. Third Floor London W1J 5JA United Kingdom +44 20 7016 4300 anna.Grants German-speaking countries and some international activities .Debt capital .Convertible grant India - Agriculture Cleantech Livelihoods Water Auridis invests globally in endeavours.org Artha Initiative Leconfield House.Interest-free loans . East Africa India Pakistan - Water Health Agriculture Energy Housing The Artha program strives to support high impact sustainable enterprises that are validating the market niche for providing goods and services to the ‘bottom of the pyramid’ in India.org www. NY 10011 United States of America +1 212 566-8821 mtada@acumenfund. Curzon Street.mustoe@riantacapital. with an emphasis on agriculture.Support of young children from sociallydisadvantaged families 27 . . can build thriving enterprises that serve vast numbers of the poor. which sustainably improve the life opportunities for socially disadvantaged children. combined with large doses of business acumen. energy and livelihoods.acumenfund.com www.de Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. .6 Social Investors with General Investment Focus Social Investor with short Mission Statement Main Financing Instruments Debt capital Equity capital Guarantees “Lab Investments” (experimental investments) Geographical Focus Main Sector focus Contact Details Acumen Fund 76 Ninth Avenue.arthaplatform. Small amounts of philanthropic capital. Suite 315 New York.

The foundation seeks projects that are innovative with a strong social impact. - Equity capital Mezzanine capital Debt capital Grants German-speaking countries .org www.org www.venturesome.bonventure.de The Children’s Investment Fund Foundation (UK) aims to demonstrably improve the lives of children living in poverty in developing countries through large-scale and sustainable impact. St Andrew’s House.Marginalized groups . sanitation and emergency and hygiene and humanitarian aid The Children’s Investment Fund Foundation 7 Clifford Street London W1S 2WE United Kingdom +44 207 440 2357 info@ciff. .Grants Africa Asia Mid Americas .Equity capital United Kingdom .org Charities Aid Foundation 7th Floor. and will be financially self-sustaining in the long term. are led by motivated and committed social entrepreneurs.org CAF Venturesome is a social investment fund that provides investment to help charities and social enterprises deliver on their mission.de www.ciff.Debt capital .Children. water. education.Children living in poverty in developing countries.No sector focus 28 . 18-20 St Andrew Street London EC4A 3AY United Kingdom +44 3000 123 300 venturesome@cafonline.Employment and education .Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details BonVenture funds companies and organisations with a social purpose in German-speaking countries. young people and the elderly . specifically HIV/AIDS.Ecological BonVenture Pettenkoferstrasse 37 D-80336 München Germany +49 89 2 00 01 2530 info@bonventure. .

No focus d. CIC focuses on early growth-stage forprofit companies whose management shares its vision that technology-driven solutions focused on delivering the highest value to underbanked people can create great businesses and strengthen the Amercian middle class.nl www. Convivatus wants to be a catalyst for positive social change.o.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Convivatus Social Capital Schnabelweg 60 8832 Wilen Switzerland + 41 44 380 1650 frank.com Convivatus Social Capital provides uccessful social entrepreneurs the strategic and financial basis for sustainable growth.com - Debt capital Convertible loans Mezzanine finance Equity capital Convertible grant The Netherlands Africa .dobfoundation. .Equity capital United States .Compatibility of family and work .convivatus.com www.Mezzanine capital .b foundation invests in and supports social entrepreneurs who identify commercial opportunities in social issues. d.Equity capital German-speaking countries . NY 10012 United States of America +1 212 780 0193 info@corevc.Young people .hinrichs@convivatus. The foundation strives for a structural improvement of the wellbeing of people who are marginalized or living in poverty.Services for the elderly Core Innovation Capital invests in the most innovative companies serving underbanked consumers.o.com www.Financial technology companies providing consumer finance products Core Innovation Capital 611 Broadway New York.nl 29 .Debt capital . In this way.b Foundation IJsseldijk 1 8194 LA Veessen The Netherlands +31 578631111 info@dobfoundation. .corevc.

org www.Microfinance 30 .Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details The EH Foundation Kappelistrasse 41 704 Herrliberg Switzerland +41 7946 90396 eva@theehfoundation.no www.Children and young people . rue Vaneau 75007 Paris France +33 14548 8856 contact@ fondationdemeter.Interest-free loans . supporting and scaling innovative ideas that directly and positively impact the lives of the world’s most impoverished people.ferd. - Grants Debt capital Equity capital Convertible debt Africa Asia .Children and young people Fondation Demeter helps charities improve their operating processes and governance principles so as to make the best use of their resources and to move towards self-sufficiency .O.Box 34 1324 Lysaker Norway +47 67 10 80 50 / +47 957 21 740 kgl@ferd.theehfoundation.com The EH Foundation’s goal is to be the partner of choice for both social entrepreneurs and social philanthropists in sourcing.“Bottom of the Pyramid” solutions Ferd Social Entrepreneurs supports social entrepreneurs who work to help ensure that children and young people can realize their goals and recognize that they do have opportunities.org Ferd Social Entrepreneurs P.Grants Worldwide . - Grants Guarantees Convertible loan Equity capital Convertible grants Norway .com Fondation Demeter 44.

L.Children and young people The Ford Foundation is an independent. 10017 USA +1 (212) 573 5000 www. By providing effective responses to the enormously underserved needs of low income populations. N.org Ford Foundation 320 East 43rd Street New York.org www.fordfoundation. - Debt capital Equity capital Loan Guarantee Grants Worldwide - Democracy Economic fairness Education and research Environment Human rights Health Social Justice IGNIA is a Mexian venture capital investment firm that supports the founding and expansion of high growth social enterprises that serve the base of the socio-economic pyramid.Equity capital Latin America . Ricardo Margáin 575 Parque Corporativo Santa Engracia San Pedro Garza García. LLC Av.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Fondazione Oliver Twist Onlus Via Bigli. and have a voice in the decisions that affect them. The fund aims to give all people the opportunity to reach their full potential. contribute to society.org Fondazione Oliver Twist Onlus operates in the social field by setting up and supporting projects designed to help minors in difficult circumstances . nonprofit. IGNIA empowers entrepreneurship and generates social impact while creating attractive financial returns for its investors.Y. nongovernmental organization. both as consumers as well as active participants in productive value chains. México 66267 +52 81 8000 7165 www.Grants Italy .ignia. 21 20121 Milan Italy +39 277718726 info@fondazioneolivertwist.Base of the Pyramid IGNIA Partners.Debt capital .mx 31 . .com.fondazioneolivertwist. N.

. very hands-on support from the Impetus investment team and specialist support for capacity building.Grant Scotland .Children .impetus.uk Inspiring Scotland’s aims to change people’s lives for the better through significant long term funding and development support for Scotland’s charities.vp@lgt.Debt capital .com www.uk www. Impetus achieves this through its highly effective model of venture philanthropy which has three key components: unrestricted strategic funding.Grants United Kingdom .org.lgt.org.Grants .Education .Youth Inspiring Scotland Riverside House 502 Gorgie Road Edinburgh EH11 3AF United Kingdom +44 131 442 8760 enquiries@ inspiringscotland. .Poverty reduction Impetus Trust 20 Flaxman Terrace London WC1H 9PN United Kingdom +44 203 3843940 info@impetus.inspiringscotland.Relief of human suffering .org.uk LGT Venture Philanthropy Städtle 28 9490 Vaduz Principality of Liechtenstein +41 44250 8281 lgt. It seeks to create sustained change and to achieve long lasting impacts for Scotland’s most vulnerable people and communities through partnership and collaboration and by tackling tough social issues.org.Equity capital Africa China India Southeast Asia Latin America .Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Impetus Trust invests in ambitious charities and social enterprises that fight economic disadvantage.Creation of sustainable livelihoods 32 .uk www.com The objective of LGT Venture Philanthropy is to raise the sustainable quality of life of less advantaged people especially those in the developing world .

These innovations are related to health and care.com www.Culture and recreation .Environment . The One Foundation is a private philanthropic fund that will spend down its capital over ten years (2004-2013).onefoundation.Debt capital .noaber. .Grants Ireland Asia The One Foundation 35 Barrow Street .Development and housing .Grants Europe Africa Asia North America .vonrichter@phitrust.Debt capital its foundation and social investment funds.Mental health Ireland .ie .Integration of +353 1 8088800 minorities info@onefoundation. education and community building.phitrustpartenaires.Equity capital companies in the fields of social business through . Phitrust focuses its investments both at a European level as well as a worldwide level.Microfinance .Health . PO BO 20 6740 AA Lunteren The Netherlands + 31 31859 6400 poostlander@noaber.Employment PhiTrust Active Investors 41 rue Boissyd’Anglas 75008 Paris France +33 15535 0755 martina.com PhiTrust is dedicated to funding and mentoring .Education and research .com The noaber Foundation aims to initiate and support the acceleration of innovations in the civil society where ‘noabership’ (neighbourship) is key.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details noaber Foundation Dorpsstraat 14.Poverty & disadvantage Dublin 4 . Worldwide 33 .Equity capital . they act as an ‘entrepreneurial philanthropist’. To reach their aims.com www.Cleantech .ie www.Health The One Foundation aims to improve the life chances of disadvantaged children and young people. .

innovative business models in developing countries and emerging markets.com www. . employment or training (NEET) so they can reach their full potential. and adults who are overcoming barriers to employment. It gives funding and business assistance to a carefully selected portfolio of social enterprises that employ young people disconnected from school and work. . Rivington Street.org www.Equity capital .privateequityfoundation.org The Private Equity Foundation’s core mission is to reduce the number of young people not in education.Equity capital information. Suite 320 San Francisco.Small and mediumsized enterprises in developing countries responsAbility Social Investments Josefstrasse 59 8005 Zurich Switzerland +41 44250 9930 info@responsAbility. ResponsAbility is constantly on the lookout for entrepreneurial.com 34 . CA 94105 United States of America +1 (415) 561-6677 www.responsability.Grants Europe . London EC2A 3DB United Kingdom +44 845 838 7330 info@privateequityfoundation. products and . markets. youth . We recognise that young people face a journey from birthplace to workplace with numerous obstacles preventing them reaching their full potential.Children.Grants United States (California) . Worldwide .Children and young people REDF is a San Francisco-based venture philanthropy organization that invests in nonprofit-run businesses.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Private Equity Foundation 2 Bath Place.Fair trade producers .Debt capital .Microfinance institutions .Education and research . investing in these ideas directly or indirectly via investment products.redf.Employment responsAbility provides commercial finance to organizations and initiatives that give people at the base of the pyramid access to services.org REDF 631 Howard Street.

therefore the general approach comprises the entire solar PV value chain and related financial services.socialinvestorsclub. NY 10003 +1 (212) 227-6601 info@robinhood. .com Solar for All is a global initiative that wants to take a big step ahead in making solar energy affordable to the 1.sfa-pv.Equity capital Latin America Africa Asia .org 35 .Social Investor with short Mission Statement Main Financing Instruments Geographical Focus - Main Sector focus Contact Details Robin Hood Foundation 826 Broadway.No focus Social Investors Club 29/F.org www.org www. finance.6 billion people without access to electricity. youth Education and research Poverty Health Social Investors Club is a social investment company established in Hong Kong in 2010. . 10-14 79098 Freiburg Germany +49 761 2020 172 contact@sfa-pv. SIC invests in social enterprises driven by clearly defined missions for creating positive social or environmental impact . social service and academia backgrounds.robinhood.Solar industry Canopus Foundation Grünwälderstr. Formed by 10 socially-minded investors with diverse business.Grant New York City Children.Equity capital .Debt capital .org Robin Hood targets poverty in New York City by finding and funding the best and most effective programs and partnering with them to maximize results.Mezzanine capital Hong Kong . 8 Wyndham Street Central.Debt capital . Hong Kong +852 21568876 info@socialinvestorsclub. More than single social entrepreneurs have to be supported to accomplish a systemic change.com www. 9th Floor New York.

Mezzanine capital Europe .Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Social Venture Fund Sendlingerstr. Websites 36 .com www. 7 80331 Munich Germany +49 6960 9184-15 info@socialventurefund.com The Social Venture Fund invests in social businesses.socialventurefund.Equity capital .Debt capital .No focus Table 2: List of social investors Source: EVPA. The Fund provides support when it is not possible to acquire traditional sources of capital. . which have innovative and entrepreneurial driven solutions for urgent social and environmental challenges.

nl The ASN-Novib Fund aims to promote a broad participation of all groups in the market economy of developing countries.Microfinance institutions 37 .Debt capital Worldwide . small and medium enterprises in emerging and least developed economies. .Microfinance institutions The Dexia Microcredit Fund is the first commercial investment fund designed to finance microfinance institutions specialized in financial services to small companies in emerging markets (co-managed by BlueOrchard Finance).com Dual Return Fund Absolute Portfolio Management Wallnerstraße 3 / 17 1010 Vienna Austria +43 1 533 59 76 info@visionmicrofinance.asnbank.Guarantees .com The Dual Return Fund has a double bottom line strategy.com www.7 Social Investors with Focus on Microfinance Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Africa Asia Latin America Former Soviet Union Eastern Europe Main Sector focus Contact Details ASN Bank Alexanderstraat 28 2514 JM Den Haag The Netherlands +31 70 356 933 www.4. the fund makes capital available to financial institutions providing credit to clients with economic opportunities but limited access to financial services .Microfinance institutions Dexia Microcredit Fund 32 Rue Malatrex 1201Genève Switzerland +41 22 596 4777 info@blueorchard. .com www. The fund maximizes both the risk-return profile to benefit the investor and the social outreachin breadth and depth to micro.Debt capital Africa Asia Central and Eastern Europe Latin America .Debt capital .blueorchard. To achieve this.visionmicrofinance.Equity capital .

rue Vaneau 75007 Paris France +33 14548 8856 pascal@ceresfinance.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details The European Fund for Southeast Europe aims to foster economic development and prosperity .org 38 . .com Oikocredit. churches and others to share their resources through socially responsible investments and by empowering disadvantaged people with credit.efse.com www.Microfinance institutions European Fund for Southeast Europe Eschersheimer Landstr. The fund offers long-term funding instruments to qualified partner lending institutions to better serve the financing needs of micro and small enterprises and low-income private households Southeast Europe . promotes global justice by challenging people. as a worldwide cooperative society.Children and young people .Microfinance Fondation Demeter 44.Debt capital through the sustainable provision of additional .Equity capital development finance.Microfinance institutions Oikocredit P.Grants Worldwide .Debt capital Africa Asia Europe Latin America .oikocredit.org www. 6 60322 Frankfurt am Main Germany +49 69 9778765026 s.O. Box 2136 3800 CC Amersfoort Netherlands +31 33422 4040 info@oikocredit.Interest-free loans .lu Fondation Demeter helps charities improve their operating processes and governance principles so as to make the best use of their resources and to move towards self-sufficiency .djikic@finance-in-motion.

edu/microfinancefund responsAbility provides commercial finance to organizations that give people at the base of the pyramid access to services. markets. investing in these ideas directly or indirectly.nl Table 3: List of social investors Source: Websites 39 . .com www.Microfinance institution . responsAbility is constantly searching for entrepreneurial.tufts.Debt capital .Debt capital . .snsam.Debt capital Africa Eastern Europe Latin America Southeast Asia . innovative business models in developing countries and emerging markets. The fund does not grant loans to individual businesses but lends money to or invests in the share capital of microfinance institutions.Microfinance institutions Omidyar-Tufts Microfinance Fund microfinance@tufts. products and information.Equity capital .Fair trade producers .Equity capital Worldwide .Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details The Omidyar-Tufts Microfinance Fund was launched in 2005 through a unique partnership between Pierre and Pam Omidyar and Tufts University. .responsability.Microfinance institutions SNS Institutional Microfinance Fund Pettelaarpark 120 5216 PT 's-Hertogenbosch The Netherlands +31 73683 3355 www.com The SNS Institutional Microfinance Fund aims at providing resources for small self-employed operators in a large number of developing countries against rates that are in accordance with the market.Equity capital Worldwide .Small and mediumsized enterprises in developing countries responsAbilitySocial Investments Josefstrasse 59 8005 Zurich Switzerland +41 44250 9930 info@responsAbility. The Omidyars gave the university $100 million to create a fund that would be invested entirely in international microfinance initiatives.edu www.

inspired by the values of a sustainable social and human development. Switzerland .Organizations operating within the third-sector that carry out civil society oriented economic projects BancaPopolareEtica Via NiccolòTommaseo 7 35131 Padova Italy +39 498771111 www.bancaetica.it 40 . .ch Banca Popolare Etica was created in 1999 by a big coalition of the major Italian social organizations who wanted to create a place where savers. As the leading provider of ethical banking services and a pioneer in the implementation of social and environmental standards. driven by the common desire of a more transparent and responsible management of financial resources.4.ch www. Italy .Renewable energy Alternative Bank Schweiz Amthausquai 21 4601 Olten Switzerland +41 62 206 16 16 contact@abs.Social or ecological housing .Organic agriculture. ABS gives encouragement to the Swiss banking and financial markets.8 Value Banks Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details The Alternative Bank Schweiz emphasises ethical principles instead of maximum profits.bas. may meet socioeconomic initiatives.

org 41 . .com Bolivia Banco Sol is a bank that offers opportunities to the lowest-income sectors for a better future.Bolivia +5912 2484242 info@bancosol. providing them with high-quality.Entrepreneurs with a small capital base but with dynamic adjustment capabilities Brac Bank aims to build a profitable and socially responsible financial institution focused on Market and Business with growth potential. enlightened.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details BancoSol CalleNicolás Acosta No.bo www.O.com.bancosol.com.bo BRAC Bank 1 Gulshan Avenue Gulshan-1 Dhaka 1212 Bangladesh +880 2885 2233 enquiry@bracbank. thereby assisting BRAC and stakeholders build a "just. integrated financial services.No focus Charity Bank 194 High StreetTonbridge Kent TN9 1BE United Kingdom +44 1732 774040 enquiries@charitybank. Box: 13176 La Paz . healthy. with the support of depositors and investors who want to use their money to facilitate real social change . 289 P.Microfinance (in a related program) . charities and community organisations.SME. Retail and Corporate United Kingdom Charity Bank finances social enterprises.bracbank. Bangladesh .org www. democratic and poverty free Bangladesh".com www.charitybank.

Germany - Agriculture Development aid Education Health care Social welfare GLS Bank Christstr. social and cultural sectors Merkur Cooperative Bank Vesterbrogade 40. Merkur pursues a situation where the individual. conducting a professional. 1620 Copenhagen V Denmark +45 7027 2706 kbh@merkur.merkur. 1.dk 42 . and on criteria that include environmental. based on his own insight. The bank emphasises building alliances between depositors and lenders and to underpin this it practises transparency as a carrying principle. sustainable banking business means the incorporation of social. social and ethical aspects in addition to financial considerations. meets the needs of others in a dignified way. Denmark . ecological and economic criteria.de Merkur Cooperative Bank is founded on the idea of conscious handling of money. 9 44789 Bochum Germany +49-234-5797-0 www.no www.Environmental.gls.dk www.cultura. Norway - Education (private schools) Agriculture Healthcare Housing Microfinance For GLS Bank. The money of our customers is invested exclusively in companies and projects whose performance under the above mentioned criteria is outstanding.no Cultura Bank's main task is to finance projects which benefit society and contribute to a better natural environment.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details Cultura Bank Holbergsplass 4 i Oslo 0130 Norway +47 2299 5199 cultura@cultura.

com www. Suite 110 San Francisco. environmental.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details Mibanco. and our commitment to putting deposits to work for good.com.No focus new resource bank’s mission is to advance sustainability with everything we do—the loans we make. CA 94105 United States of America +1 415 995 8100 ggroff@newresourcebank. We manage the financial. Domingo Orue 165 Surquillo Peru +51 319 9999 www. To us.pe Mibanco is committed to offering their communities opportunities for progress and access to the financial system. Peru .newresourcebank.mibanco.com 43 . and social impacts of our activities to promote the global well-being of future generations.. the way we operate. Banco de la Microempresa Av. United States .No focus New Resource Bank 405 Howard Street. banking isn’t just a service—it’s a way to create a better world.

they serve as a catalyst for the self-reliance and economic well-being of our membership and community. individuals and families.Nature and the environment sectors (organic agriculture. institutions and projects that add cultural value and benefit people and the environment.North-South projects (fair trade. with the support of depositors and investors who want to encourage corporate social responsibility and a sustainable society.com Vancity aims to be a democratic.com www. Suite 100 Oakland. microfinance) Triodos Bank Nieuweroordweg 1. 3704 EC Zeist The Netherlands +31 30 693 65 00 www.triodos.Social business . Through strong financial performance. community facilities. Canada . wholesale. United States .Green industries OneCalifornia Bank 1438 Webster Street. non-profit organizations.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details OneCalifornia Bank will improve economic opportunity for low-to moderate-income communities throughout California.vancity.com Triodos Bank finances companies. and innovative provider of financial services to their members. health food stores and renewable energy ) . ethical.Housing .OneCalBank. BC Canada +1 604 877 7000 www. affordable-housing developers.No focus Vancity PO Box 2120 Station Terminal Vancouver.Culture and society . Triodos Bank´s mission is to help create a society that promotes peoples´ quality of life and that has human dignity at its core Africa Asia Europe South America .com 44 . CA 94612-3206 United States of America +1 51055 08400 mybank@OneCalBank. We will partner with respected community institutions to provide banking services to small to medium-size businesses.

xacbank.Environment Table 4: Value Banks Source: Websites. People. including its traditional Microentrepreneurs as well as Small and Medium businesses.mn Xac Bank aims to contribute to sustainable development of Mongolia that can come only from educated and skilled people and competitive and dynamic businesses concerned equally about Planet.Box-46/721 Ulaanbaatar – 14200 Mongolia +97611 318185 www. and Profit. reliable and responsive banking products and services to the Bank's clients.Education .O. Global Alliance for Banking on Values 45 . The Bank will provide equitable access to transparent. Mongolia .Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details XacBank Prime Minister Amar's Street Sukhbaatar district P.

com avant-gardist identifies. corporations.com www. energy.IP tools (patents. Global .com www. We assist our clients distinctive and sustainable values across the globe. Suite 1610 Arlington. 46 . Developing countries .com Light Years IP 1700 N Moore St.à. education. livelihood opportunities. sanitation and the like Bamboo Finance S. healthcare. VA 22209 United States of America +1 703 600 8324 info@lightyearsip. water.l.Services for low income communities by providing access to affordable housing. We leverage our client’s expertise and and insights to benefit society and sharpen their competitive advantage Global .lightyearsip.avant-gardist.net www.No Sector focus Bamboo Finance’s mission is to create value for our investors. We achieve this by promoting appropriate finance for the growth of enterprises which are having a direct positive impact on society.net Light Years IP is a non-profit organization dedicated to alleviating poverty by assisting developing country producers gain ownership of their intellectual property and to use the IP to increase their export income and improve the security of that income.4. banks and nonprofits increase their social impact. partners and the field of social entrepreneurship.r.9 Social Investment Advisory Social Investment Advisory with short Mission Statement Geographical Focus Main Sector Focus Contact Details Avant Gardist Johannesgasse 18 1010 Vienna Austria +43 1229 7139 office@avant-gardist. 32 rue de Malatrex 1201 Geneva Switzerland +41 22 596 4750 info@bamboofinance.bamboofinance. design and implement social projects that help foundations. trademarks and licenses) to secure more sustained and higher export income.

Latin America Africa . innovation. W1W 5BB United Kingdom +44 207 667 6370 info@socialfinance.totalimpactadvisors.org root capital envision thriving rural communities where small-scale producers have access to markets and financial services to lift themselves out of poverty while strengthening the health of our planet. development.uk www. 5th floor Cambridge.org www.Small grassroots businesses Many charities and social enterprises face serious financial challenges that stop them from carrying out their work effectively. Social Finance believe that. public policy and private investment.No Sector focus Total Impact Advisors mbrownrigg@ totalimpactadvisors. Our role is to devise the financial structures and raise the capital to enable this to happen. With our deep roots in banking." Table 5: Social Investment Advisory Global .socialfinance.org.uk Total Impact Advisor's mission is to advise both entrepreneurs and those seeking to maximize the social impact of their capital.Social Investment Advisory with short Mission Statement Geographical Focus Main Sector Focus Contact Details Root Capital 955 Massachusetts Ave.com www. organisations seeking to solve them need sustainable revenues and investment to innovate and grow.No Sector focus Social Finance Ltd 131-151 Great Titchfield Street London.org.com Source: Websites 47 . UK . if social problems are to be tackled successfully. we believe we have a team that can find the nexus where "social purpose meets financial promise. MA 02139 United States of America +1 617 661 5792 finance@rootcapital.rootcapital.

phineo.org Phineo Anna-Louisa-Karsch-Straße 2 10178 Berlin Germany +49 30 520065400 info@phineo. so that more lives can be changed for the better.org www. NPC's mission is to put effectiveness at the heart of how charities work and how funders give.org New Philanthropy Capital (NPC) is a consultancy and think tank dedicated to helping funders and charities achieve a greater impact.philanthropycapital. multistage analysis process. we build bridges between social investors and nonprofit organizations.10 Funding Consultancies Funding Consultancy with short Mission Statement Geographical Focus Main Consulting focus Contact Details New Philanthropy Capital 185 Park Street 3rd Floor London SE1 9BL United Kingdom +44 20 7620 4850 info@philanthropycapital.Global .No Focus Germany PHINEO’s mission is to strengthen the nonprofit sector and civil society.No Focus Source: Websites 48 . Table 6: Funding Consultancies . . Using our unique.4.org www.UK .

The Social Stock Exchange is designed to provide access to capital – specifically risk capital – for organisations that are for-profit social purpose businesses. legal requirements for establishing a 'real' exchange are being clarified in collaboration with BaFin (the German federal financial supervisory agency). transport.No trading yet Pradeep Jethi.asiaiix.com Source: Websites.11 Social Stock Exchanges Social Stock Exchange with Short Mission Statement Trading Centre Focus Contact Details Impact Investment Exchange (Asia) 93A Amoy Street Singapore 069913 +65 6221 7051 info@asiaiix. allowing them to more rapidly expand the impact of their activities.and green-technology.No trading yet London . In the months to come.com Impact Investment Exchange Asia aims to provide Social Enterprises in Asia with greater access to capital. Table 7: Social Stock Exchanges . leisure.com NExT SSE c/o KonvergentaInterZero GmbH Rungestr. housing. and clean.and ethical consumerism.No trading yet NExt SSE is a project committed to bringing capital to social ventures .com www.4.com www. CEO: pjethi@gmail. 19 10179 Berlin Germany +49 30 6098810 10 info@nextsse. Singapore .organisations with a social. most likely to be from sectors that create social value such as health.nextsse. Personal information 49 . ethical or Berlin ecological focus and a sound business model. green.

Japhet Heartlines .5 Task Force Members Martin Burt Fundación Paraguaya Macarena Currin Rodelillo Foundation Enayetullah Iftekhar Waste Concern Christopher J. Elias PATH (Programme for Appropriate Technology in Health) David Green Ronald Grzywinski Andreas Heinecke Dialogue Social Enterprise Garth C.

Timothy Ma Kam Wah Senior Citizen Home Safety Association (SCHSA) Shona McDonald Shonaquip Kovin Naidoo International Center for Eye Care Education (ICEE) Ziad Refai Tamweelcom Arregui Álvaro Rodríguez IGNIA Compartamos Banco Pierre Tami Hagar International Silverius Oscar Unggul Telapak Bart Weetjens HeroRAT Ariel Zylbersztejn Cinepop 51 .

......... 22 Hybrid capital ................. 38 Fondazione Oliver Twist Onlus .. 27 Alternative Bank Schweiz ....... 31 Forgivable loans .................................................................... 49 noaber Foundation ....... 29 Debt capital .................................................................................................................................................................................... 46 Banca Popolare Etica................................................... 11 EH Foundation ........ 35 Social Stock Exchange London .............. 28 Charity Bank . 39 Social capital markets ....... 21 LGT Venture Philanthropy ................................................ 44 Value banks ................................................................................ 22 Mibanco ................... 43 NExt SSE ..................................................................... 19 Social investment funds ................................. 41 BonVenture .............. 13 New Philanthropy Capital.................................................... 29 Core Innovation Capital .. 22 Funding consultancies ............................b foundation............................................. 11 SNS Institutional Microfinance Fund .............. 35 Task force members. 40 Artha .. 46 Merkur Cooperative Bank ...................................................... 19 Vancity............ 49 Impetus Trust............. 28 Brac Bank ............................................ 22 IGNIA............................. 20 GLS Bank ........................................................................... 44 Performance measurement..................... 43 Negotiating the financing terms...................................................................................................................................... 42 d... 19 Xac Bank ..................... 18 External financing .......................... 37 Due diligence. 42 Grants ..... 16 PHINEO........................... 30................ 35 root capital ..... 33 Oikocredit ......... 41 Children’s Investment Fund Foundation ......................................................................... 33 Private Equity Foundation ............................................... 42 Mezzanine capital ....................................................................... 39 Revenue share agreements ......................................................................................................... 19 Social Venture Fund .......6 Index Acumen Fund .... 38 Exit ........ 30 Financing instruments .... 47 Screening ................. 23 Fondation Demeter ................................................................................................................................................. 47 Social investment advisors .................................................... 18.......... 28 Convertible grants ...... 6 Social Finance............ 39 OneCalifornia Bank ..................................... 30 Equity capital................... 22 REDF ...................................................................... 22 Robin Hood........................................... 29 Cultura Bank ........................................................... 31 Impact Investment Exchange Asia .... 37 Dual Return Fund ................................ 50 The One Foundation ...................... 34 Recoverable grants............................................ 19 Social Investors Club ......... 46 Bamboo Finance ........................................................... 21 Ferd Social Entrepreneurs . 31 Ford Foundation .... 40 Banco Sol .......................... 32 Internal financing ......... 34 responsAbility ............................................................................................................... 22 Convivatus Social Capital ..................... 22 European Fund for Southeast Europe ............................................o................................... 32 Light Years IP ............................ 36 Solar for All ................................................................................................................................................................................... 27 ASN-Novib Fund ....................................................................................... 41 CAF Venturesome ........................... 22 Dexia Microcredit Fund ...................................... 32 Inspiring Scotland ........................................................ 48 PhiTrust .............................................................................. 45 52 .......................... 11 Selection process ...................................................................................... 49 Social stock exchanges ...................................................................... 44 Venture philanthropy funds ............................................................................................ 37 Auridis ......................... 33 Total Impact Advisor .......................................................... 27 avant-gardist ................. 48 new resource bank ...... 38 Omidyar-Tufts Microfinance Fund............................................................... 47 Triodos Bank ...........................................................................................................

ssrn. Download: www. B. W. A. (Ed.sbs.-K.gabv. W. Gabler Verlag. R. & Volk. (2008) 'Private Equity in Familienunternehmen: Erfahrungen mit Minderheitsbeteiligungen'. S. S. P. & Spiess-Knafl.com/sol3/papers.cfm?abstract_id=1117903. (2004): Double Bottom Line Project Report: Assessing Social Impact in Double Line Ventures. Social Entrepreneurship . Roder. / Long. A.eu. W.7 Sources The content is based on a survey of Schwab Fellows conducted in December 2010. Schraml. Pöllath. VS Verlag. Understanding Social Entrepreneurship & Social Business Be Part of Something Big.).-K. John. Download: http://papers. Websites used for a general overview were: European Venture Philanthropy Association (EVPA) Global Alliance for Banking on Values (GABV) Schwab Foundation for Social Entrepreneurship www.-K.evpa.com www. Achleitner. (2006) 'Venture Philanthropy .The Evolution of High Engagement Philanthropy in Europe'.ox.Social Busines.org www. & Tappeiner. A. in Hackenberg and Empter (Ed. / Rosenzweig.. / Olsen. Konzepte zur finanziellen Entrepreneurs'.). D.. Wiesbaden. Achleitner. C.uk/skoll. Clark. (2010) 'Finanzierung von Social Entrepreneurship durch Venture Philanthropy und Social Venture Capital'.schwabfound.ac. & Stahl. (2010) 'Reporting im Social Entrepreneurship'. (2011) 'Finanzierung von Social Enterprises – Neue Herausforderungen für die Finanzmärkte'.. Wiesbaden Most websites were cited in the text.-K. Stuttgart: Schäffer-Poeschel. Wiesbaden. Tokarski & Ernst (Ed. S. F. interviews with Schwab Fellows and the following literature: Achleitner. Spiess-Knafl. Gabler Verlag. (in press) 'Financing of Social Entrepreneurship' in Volkmann. R. (2007): 'Finanzierung von Unterstützung von Social Achleitner. E. Heister.) Sozialunternehmern. A.org 53 .

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