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

In addition to the financing institutions. The institutions in the social sector and their equivalent in the traditional capital markets are shown in the following figure.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. there are also institutions whic advise social which enterprises and funders how to structure an investment. Figure 1 Social Capital Markets Source: Achleitner & Spiess-Knafl (in press) Knafl Each institution focuses on a specific segment of the social sector. Please see appendix on page 19 for an see overview. 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. 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. 6 . Social stock exchanges could be an attractive funding sourc for . source mature social enterprises with a proven business model and significant capital needs while venture philanthropy funds provide capital for younger and innovative enterprises.

would you be able to take on capital that requires annual interest or dividend payments (e. 7 . 5% interest)? s interest) Classification of available financing instruments Figure 2 Illustration based on Achleitner Spiess-Knafl & Volk (2011) Achleitner. 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.1 Available Financing Instruments ble The first step in finding the right financing structure is the choice of the right financing instrument.3.g.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. 3. Those financing instruments are described in the following table as well as in more detail in chapter 4. When determining the right financing instrument.

High fundraising costs .Financing Instrument Term Sheet Duration: Short term Implications for Social Enterprise .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 .

The geographic focus and the sector focus are therefore usually hard criteria.2 Finding the Right Inv Investor The second key element in determing the right financing mix is the financing source. 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 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 first meeting with the social investor or a discussion with other investees are good ways to answer this question. For this reason a social investor might only invest in youth projects in Western Europe.3. 9 .000 social investors can syndicate the investment (simultaneous investment of two or more investors).000. the financing terms and the investment stage do offer room for negotiation. However. This “proof of concept” is usually not oncept negotiable. The questions to ask in finding the right investor are shown in the following figure. The social entrepreneur also has to consider if the social investor shares the same values and has a similar mission. In the case of significant capital needs exceeding a limit of ~$1.

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

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. Additionally. creativity and biography. Basically. creativity.4 Screening and Due Diligence Process Social investors usually analyze a few hundred social enterprises per year and use a multistage selection process. Fund managers regularly discuss different aspects within the group “Social Entrepreneur”. empowerment strategies. Fund managers analyze the business model as well as capital requirements. 11 . Relevant questions could include aspects such as access to the target group. The most discussed criteria are dedication. attitude and development potential. Within the selection criterion “Social Impact” fund managers analyze the scalability and reach of the business model.3. 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. Within this selection process. The factors can be generally divided into five groups which are strategic skills. A sample of questions to prepare is shown in the following box. professional skills. they want to understand how and how much income will be generated during the holding period. 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. Within the criterion “Market” venture philanthropy funds discuss the competition and peers of the social enterprise and certain characteristics of the target group. stakeholder support or innovation. Investors want to understand whether the product or service provided will change the relevant sector and help the target group. fund managers discuss around 50 different selection criteria.

8. 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. 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 .g. 18. parents. 5. 6. 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. 2. 12. 14. 3. 15. 10. 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. 19. 17. 4. 11. 9. 7.g. 13. 16.Box 02 For the due diligence process social entrepreneurs should prepare the following 20 questions: 1.

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

the social entrepreneur also needs to consider the worst-case scenario. However. . In the case of default or bankruptcy. The social entrepreneur should avoid any personal liabilities as well as too extensive debt to equity swaps.Secure the necessary entrepreneurial flexibility for the operations (voting rights only as far as necessary).Consider the consequences in case of default. the loan provider has far-reaching rights.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.Avoid any personal liability. 14 . Grace periods could be an attractive option for social enterprises. Box 03 The dos and don’ts of negotiating the financing terms: . .

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

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

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

debt capital and grant funding are . The buy-back arrangement implies that the social entrepreneur has sufficient funds to buy back the share of the social investor. The exit routes for equity capital. shown in the following figure. If the social enterprise defaults on the loan (e. 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.8 Exit Consideration In the chapter Negotiating the Financing Terms a few aspects related to exit considerations ed were already discussed. 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. In the case of debt capital.g.3. 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”). an initial public offering on a social stock exchange or the liquidation . (“financial flexibility” Social investor accepts equity in exchange for the loan (“debt to equity swap”) swap”). liquidation. Some social investor fund a significant Some share of the social enterprise’s operations and a exit can lead to funding issues. non non-repayment of the loan or long-term delay on scheduled payments). 18 . 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. there can either be a sale of the shares to a third party investor. there can either be a repayment of the loan or the refinancing of the loan. a buy-back arrangement. Social investor extends the period of the repayment schedule (“financial flexibility”).

An overview of those specialized loan providers can be found in chapter 6. Companies have access to a large capital pool and investors can sell their shares or bonds without delay at any time. A list of social investment advisors can be found in chapter 4. At the moment. three social stock exchanges with trading activities are being incorporated. In addition. Social investment funds apply the same principle in the social sector. Venture Philanthropy Funds Over the last 15 years high-net worth individuals and foundations have started to rethink their funding strategies. This new form of financing in the social sector is known as Venture Philanthropy. They also take deposits from savers and give loans to individuals and companies. 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. A social stock exchange can be an attractive financing option for social enterprises with a proven business model and significant financing needs. 19 . However. They began to adopt venture capital techniques for their funding strategies.4 Appendix 4. Social investment advisors take over the same role in the social sector. They collect funds from individuals or foundations which they invest in a given sector such as microfinance or the solar industry. 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. They support the social enterprise in setting up an appropriate financing structure and finding the right investors. On stock exchanges companies can issues shares or bonds which are then traded continuously. the savers sometimes accept a lower interest rate which can be passed on to the social enterprise. 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.1 Social Capital Markets Value Banks Value banks have the same role as commercial banks in the traditional capital markets. Social Stock Exchanges A stock exchange is an efficient public platform to match supply and demand.3 An overview of social stock exchanges can be found in chapter 4.9 ”Social Investment Advisory” on page 46.5 ”Value Banks” on page 39. This approach reduces the transaction costs and the risk through diversification effects. Social Investment Advisors The traditional role of investment banks is the financial advisory of corporate clients and the matching of supply and demand.11 “Social Stock Exchanges” on page 49.

6 "Social Investors with General Investment Focus” on page 27 as well as chapter 4. An overview of the social investors can be found in chapter 4.10 ”Funding Consultancies” on page 48. 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.7 “Social Investors with Focus on Microfinance” on page 37. Venture Philanthropy funds also support the social enterprise on a non-financial basis with management consulting or pro-bono services. social investors concentrate their funding and support only a limited number of social enterprises. they can support the social enterprise over a longer period of time and use tailored financing (also including grant funding). social investment funds and venture philanthropy funds are shown in the same overview. 20 . An overview of those consultancies can be found in chapter 4. Funding Consultancies Rating and research agencies publish ratings and research reports on publicly listed companies to support investors in their capital allocation decisions. In the social sector funding consultancies take over this role. They publish research reports on different sectors and advise funders which organizations to support. Therefore.

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

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

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

4. Profit & Loss (€) Half Year ended Sales EBIT Net Income Costs 2.4 Reporting Template Name of the Organization: [add the name of the organization] 1. Activity development over the period [add information on the key developments of the last reporting period] 4. Unfavorable development over the period (weaknesses) [add information of the failures and the areas which developed unfavorably] 6. 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. 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 . Favorable development over the period (strengths) [add information of the successes and the areas which developed favorably] 5. Comments and additional information on the social impact figures [add information about the development of the social impact figures] 7.

Business Model [add information about the business model including access to the target group and description of the target group] 3. Year of Foundation The organization was established in ______. 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 . Number of Employees ______ employees 5. Information about the Founder [add information about the founder and the idea that led to the foundation] 2. The headquarter is based in ______ 4. Streams of Revenues (including donations and governmental money) of the past 3 years 2008: US$ ______ 2009: US$ ______ 2010: US$ ______ 6.4.5 Investment Template Name of the Organization: [add the name of the organization] 1.

Chairman. role outside of social enteprise ______ ______.6. role within social enterprise 7. Use of Capital [add information on how the capital will be used] 11. role within social enterprise ______ ______. role outside of social enteprise ______ ______. Type of Investment you request (Loan or Equity) ______________ 26 . role outside of social enterprise ______ ______. Grants and Awards [add information on the grants and awards the social enterprise has received in the past] 9. Reporting System [add information on the specific reporting system you are using. Governance Structure Board of Directors / Advisory Board ______ ______.] 8. Executive Director ______ ______. Requested Amount of Money US$ ___ 10. role outside of social enterprise ______ ______. role outside of social enteprise Management ______ ______. 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.

Debt capital . .Support of young children from sociallydisadvantaged families 27 .com www. Suite 315 New York.mustoe@riantacapital. . Third Floor London W1J 5JA United Kingdom +44 20 7016 4300 anna.org Artha Initiative Leconfield House.arthaplatform.com Auridis Gruenstrasse 18 41460 Neuss Germany +49 2131 1511842 info@auridis.Equity capital .4. combined with large doses of business acumen.org www.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.de Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Small amounts of philanthropic capital. 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. NY 10011 United States of America +1 212 566-8821 mtada@acumenfund. which sustainably improve the life opportunities for socially disadvantaged children. Curzon Street.acumenfund. energy and livelihoods.Grants German-speaking countries and some international activities . can build thriving enterprises that serve vast numbers of the poor.Convertible grant India - Agriculture Cleantech Livelihoods Water Auridis invests globally in endeavours. with an emphasis on agriculture.Interest-free loans .

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. young people and the elderly .Children living in poverty in developing countries. and will be financially self-sustaining in the long term.org Charities Aid Foundation 7th Floor. .de www.bonventure.Employment and education . - Equity capital Mezzanine capital Debt capital Grants German-speaking countries .org www.Debt capital .org CAF Venturesome is a social investment fund that provides investment to help charities and social enterprises deliver on their mission. specifically HIV/AIDS.Grants Africa Asia Mid Americas . 18-20 St Andrew Street London EC4A 3AY United Kingdom +44 3000 123 300 venturesome@cafonline.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. The foundation seeks projects that are innovative with a strong social impact.Equity capital United Kingdom .org www. water. education. are led by motivated and committed social entrepreneurs. 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.No sector focus 28 . . St Andrew’s House.Ecological BonVenture Pettenkoferstrasse 37 D-80336 München Germany +49 89 2 00 01 2530 info@bonventure.venturesome.Children.Marginalized groups .ciff.

Services for the elderly Core Innovation Capital invests in the most innovative companies serving underbanked consumers.com Convivatus Social Capital provides uccessful social entrepreneurs the strategic and financial basis for sustainable growth.b foundation invests in and supports social entrepreneurs who identify commercial opportunities in social issues.No focus d.com - Debt capital Convertible loans Mezzanine finance Equity capital Convertible grant The Netherlands Africa .dobfoundation.Young people .Compatibility of family and work . . .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.corevc.Debt capital . NY 10012 United States of America +1 212 780 0193 info@corevc. Convivatus wants to be a catalyst for positive social change.com www.b Foundation IJsseldijk 1 8194 LA Veessen The Netherlands +31 578631111 info@dobfoundation. d.hinrichs@convivatus.nl www.convivatus. The foundation strives for a structural improvement of the wellbeing of people who are marginalized or living in poverty. 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.Mezzanine capital .com www.o.nl 29 . In this way.Equity capital German-speaking countries .o.Equity capital United States .Financial technology companies providing consumer finance products Core Innovation Capital 611 Broadway New York.

ferd.com Fondation Demeter 44.no www.com The EH Foundation’s goal is to be the partner of choice for both social entrepreneurs and social philanthropists in sourcing. - Grants Debt capital Equity capital Convertible debt Africa Asia . supporting and scaling innovative ideas that directly and positively impact the lives of the world’s most impoverished people.org Ferd Social Entrepreneurs P.Microfinance 30 .theehfoundation.org www.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 .“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.Box 34 1324 Lysaker Norway +47 67 10 80 50 / +47 957 21 740 kgl@ferd.Grants Worldwide .O.Interest-free loans . - Grants Guarantees Convertible loan Equity capital Convertible grants Norway .Children and young people .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. rue Vaneau 75007 Paris France +33 14548 8856 contact@ fondationdemeter.

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

Poverty reduction Impetus Trust 20 Flaxman Terrace London WC1H 9PN United Kingdom +44 203 3843940 info@impetus.lgt.Relief of human suffering .org.Debt capital .inspiringscotland.org.Creation of sustainable livelihoods 32 .org.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 . Impetus achieves this through its highly effective model of venture philanthropy which has three key components: unrestricted strategic funding.Grants .impetus. 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.uk www.Education .org. very hands-on support from the Impetus investment team and specialist support for capacity building.uk LGT Venture Philanthropy Städtle 28 9490 Vaduz Principality of Liechtenstein +41 44250 8281 lgt.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.Grant Scotland .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.Youth Inspiring Scotland Riverside House 502 Gorgie Road Edinburgh EH11 3AF United Kingdom +44 131 442 8760 enquiries@ inspiringscotland. .Grants United Kingdom . .Children .vp@lgt.com www.Equity capital Africa China India Southeast Asia Latin America .uk www.

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

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

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

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

asnbank.Debt capital Worldwide .com Dual Return Fund Absolute Portfolio Management Wallnerstraße 3 / 17 1010 Vienna Austria +43 1 533 59 76 info@visionmicrofinance. small and medium enterprises in emerging and least developed economies. The fund maximizes both the risk-return profile to benefit the investor and the social outreachin breadth and depth to micro.com The Dual Return Fund has a double bottom line strategy.Microfinance institutions 37 .4.com www.blueorchard.nl The ASN-Novib Fund aims to promote a broad participation of all groups in the market economy of developing countries. .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. .Debt capital .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 www.Microfinance institutions Dexia Microcredit Fund 32 Rue Malatrex 1201Genève Switzerland +41 22 596 4777 info@blueorchard.Guarantees .visionmicrofinance. To achieve this. the fund makes capital available to financial institutions providing credit to clients with economic opportunities but limited access to financial services .Debt capital Africa Asia Central and Eastern Europe Latin America .Equity capital .

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.Grants Worldwide .Microfinance institutions European Fund for Southeast Europe Eschersheimer Landstr.org 38 . . churches and others to share their resources through socially responsible investments and by empowering disadvantaged people with credit. rue Vaneau 75007 Paris France +33 14548 8856 pascal@ceresfinance. Box 2136 3800 CC Amersfoort Netherlands +31 33422 4040 info@oikocredit.Equity capital development finance.efse. promotes global justice by challenging people.oikocredit. as a worldwide cooperative society.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 . 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 . 6 60322 Frankfurt am Main Germany +49 69 9778765026 s.O.Children and young people .Interest-free loans .org www.com www.Debt capital through the sustainable provision of additional .Microfinance institutions Oikocredit P.Microfinance Fondation Demeter 44.com Oikocredit.Debt capital Africa Asia Europe Latin America .

.Equity capital Worldwide . The Omidyars gave the university $100 million to create a fund that would be invested entirely in international microfinance initiatives.edu/microfinancefund responsAbility provides commercial finance to organizations that give people at the base of the pyramid access to services.com www.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.Debt capital . .tufts.edu www.Microfinance institution . .Microfinance institutions SNS Institutional Microfinance Fund Pettelaarpark 120 5216 PT 's-Hertogenbosch The Netherlands +31 73683 3355 www.Debt capital Africa Eastern Europe Latin America Southeast Asia .Equity capital Worldwide . The fund does not grant loans to individual businesses but lends money to or invests in the share capital of microfinance institutions.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. markets.nl Table 3: List of social investors Source: Websites 39 .Microfinance institutions Omidyar-Tufts Microfinance Fund microfinance@tufts.Equity capital .Fair trade producers . investing in these ideas directly or indirectly.snsam.responsability. innovative business models in developing countries and emerging markets.Small and mediumsized enterprises in developing countries responsAbilitySocial Investments Josefstrasse 59 8005 Zurich Switzerland +41 44250 9930 info@responsAbility. products and information.Debt capital . responsAbility is constantly searching for entrepreneurial.

driven by the common desire of a more transparent and responsible management of financial resources. inspired by the values of a sustainable social and human development. . Italy .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.bas.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. ABS gives encouragement to the Swiss banking and financial markets.Organic agriculture.Organizations operating within the third-sector that carry out civil society oriented economic projects BancaPopolareEtica Via NiccolòTommaseo 7 35131 Padova Italy +39 498771111 www.4.Social or ecological housing .bancaetica.Renewable energy Alternative Bank Schweiz Amthausquai 21 4601 Olten Switzerland +41 62 206 16 16 contact@abs. Switzerland . may meet socioeconomic initiatives.ch www. As the leading provider of ethical banking services and a pioneer in the implementation of social and environmental standards.it 40 .

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

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

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

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

Mongolia . People. Global Alliance for Banking on Values 45 . The Bank will provide equitable access to transparent. including its traditional Microentrepreneurs as well as Small and Medium businesses. reliable and responsive banking products and services to the Bank's clients.Box-46/721 Ulaanbaatar – 14200 Mongolia +97611 318185 www.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.Environment Table 4: Value Banks Source: Websites.Education .xacbank. and Profit.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details XacBank Prime Minister Amar's Street Sukhbaatar district P.O.

We assist our clients distinctive and sustainable values across the globe.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. We achieve this by promoting appropriate finance for the growth of enterprises which are having a direct positive impact on society. 32 rue de Malatrex 1201 Geneva Switzerland +41 22 596 4750 info@bamboofinance.avant-gardist.r.Services for low income communities by providing access to affordable housing. banks and nonprofits increase their social impact. corporations. sanitation and the like Bamboo Finance S. education. VA 22209 United States of America +1 703 600 8324 info@lightyearsip.lightyearsip.à. 46 . healthcare. trademarks and licenses) to secure more sustained and higher export income.com avant-gardist identifies.com www.com www. design and implement social projects that help foundations.com Light Years IP 1700 N Moore St. Global . livelihood opportunities.l.4.IP tools (patents.bamboofinance. We leverage our client’s expertise and and insights to benefit society and sharpen their competitive advantage Global . energy.net www. Developing countries . Suite 1610 Arlington.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.No Sector focus Bamboo Finance’s mission is to create value for our investors. water. partners and the field of social entrepreneurship.

uk www.totalimpactadvisors. 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.com www. With our deep roots in banking. development. public policy and private investment.com Source: Websites 47 ." Table 5: Social Investment Advisory Global .uk Total Impact Advisor's mission is to advise both entrepreneurs and those seeking to maximize the social impact of their capital.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. Social Finance believe that. UK . 5th floor Cambridge.org. Latin America Africa .Social Investment Advisory with short Mission Statement Geographical Focus Main Sector Focus Contact Details Root Capital 955 Massachusetts Ave.Small grassroots businesses Many charities and social enterprises face serious financial challenges that stop them from carrying out their work effectively.No Sector focus Social Finance Ltd 131-151 Great Titchfield Street London. Our role is to devise the financial structures and raise the capital to enable this to happen.org www.org. innovation. W1W 5BB United Kingdom +44 207 667 6370 info@socialfinance.socialfinance.rootcapital. organisations seeking to solve them need sustainable revenues and investment to innovate and grow.No Sector focus Total Impact Advisors mbrownrigg@ totalimpactadvisors.

Using our unique.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. Table 6: Funding Consultancies .org Phineo Anna-Louisa-Karsch-Straße 2 10178 Berlin Germany +49 30 520065400 info@phineo. multistage analysis process.No Focus Germany PHINEO’s mission is to strengthen the nonprofit sector and civil society.org www. .Global . so that more lives can be changed for the better. 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.org www.No Focus Source: Websites 48 .phineo.4. we build bridges between social investors and nonprofit organizations.UK .

The Social Stock Exchange is designed to provide access to capital – specifically risk capital – for organisations that are for-profit social purpose businesses.4.11 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.No trading yet NExt SSE is a project committed to bringing capital to social ventures .com www. leisure. housing. In the months to come.No trading yet Pradeep Jethi.asiaiix. allowing them to more rapidly expand the impact of their activities. ethical or Berlin ecological focus and a sound business model. green. and clean. Table 7: Social Stock Exchanges . legal requirements for establishing a 'real' exchange are being clarified in collaboration with BaFin (the German federal financial supervisory agency).organisations with a social.com www.nextsse.com Source: Websites.and ethical consumerism.com NExT SSE c/o KonvergentaInterZero GmbH Rungestr.com Impact Investment Exchange Asia aims to provide Social Enterprises in Asia with greater access to capital. most likely to be from sectors that create social value such as health. transport. 19 10179 Berlin Germany +49 30 6098810 10 info@nextsse.No trading yet London .and green-technology. CEO: pjethi@gmail. Singapore . Personal information 49 .

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. Japhet Heartlines .

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 .

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

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

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