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A Guide for Social Entrepreneurs
Developed by Social Investment Task Force
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
Posted: 18 May 2011 Last Revised: 10 June 2011
The Social Investment Manual will be revised regularly and the most recent version can be found at http://www.schwabfound.org/pdf/schwabfound/SocialInvestmentManual.pdf. * Please see page 51 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 email@example.com and firstname.lastname@example.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.
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 4 6 7 8 8 10 11 12 14 16 17 19 20 20 22 23 25 26 28 38 41 47 49 50 51 53 54
Task Force Members
The basis for this manual was laid at a Schwab Foundation for Social Entrepreneurship gathering during the World Economic Forum‘s Annual Meeting of New Champions in Tianjin (China) in September 2010. The Schwab Foundation for Social Entrepreneurship comprises of nearly 200 of the world`s leading social entrepreneurs, who represent the voice of social innovation of the World Economic Forum. Thirty social entrepreneurs in the Schwab Foundation community came together in Tiajin in September 2010 from around the world to share their current challenges and to discuss how these challenges could be addressed together. Subsequently, several task forces were formed by Schwab Foundation social entrepreneurs to address these common challenges. The task force on social investment quickly caught the interest of further members within the Schwab Foundation community. The Schwab Foundation recognizes social enterprises span the spectrum of financial models, including grant based organizations to revenue generating organizations, which can not only be financially self-sustainable but also can be profitable. The social enterprises in the Schwab community are classified by one of three business models (leveraged non-profits, hybrid nonprofits and social businesses). The majority of social entrepreneurs within the Schwab Foundation community (70%) either has a hybrid non-profit or a social business model. Social enterprises with these two business models benefit from pursuing different debt and equity structures to expand their impact, and are the primary audience of this manual. The entrepreneurs who participated in the social investment task force had varied and often extensive experience with social investors. Some had conducted long negotiations with social entrepreneurs, learning through trial and error about how best to work with social investors. 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 social investors to exchange experiences, few, there was little knowledge-sharing among social entrepreneurs. The task force set out to reconcile this through the creation of this manual. Social investment can offer entrepreneurs the chance to scale up their impact tremendously, but it can also lead to unintended consequences, such as a change in strategic direction, a divergence from the original values and mission of the enterprise, a distancing from direct engagement with the community it is serving, or a loss of control over the organizational culture. Given this, the need for a manual is ever more important for social entrepreneurs. 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. It is our hope that social entrepreneurs will embrace both the challenges and opportunities represented by the social investment space, and will use this guide as a launching point. Given the rapid evolution of this field, the task force welcomes continuous feedback and insights from entrepreneurs to incorporate in the guidebook.
Mirjam Schöning Head Schwab Foundation for Social Entrepreneurship Abigail Noble Regional Head for Latin America and Africa Schwab Foundation for Social Entrepreneurship 5 .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 Professor AnnKristin Achleitner and Wolfgang Spiess-Knafl at the Technical University Munich for their invaluable support in putting this manual together.
Social entrepreneurs complain that there is little understanding of the definition of ―social impact‖ and there is often financial over-engineering. represents a real alternative to government subsidies or donations. Social Investment. As the field of social enterprise has gained credibility and therefore scale. 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. that of having a mutually compatible approach for social entrepreneurs and social investors. 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. and often. It is written from the perspective of social entrepreneurs. as this form of financing is often called. Two completely different worlds collide — one where planning and structure is all-important and one where there is apparently a lack of management expertise. better understanding of the social investment space is needed on both ends. This manual strives to address this challenge. This document is by no means a scientific treatise on social investment. Second. Social entrepreneurs have already sought out to address the most pressing problems facing societies today.1 Introduction Philanthropic donations were the major. sometimes running in years. Paradoxically. if not the only source of funds for a growing social enterprise. The authors of this manual believe the problem is one of information and understanding. The duration of expression of interest until the conclusion of an investment agreement is inordinately long. rigorous and mutually agreed upon metrics that will facilitate the social investment transactions and deal flow are imperative. However. and investors in this sector often lack on-ground knowledge. First. The best of intentions on both sides cannot prevent deals from failing. vague and uncertain planning perspectives. nor is it an abstract idea. funding sources that can ensure not only the financial sustainability but also the growth in impact of social enterprises have increased both in terms of number of funders and size of financing. while successful social entrepreneurs with proven track records face a chronic lack of capital. it is not a simple market inefficiency or matching problem that must be solved. to help them engage better with those who deal with social investment support. investors seeking to make both a financial and social return often feel the options are limited. to help shorten times to assess expectations and prepare a mutually relevant frame. 6 . a lack of regular cash flow.
The institutions in the social sector and their equivalent in the traditional capital markets are shown in the following figure. Figure 1 Social Capital Markets Source: Achleitner & Spiess-Knafl (in press) Each institution focuses on a specific segment of the social sector. 7 . value banks provide loans to social enterprises with a low risk profile to minimize the default rate. In addition to the above financing institutions.2 Social Investment Landscape There has been an increased effort in recent years by social entrepreneurs to overcome the challenges of the traditional donation-based philanthropy model through social investment opportunities. For example. To facilitate this. ensuring the deposits of its savers. Please see appendix on page 20 for an overview of this sector. Social stock exchanges could pose an attractive funding source for mature social enterprises with proven business models and significant capital needs. institutions comparable to traditional capital market institutions have been set up in the social sector to reduce the transaction costs and to help allocate capital more efficiently. there are also institutions which advise social enterprises and funders on how to structure an investment. Venture philanthropy funds provide capital for younger and more innovative enterprises.
the social entrepreneur should consider first which financing instruments are suitable and then which social investors support the strategy and social mission of the social enterprise. Spiess-Knafl & Volk (2011) Those financing instruments are described in the following table as well as in more detail in chapter 4.3. 3. social entrepreneurs should ask themselves the following questions (see also Figure 2 below): Can we set aside capital that would allow us to repay in a few years any financing received? In thinking about ways our organization might grow. 5% interest) through-out the course of the financing? Classification of available financing instruments Figure 2 Illustration based on Achleitner.g.3 The Financing Process The complete financing process includes the following steps: Finding the appropriate financing instrument Finding the right social investor Approaching the social investor Screening and due diligence process Negotiating the financing terms Working with the investor including performance measurement Exit of the investment Before approaching a social investor. 8 . can we take on capital that requires annual interest or dividend payments (e.1 Available Financing Instruments When determining the right financing instrument.
Usually restricted use for predefined projects .High fundraising costs .Financing Instrument Term Sheet Duration: Short term Implications for Social Enterprise .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 payments 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 9 .
A social investor might only finance a proven business model while others finance individuals with a promising concept for a social enterprise. thereby deepening their expertise and allowing them to transfer knowledge among the social enterprises.2 Finding the Right Investor When determining whether a prospective investor is the right fit for your social enterprise. However. the financing terms and the investment stage do offer room for negotiation. the geographic focus and the sector focus tend to be important on the part of the investor.3. and are usually strict criteria. The social entrepreneur also has to consider if the social investor shares the same values and has a similar mission.000. Figure 3 Investment fit Source: Own illustration Many social investors concentrate their funding on a particular sector or geographic region. 10 . During the first meeting with the social investor or a discussion with other investees. The questions in the below figure are designed to help the social entrepreneur make the decision on whether the social investor is the right fit. This ―proof of concept‖ is usually not negotiable. this can be gauged. For this reason.000 social investors can syndicate the investment (simultaneous investment of two or more investors). making it difficult to come to an agreement when the social enterprise is at a different business model stage than the social investor`s usual focus. In the case of significant capital needs exceeding a limit of ~$1. The different investment stages are: Seed Early Stage / Start-Up Later Stage / Mature Investors tend to be focused on a specific investment stage. the social entrepreneur should consider both formal and informal criteria.
Tell us about your experience and knowledge working with the market that you'd like to serve. In addition to meeting the investors. in order to find the best investment prospect. it is easy to make initial contact with investors and their websites offer information on how to contact the fund managers.What is the primary product or service you provide? .1 In the appendix on page 26 there is an investment template on how to prepare the relevant information.3. For this reason.Many well-intentioned ideas to help the poor are not sustainable and do not appropriately address market barriers to success. mission. 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 way to meet social investors is through social investment conferences.3 Approaching the Social Investor Social investors screen and analyze as many social investment opportunities as possible.Geography . 1 Also see page 45 for a list of social investment advisors. How are you uniquely qualified and positioned to take on this endeavor? . and goals. social entrepreneurs can also speak with other investees of the social investor or social investment advisors which can provide a good overview of the activities of the different social investors. 11 .Tell us about your team. What have your experiences been in testing your product in the target market and how has this positioned you to grow from here? .Size .org addressing the following topics: . This template structures the relevant information and reduces the time spent for further inquiries. On this page Acumen Fund describes the formal criteria such as: .Sector .How is the product or service relevant to impacting the lives of the base of the pyramid? .Stage If the social entrepreneur meets these criteria he is asked to send his business plan to businessplans@acumenfund. Box 01 Acumen Fund has a link on its website “Business Plan Submission” with all relevant information.
Important to the overall assessment of the social entrepreneur are his or her commitment to the concept. creativity. The aspects can be generally divided into five groups which are strategic skills. and previous track record of success. Investors want to understand whether the product or service provided will change the relevant sector and help the target group. For this. attitude and development potential.3. Fund managers discuss different aspects of the ―Social Entrepreneur‖. fund managers discuss around 50 different selection criteria. stakeholder support or innovation. Reach is the percentage of the market covered with the ―concept‖. According to Heister (2010) the criteria 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. ―Financials‖ is highly relevant for funds which expect interest payments and/or a future repayment. 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. Fund managers analyze the business model as well as capital requirements in order to understand how and how much income will be generated during the holding period. professional skills.4 Screening and Due Diligence Process Social investors may analyze several hundred social enterprises per year and use a multi-stage selection process through which only a few make it to the final rounds. creativeness in achieving the social impact or reaching the market. Relevant questions could include aspects such as access to the target group. A sample of questions to prepare is shown in the following box. fund managers want to understand the potential market size to better evaluate future growth strategies and therefore investment . ―Market‖ discusses the competition and peers of the social enterprise as well as the characteristics of the target group. 12 . ―Social Impact‖ refers to both the scalability and reach of the business model. empowerment strategies. Within this selection process.
10. 8. 2.Box 02 For the due diligence process social entrepreneurs should prepare the following 20 questions: 1. parents. 17. 6. 11. 5. Is it a new concept? Are there existing or competing offers for the target group? What is the difference to 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. 13.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. 9. 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? 13 . 14. 18. 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. 4. 19. 7. 16. 20. 12.g. 3. 15.
g 0%) to market rate return (e.000 after setting up a second location). In addition.5 Negotiating the Financing Terms Once the due diligence finishes positively. The financial return can be realized through an increase of the value of the social enterprise as well as through dividend payments. In the case of an equity investment. Debt capital (loan) A loan is attractive if the social enterprise has access to stable and predictable cash flows.g. Equity capital An equity investment gives the social investor a share of the company and the future profits.g. about 7% in Western Europe) and depends upon the financial return expectations of the social investor. The interest rate can range from interest-free (e. and whether the investment is based on nominal or market values. The financing terms differ between debt capital (loan) and equity capital (ownership stake).000 at the start and $250. In some cases the social investor provides the financing in separate tranches after the completion of certain milestones (e. the social entrepreneur should address the issue of control and voting rights.2 Social investors and social entrepreneurs should discuss what kind of financial return they can expect. the social entrepreneur should maintain the necessary rights for flexible and entrepreneurial decisionmaking authority for the social enterprise. (see more details on page 19). the repayment should also be based on nominal values. the social investor and the social entrepreneur can 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. In the case of nominal values. $250. While the investor should be able to influence decisions in the company. Lastly. In such cases it is important that the social entrepreneur can buy back the 10% of the equity at nominal value. social entrepreneurs and social investors should discuss the potential options for the investors future exit strategy. the valuation of the social enterprise is key. the social entrepreneur has to negotiate the following terms: Valuation of the social enterprise Dividend payments Exit / repayment In the case of equity investments.3. 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. 14 .
15 .Consider the consequences in case of default. In a popular model the social entrepreneur starts to repay the loan (the principal) after two years. the social entrepreneur should avoid taking on personal liabilities for the social enterprise or negotiating extensive debt to equity swaps in case of default. For this reason. In the case of default or bankruptcy.Avoid any personal liability. Grace periods can be an attractive option for social enterprises. However. the loan provider`s rights to be repaid might take precedence over the social entrepreneurs rights. Another option is the complete refinancing at the end of the loan period. 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. the social entrepreneur must plan for both interest payments during the term of the loanand the loan repayment after the loan term has ended. . The social enterprise should also negotiate the interest payment and principal repayment schedule in case of distress to secure the necessary financial flexibility. Box 03 The dos and don’ts of negotiating the financing terms: .Secure the necessary entrepreneurial flexibility for the operations (voting rights only as far as necessary). . the social entrepreneur must consider the worst-case scenario.In some cases.
3. the social entrepreneur would be wise to set up a working relationship with the social investor. a very important element is the inter-personal relationship between investee and investor. (2008) conducted a study on minority investments of private equity funds in family firms. reporting. . controlling and corporate finance but have limited knowledge of the core activities of the company such as delivering the social services to the target group. The advisory board can strengthen the the quality of the entrepreneurial decisions and the accountability of the management by asking tough questions about current practices and suggesting new policies. controlling. Similar to social enterprises. Therefore. each of which work in different settings.6 Working with Investors After working out the details of the investment deal. As it is described in Box 04. family firms also have multiple goals. reporting and corporate finance. the set-up of an advisory board is not recommendable.The management particularly appreciates the role of the advisory board as sparring partner. procedures or approaches. . Creating an advisory board is both a practical way to involve the social investor in the operations and to give the social investor voting and control rights (e. Given the many potential conflicts around alignment of the social mission. profit distribution and future development of the enterprise. Some of the key findings were: . In those cases an advisory board on a company level would be difficult to manage due to the complexity of the relationships. For this reason.Family firms always install an advisory board (if not existing already) after the investment. the social entrepreneur should first be certain that he or she wants to have the social investor as thought partner before including him or her into a key decision–making role. Social investors tend to have extensive knowledge about corporate governance. representatives of the shareholders as well as independent experts which can either contribute expertise from the social or the business sector. The members of the advisory board usually include representatives of the social enterprise. 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 advisory board was kept in place even after the exit of the 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 family firms benefit from the investors’ support in corporate governance. In some cases. Some social enterprises have operations across countries with different funders. Interestingly.g.A clear common understanding concerning the profit distribution is necessary to minimize the risk of conflicts of interest. Box 04 Achleitner et al. a close personal interaction would be a better alternative. the social entrepreneur should adjust his or her expectations and use the existing skill sets and network of the social investor. 16 .
riseproject. For the afterschool program.g. (2004) have described outputs and outcomes as follows: “The key notion of the Impact Value Chain is to differentiate outputs from outcomes. nonprofit or project manager can measure or assess directly. (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. 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. volunteering or money). for example.” Although the impact value chain is a clear concept.7 Performance Measurement Performance measurement enables the social investor to control and monitor the work of the social entrepreneur.org/ DBL_Methods_Catalog. could include the number of children participating in the program. The main questions are shown in the following figure.pdf.3. 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. desired outcomes could include higher self-esteem for participants or higher educational achievement for participants. al (2004) and Roder (2010) Input are those ressources which are put directly into the venture (e.Outputs are results that a company. there is not yet a performance measurement method which is globally accepted and applicable. the percent that drop out. Outcomes are the ultimate changes that one is trying to make in the world. Clark et al.) Performance measurement methods have similar information requirements as financial analysis that assesses the valuation or the credit rating of a company. Those methods require 17 . and the percent that re-enroll the following year. Outputs for an after-school program. assets.
guarantee that companies are reporting on a comparable basis.Product impact (indicators that describe the performance and reach of the organization's products and services) .Operational impact (indicators that describe the organization’s policies.thegiin. operational model. employees. there is a reporting template which can be used for the reporting to the social investor. The IRIS framework consists of six parts: .Product description (indicators that describe the organization’s products and services and target markets) . From the social entrepreneur‘s perspective.de.Financial performance (commonly reported financial indicators) . reporting requires at first additional efforts and costs. 18 . The Impact Reporting & Investment Standards (IRIS) developed in the United States is described in Box 05).social-reporting-standard.Organization description (indicators that focus on the organization’s mission. Yet there is no globally accepted standard. yet generates long term benefits. It allows the social entrepreneur to track results. and environmental performance) . B Lab and Rockefeller Foundation to create a common framework for defining and reporting the performance of impact capital. and location) .org/iris-standards) In the appendix on page 25. such as the International Financial Reporting Standards (IFRS) or the United States Generally Accepted Accounting Principles (US-GAAP). The traditional capital markets standards. Standards addressing the characteristics of social enterprises have been developed.solid and comparable information. Box 05 The Impact Reporting & Investment Standards (IRIS) was founded by Acumen Fund.Glossary (definitions for common terms that are referenced in the indicators) (taken from http://iris. (Two popular standards: The Social Reporting Standard (SRS) developed in Germany can be seen at www. to improve processes and to have a better documentation of the successes of the social enterprise.
8 Exit Consideration In the chapter Negotiating the Financing Terms a few aspects related to exit considerations were discussed. Grant funding also presents several exit considerations. there are several exit strategies. Figure 5 Exit considerations Illustration based on Achleitner & Spiess-Knafl (in press) In the case of equity capital. the same or another social investor must be willing to finance the social investor for the next period. Social investor accepts equity in exchange for the loan (―debt to equity swap‖). non-repayment of the loan or long-term delay on scheduled payments). and grant funding are shown in the following figure. After this time.3. 19 . If the social entrepreneur pursues refinancing. A social investor can fund 10% of the total budget or take over part of the overhead costs for a given period of time. social entrepreneurs can either repay the loan or refinance the loan.g. the parties can issue an initial public offering on a social stock exchange or can liquidate the ownership. the social entrepreneur can buy back equity from the investor. there are three scenarios: Social investor institutes bankruptcy proceedings to recover part of the loan (―liquidation‖). the social enterprise either needs to secure follow-up financing or should have reached financial self-sustainability. If the social enterprise defaults on the loan (e. The exit routes for equity capital. The buy-back arrangement implies that the social entrepreneur has sufficient funds to buy back the share of the social investor. There can be a sale of the shares to a third party investor. Social investor extends the period of the repayment schedule (―financial flexibility‖). debt capital. In the case of debt capital.
They support the social enterprise in setting up an appropriate financing structure and finding the right investors. At the moment. This new form of financing in the social sector is known as Venture Philanthropy. They began to adopt venture capital techniques for their funding strategies. three social stock exchanges with trading activities are being incorporated. A list of social investment advisors can be found in chapter 4. Venture Philanthropy Funds Over the last 15 years high-net worth individuals and foundations have started to rethink their funding strategies. Social Stock Exchanges A stock exchange is an efficient public platform to match supply and demand. Social investment advisors take over the same role in the social sector.9 ‖Social Investment Advisory‖ on page 47. Social investment funds apply the same principle in the social sector.5 ‖Value Banks‖ on page 40.3 An overview of social stock exchanges can be found in chapter 4. 20 . This approach reduces the transaction costs and the risk through diversification effects. They collect funds from individuals or foundations which they invest in a given sector such as microfinance or the solar industry. they have a better understanding of the business models and the specific needs and requirements of social enterprises. They 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. 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. the savers sometimes accept a lower interest rate which can be passed on to the social enterprise. On stock exchanges companies can issues shares or bonds which are then traded continuously. In addition.11 ―Social Stock Exchanges‖ on page 50.4 Appendix 4.1 Social Capital Markets Value Banks Value banks have the same role as commercial banks in traditional capital markets. Since Value Banks focus on the social sector. Companies have access to a large capital pool and investors can sell their shares or bonds without delay at any time. High Engagement Philanthropy or Social Venture Capital John (2006) defines this approach as having the following characteristics: 3 Due to strict regulatory requirements it is not yet clear if and when the first social stock exchange will start trading.
10 ‖Funding Consultancies‖ on page 49.7 ―Social Investors with Focus on Microfinance‖ on page 38. social investors concentrate their funding and support only a limited number of social enterprises. 21 . An overview of the social investors can be found in chapter 4.- High engagement Tailored financing Multi-year support Non-financial support Organisational capacity-building Performance measurement Thus. They publish research reports on different sectors and advise funders on which organizations to support. social investment funds and venture philanthropy funds are shown in the same overview. Due to their similarities. Therefore. they can support the social enterprise over a longer period of time and use tailored financing (also including grant funding). 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 play this role. An overview of those consultancies can be found in chapter 4. Venture Philanthropy funds also support the social enterprise on a non-financial basis with management consulting or pro-bono services.6 "Social Investors with General Investment Focus‖ on page 28 as well as chapter 4.
External financing is either used to cover negative operating cash flows or to finance longterm investments such as buildings.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 public authorities. The different financing sources and instruments are shown in the following figure. equipment or infrastructure. Figure 6 Classification of the financing structure Source: Achleitner. Spiess-Knafl & Volk (2011) 22 .4. The service is either paid by the target group.
10% of total shareholdings). 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. Furthermore. hybrid capital contains elements of grants. Debt capital is provided on a temporary basis and requires the repayment after a few years.g. Control and voting rights depend upon the legal form of the enterprise and are usually structured in the contract between investor and investee. Equity Capital Equity capital is the financing instrument with the highest risk for the investor. The stable and predictable cash flows are necessary as the debt capital providers receive an annual interest payment. Financing instruments with hybrid capital character include: Recoverable grants Forgivable loans Convertible grants Revenue share agreements 23 .4. there are some shortcomings related to grants. Normally. Hybrid Capital As illustrated in figure 4. Despite their importance. The social investor receives no regular annual payments but a share of the profits generated by the social enterprise. The social investors gives the social enterprise a certain sum in exchange for a share of the company (e. 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. The structuring flexibility makes mezzanine capital an attractive option for social entrepreneurs as well as social investors. 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. Besides a share of the future profits. 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).7 years. not predictable and impose high fundraising costs on the social enterprises. 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. the social investor has certain control and voting rights. the loans are provided for 5 . Grants are usually provided by foundations or individuals and continue to be an important funding source for social enterprises. grants are usually short-term oriented.
24 . This mechanism can be used if success of the project enables the social enterprise to repay the loan to the social investor. the following table shows the description and implications of the different financing instruments. This risk sharing model can be used for the repayment of the financing and gives the social enterprises financial flexibility. If the social enterprise reaches the goals agreed beforehand between investor and investee the loan does not to be repaid. A convertible grant is another financing instrument with hybrid capital character.A recoverable grant is a loan which must be paid back only if the project reaches certain previously defined milestones. A forgivable loan is a loan which is converted into a grant in the case of success. If the milestones are not reached the recoverable grant is converted into a grant. The social investor provides the enterprise with a grant which is converted into equity in the case of success. Figure 7 Financing instruments Source: Achleitner et al. Revenue share agreements are financing instruments where the investor finances a project and receives a share of the future revenues. (2011) To conclude.
Comments and additional information on the social impact figures [add information about the development of the social impact figures] 7.4 Reporting Template Name of the Organization: [add the name of the organization] 1. Key targets for the next Half Year [add information on the key targets for the next reporting period] ____ ____ ____ ____ ____ ____ ____ ____ ____ Revised annual budget ____ ____ ____ ____ dd/mm/yyyy 25 . Activity development over the period [add information on the key developments of the last reporting period] 4. Reasons if the annual budget has been amended [add information why the budget has been changed over the reporting period] 8. 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. 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.
Business Model [add information about the business model including access to the target group and description of the target group] 3. 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] 26 .5 Investment Template Name of the Organization: [add the name of the organization] 1. Number of Employees ______ employees 5. Year of Foundation The organization was established in ______. The headquarter is based in ______ 4.4. Streams of Revenues (including donations and governmental money) of the past 3 years 2008: US$ ______ 2009: US$ ______ 2010: US$ ______ 6.
role outside of social enterprise ______ ______. role outside of social enteprise Management ______ ______. Use of Capital [add information on how the capital will be used] 11. Requested Amount of Money US$ ___ 10. role outside of social enterprise ______ ______. Executive Director ______ ______. role within social enterprise 7. 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. Governance Structure Board of Directors / Advisory Board ______ ______.6. Type of Investment you request (Loan or Equity) ______________ 27 . role within social enterprise ______ ______. Chairman. role outside of social enteprise ______ ______.] 8. 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. role outside of social enteprise ______ ______.
de Acumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. combined with large doses of business acumen. .org Artha Initiative Leconfield House.Debt capital . NY 10011 United States of America +1 212 566-8821 mtada@acumenfund. energy and livelihoods.org www. with an emphasis on agriculture.acumenfund.Convertible grant India - Agriculture Cleantech Livelihoods Water Auridis invests globally in endeavours.com www.Equity capital .com Auridis Gruenstrasse 18 41460 Neuss Germany +49 2131 1511842 email@example.com@riantacapital. 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. Curzon Street.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.4.Grants German-speaking countries and some international activities . which sustainably improve the life opportunities for socially disadvantaged children. .Interest-free loans . Small amounts of philanthropic capital. Suite 315 New York.Support of young children from sociallydisadvantaged families 28 . can build thriving enterprises that serve vast numbers of the poor. Third Floor London W1J 5JA United Kingdom +44 20 7016 4300 anna.
No sector focus 29 .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.Grants Africa Asia Mid Americas . specifically HIV/AIDS.ciff.Ecological BonVenture Pettenkoferstrasse 37 D-80336 München Germany +49 89 2 00 01 2530 info@bonventure. are led by motivated and committed social entrepreneurs. 18-20 St Andrew Street London EC4A 3AY United Kingdom +44 3000 123 300 venturesome@cafonline. education.de www.Marginalized groups .Children living in poverty in developing countries. water.Debt capital .org Charities Aid Foundation 7th Floor. young people and the elderly .venturesome.org www.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. 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.Equity capital United Kingdom . - Equity capital Mezzanine capital Debt capital Grants German-speaking countries .Children. .org CAF Venturesome is a social investment fund that provides investment to help charities and social enterprises deliver on their mission. . The foundation seeks projects that are innovative with a strong social impact. St Andrew‘s House.org www.bonventure. and will be financially self-sustaining in the long term.
convivatus.com - Debt capital Convertible loans Mezzanine finance Equity capital Convertible grant The Netherlands Africa .b Foundation IJsseldijk 1 8194 LA Veessen The Netherlands +31 578631111 info@dobfoundation. NY 10012 United States of America +1 212 780 0193 firstname.lastname@example.org.Compatibility of family and work .No focus d. Convivatus wants to be a catalyst for positive social change. 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.corevc.Equity capital United States .com www.com www.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. .Debt capital .com Convivatus Social Capital provides uccessful social entrepreneurs the strategic and financial basis for sustainable growth.Equity capital German-speaking countries . d. .b foundation invests in and supports social entrepreneurs who identify commercial opportunities in social issues.Young people .Financial technology companies providing consumer finance products Core Innovation Capital 611 Broadway New York.o. 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 .nl www. In this way.nl 30 .hinrichs@convivatus.
rue Vaneau 75007 Paris France +33 14548 8856 contact@ fondationdemeter.―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.O.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 email@example.com Fondation Demeter 44. - Grants Guarantees Convertible loan Equity capital Convertible grants Norway . - Grants Debt capital Equity capital Convertible debt Africa Asia .org www.Microfinance 31 . supporting and scaling innovative ideas that directly and positively impact the lives of the world‘s most impoverished people.no www.theehfoundation.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 .Box 34 1324 Lysaker Norway +47 67 10 80 50 / +47 957 21 740 kgl@ferd.Interest-free loans .org Ferd Social Entrepreneurs P.com The EH Foundation’s goal is to be the partner of choice for both social entrepreneurs and social philanthropists in sourcing.ferd.Grants Worldwide .
Children and young people The Ford Foundation is an independent.mx 32 .Base of the Pyramid IGNIA Partners.org www. Ricardo Margáin 575 Parque Corporativo Santa Engracia San Pedro Garza García. N.Y. contribute to society.Equity capital Latin America . The fund aims to give all people the opportunity to reach their full potential. N.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Fondazione Oliver Twist Onlus Via Bigli.org Fondazione Oliver Twist Onlus operates in the social field by setting up and supporting projects designed to help minors in difficult circumstances . By providing effective responses to the enormously underserved needs of low income populations. .ignia. both as consumers as well as active participants in productive value chains. - 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. LLC Av.Debt capital . México 66267 +52 81 8000 7165 www.Grants Italy . nonprofit. 10017 USA +1 (212) 573 5000 www. IGNIA empowers entrepreneurship and generates social impact while creating attractive financial returns for its investors.fordfoundation. 21 20121 Milan Italy +39 277718726 firstname.lastname@example.org.L. and have a voice in the decisions that affect them.org Ford Foundation 320 East 43rd Street New York. nongovernmental organization.
uk LGT Venture Philanthropy Städtle 28 9490 Vaduz Principality of Liechtenstein +41 44250 8281 lgt.lgt.Poverty reduction Impetus Trust 20 Flaxman Terrace London WC1H 9PN United Kingdom +44 203 3843940 email@example.com www.Equity capital Africa China India Southeast Asia Latin America .firstname.lastname@example.org www. .Grants United Kingdom .Grant Scotland .uk www.Grants .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.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.Relief of human suffering .org. 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.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.Debt capital .impetus.Creation of sustainable livelihoods 33 . . very hands-on support from the Impetus investment team and specialist support for capacity building.org.inspiringscotland.Youth Inspiring Scotland Riverside House 502 Gorgie Road Edinburgh EH11 3AF United Kingdom +44 131 442 8760 enquiries@ inspiringscotland.org.Education .Children .
Poverty & disadvantage Dublin 4 .Education and research .onefoundation.Equity capital .Health . PO BO 20 6740 AA Lunteren The Netherlands + 31 31859 6400 poostlander@noaber. Phitrust focuses its investments both at a European level as well as a worldwide level. .Equity capital companies in the fields of social business through .ie .com The noaber Foundation aims to initiate and support the acceleration of innovations in the civil society where ‗noabership‘ (neighbourship) is key.Environment .Grants Europe Africa Asia North America .Culture and recreation . they act as an ‗entrepreneurial philanthropist‘. education and community building.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details noaber Foundation Dorpsstraat 14.noaber.phitrustpartenaires. Worldwide 34 .Health The One Foundation aims to improve the life chances of disadvantaged children and young people.Debt capital .com www.Mental health Ireland . These innovations are related to health and care.Cleantech . The One Foundation is a private philanthropic fund that will spend down its capital over ten years (2004-2013).email@example.com www. To reach their aims.Grants Ireland Asia The One Foundation 35 Barrow Street .Debt capital its foundation and social investment funds.com PhiTrust is dedicated to funding and mentoring .Microfinance . .ie www.Employment PhiTrust Active Investors 41 rue Boissyd‘Anglas 75008 Paris France +33 15535 0755 martina.Development and housing .Integration of +353 1 8088800 minorities info@onefoundation.
investing in these ideas directly or indirectly via investment products.org www.Microfinance institutions .Children. ResponsAbility is constantly on the lookout for entrepreneurial.org REDF 631 Howard Street.com www.com 35 . . products and information.Equity capital Worldwide . . employment or training (NEET) so they can reach their full potential. and adults who are overcoming barriers to employment.Fair trade producers .Equity capital .Children and young people REDF is a San Francisco-based venture philanthropy organization that invests in nonprofit-run businesses. It gives funding and business assistance to a carefully selected portfolio of social enterprises that employ young people disconnected from school and work.privateequityfoundation. Suite 320 San Francisco. We recognise that young people face a journey from birthplace to workplace with numerous obstacles preventing them reaching their full potential. markets. CA 94105 United States of America +1 (415) 561-6677 www.Grants Europe .responsability. London EC2A 3DB United Kingdom +44 845 838 7330 info@privateequityfoundation.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Private Equity Foundation 2 Bath Place.Debt capital . Rivington Street.org The Private Equity Foundation‘s core mission is to reduce the number of young people not in education. innovative business models in developing countries and emerging markets. youth . .Grants United States (California) .redf.Employment responsAbility provides commercial finance to organizations and initiatives that give people at the base of the pyramid access to services.Small and mediumsized enterprises in developing countries responsAbility Social Investments Josefstrasse 59 8005 Zurich Switzerland +41 44250 9930 info@responsAbility.Education and research .
9th Floor New York.Grant New York City Children.org www.Mezzanine capital Hong Kong . finance.Debt capital .robinhood.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.org www. 8 Wyndham Street Central. youth Education and research Poverty Health Social Investors Club is a social investment company established in Hong Kong in 2010. .Equity capital Latin America Africa Asia . More than single social entrepreneurs have to be supported to accomplish a systemic change.socialinvestorsclub.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.6 billion people without access to electricity.com Solar for All is a global initiative that wants to take a big step ahead in making solar energy affordable to the 1. NY 10003 +1 (212) 227-6601 firstname.lastname@example.org www.Solar industry Canopus Foundation Grünwälderstr. 10-14 79098 Freiburg Germany +49 761 2020 172 contact@sfa-pv. social service and academia backgrounds.org 36 .sfa-pv. therefore the general approach comprises the entire solar PV value chain and related financial services. SIC invests in social enterprises driven by clearly defined missions for creating positive social or environmental impact .Equity capital . Hong Kong +852 21568876 info@socialinvestorsclub. Formed by 10 socially-minded investors with diverse business.Debt capital . .
No focus Table 2: List of social investors Source: EVPA.com www.Social Investor with short Mission Statement Main Financing Instruments Geographical Focus Main Sector focus Contact Details Social Venture Fund Sendlingerstr. The Fund provides support when it is not possible to acquire traditional sources of capital. .socialventurefund. Websites 37 .Mezzanine capital Europe .Equity capital .Debt capital .com The Social Venture Fund invests in social businesses. 7 80331 Munich Germany +49 6960 9184-15 info@socialventurefund. which have innovative and entrepreneurial driven solutions for urgent social and environmental challenges.
The fund maximizes both the risk-return profile to benefit the investor and the social outreachin breadth and depth to micro.4.Equity capital .asnbank.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.com The Dual Return Fund has a double bottom line strategy. To achieve this.Guarantees .Microfinance institutions 38 .blueorchard.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.Debt capital .Microfinance institutions Dexia Microcredit Fund 32 Rue Malatrex 1201Genève Switzerland +41 22 596 4777 email@example.com Dual Return Fund Absolute Portfolio Management Wallnerstraße 3 / 17 1010 Vienna Austria +43 1 533 59 76 firstname.lastname@example.org The ASN-Novib Fund aims to promote a broad participation of all groups in the market economy of developing countries.Debt capital Worldwide . the fund makes capital available to financial institutions providing credit to clients with economic opportunities but limited access to financial services . small and medium enterprises in emerging and least developed economies. .com www.Debt capital Africa Asia Central and Eastern Europe Latin America .visionmicrofinance.
org www.Equity capital development finance. churches and others to share their resources through socially responsible investments and by empowering disadvantaged people with credit.Microfinance institutions European Fund for Southeast Europe Eschersheimer Landstr. 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 .Debt capital Africa Asia Europe Latin America . as a worldwide cooperative society. 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 .O.Debt capital through the sustainable provision of additional .Interest-free loans .Microfinance institutions Oikocredit P.oikocredit. Box 2136 3800 CC Amersfoort Netherlands +31 33422 4040 info@oikocredit.Grants Worldwide .Children and young people .email@example.com 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 .com Oikocredit. .com www.Microfinance Fondation Demeter 44. 6 60322 Frankfurt am Main Germany +49 69 9778765026 s.org 39 . promotes global justice by challenging people.efse.
.Microfinance institution .responsability.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.Fair trade producers .nl Table 3: List of social investors Source: Websites 40 .Debt capital .Equity capital Worldwide . The Omidyars gave the university $100 million to create a fund that would be invested entirely in international microfinance initiatives. responsAbility is constantly searching for entrepreneurial.tufts.edu/microfinancefund responsAbility provides commercial finance to organizations that give people at the base of the pyramid access to services. investing in these ideas directly or indirectly.Small and mediumsized enterprises in developing countries responsAbilitySocial Investments Josefstrasse 59 8005 Zurich Switzerland +41 44250 9930 info@responsAbility.com www.Equity capital .Microfinance institutions SNS Institutional Microfinance Fund Pettelaarpark 120 5216 PT 's-Hertogenbosch The Netherlands +31 73683 3355 www. .edu 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.snsam.Debt capital .Debt capital Africa Eastern Europe Latin America Southeast Asia . innovative business models in developing countries and emerging markets. . products and information.Microfinance institutions Omidyar-Tufts Microfinance Fund microfinance@tufts. The fund does not grant loans to individual businesses but lends money to or invests in the share capital of microfinance institutions.Equity capital Worldwide .
Organic agriculture.Social or ecological housing . Italy . driven by the common desire of a more transparent and responsible management of financial resources. Switzerland . ABS gives encouragement to the Swiss banking and financial markets.4.ch www.Renewable energy Alternative Bank Schweiz Amthausquai 21 4601 Olten Switzerland +41 62 206 16 16 firstname.lastname@example.org 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.bancaetica. may meet socioeconomic initiatives.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.Organizations operating within the third-sector that carry out civil society oriented economic projects BancaPopolareEtica Via NiccolòTommaseo 7 35131 Padova Italy +39 498771111 www. inspired by the values of a sustainable social and human development. .bas.it 41 .
integrated financial services.org www.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details BancoSol CalleNicolás Acosta No.bo BRAC Bank 1 Gulshan Avenue Gulshan-1 Dhaka 1212 Bangladesh +880 2885 2233 email@example.com. thereby assisting BRAC and stakeholders build a "just.bracbank.com. providing them with high-quality. Bangladesh .SME.Bolivia +5912 2484242 info@bancosol. democratic and poverty free Bangladesh".com Bolivia Banco Sol is a bank that offers opportunities to the lowest-income sectors for a better future. 289 P. enlightened.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.bo www. Box: 13176 La Paz . charities and community organisations. Retail and Corporate United Kingdom Charity Bank finances social enterprises.com.com www.No focus Charity Bank 194 High StreetTonbridge Kent TN9 1BE United Kingdom +44 1732 774040 firstname.lastname@example.org 42 . . healthy.bancosol. with the support of depositors and investors who want to use their money to facilitate real social change .Microfinance (in a related program) .O.
no www.de Merkur Cooperative Bank is founded on the idea of conscious handling of money. The bank emphasises building alliances between depositors and lenders and to underpin this it practises transparency as a carrying principle.dk 43 . 9 44789 Bochum Germany +49-234-5797-0 www.dk www. conducting a professional.cultura. social and cultural sectors Merkur Cooperative Bank Vesterbrogade 40. 1. Germany - Agriculture Development aid Education Health care Social welfare GLS Bank Christstr.Environmental.merkur. and on criteria that include environmental.gls. ecological and economic criteria. Merkur pursues a situation where the individual. The money of our customers is invested exclusively in companies and projects whose performance under the above mentioned criteria is outstanding.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 ethical aspects in addition to financial considerations. Norway - Education (private schools) Agriculture Healthcare Housing Microfinance For GLS Bank. based on his own insight.no Cultura Bank's main task is to finance projects which benefit society and contribute to a better natural environment. sustainable banking business means the incorporation of social. meets the needs of others in a dignified way. 1620 Copenhagen V Denmark +45 7027 2706 kbh@merkur. Denmark .
mibanco.No focus new resource bank‘s mission is to advance sustainability with everything we do—the loans we make.newresourcebank. CA 94105 United States of America +1 415 995 8100 ggroff@newresourcebank. To us.com www.pe Mibanco is committed to offering their communities opportunities for progress and access to the financial system. Peru .com 44 .Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details Mibanco. Domingo Orue 165 Surquillo Peru +51 319 9999 www.com. United States . Suite 110 San Francisco. banking isn‘t just a service—it‘s a way to create a better world.No focus New Resource Bank 405 Howard Street. environmental. Banco de la Microempresa Av. and our commitment to putting deposits to work for good. and social impacts of our activities to promote the global well-being of future generations. the way we operate. We manage the financial.
wholesale. non-profit organizations.Social business . they serve as a catalyst for the self-reliance and economic well-being of our membership and community.Nature and the environment sectors (organic agriculture. Suite 100 Oakland.Culture and society . BC Canada +1 604 877 7000 www. We will partner with respected community institutions to provide banking services to small to medium-size businesses.com 45 . with the support of depositors and investors who want to encourage corporate social responsibility and a sustainable society. individuals and families.com Vancity aims to be a democratic.North-South projects (fair trade. community facilities. affordable-housing developers. United States . CA 94612-3206 United States of America +1 51055 08400 mybank@OneCalBank.vancity. ethical.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.OneCalBank. Through strong financial performance. microfinance) Triodos Bank Nieuweroordweg 1. 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 Triodos Bank finances companies.No focus Vancity PO Box 2120 Station Terminal Vancouver.com www.Green industries OneCalifornia Bank 1438 Webster Street. health food stores and renewable energy ) . and innovative provider of financial services to their members. Canada . institutions and projects that add cultural value and benefit people and the environment. 3704 EC Zeist The Netherlands +31 30 693 65 00 www.triodos.Housing .
xacbank. Global Alliance for Banking on Values 46 . including its traditional Microentrepreneurs as well as Small and Medium businesses. The Bank will provide equitable access to transparent. reliable and responsive banking products and services to the Bank's clients.Bank including short Mission Statement Geographical Focus Main Lending Focus Contact Details XacBank Prime Minister Amar's Street Sukhbaatar district P. Mongolia .Environment Table 4: Value Banks Source: Websites.Education .Box-46/721 Ulaanbaatar – 14200 Mongolia +97611 318185 www.O.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. and Profit. People.
IP tools (patents. livelihood opportunities.com avant-gardist identifies. sanitation and the like Bamboo Finance S. Suite 1610 Arlington. banks and nonprofits increase their social impact.r.com www. energy. Developing countries .com Light Years IP 1700 N Moore St. corporations. We leverage our client‘s expertise and and insights to benefit society and sharpen their competitive advantage Global .com www.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 assist our clients distinctive and sustainable values across the globe. design and implement social projects that help foundations. VA 22209 United States of America +1 703 600 8324 email@example.com www.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.Services for low income communities by providing access to affordable housing. education.4. healthcare.à.bamboofinance.lightyearsip.l. We achieve this by promoting appropriate finance for the growth of enterprises which are having a direct positive impact on society. Global . trademarks and licenses) to secure more sustained and higher export income. partners and the field of social entrepreneurship.avant-gardist. 32 rue de Malatrex 1201 Geneva Switzerland +41 22 596 4750 info@bamboofinance. water. 47 .
" Table 5: Social Investment Advisory Global .com Source: Websites 48 .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.org.uk www.socialfinance. 5th floor Cambridge.com www. UK . innovation. if social problems are to be tackled successfully. organisations seeking to solve them need sustainable revenues and investment to innovate and grow.uk Total Impact Advisor's mission is to advise both entrepreneurs and those seeking to maximize the social impact of their capital.No Sector focus Social Finance Ltd 131-151 Great Titchfield Street London.No Sector focus Total Impact Advisors mbrownrigg@ totalimpactadvisors. we believe we have a team that can find the nexus where "social purpose meets financial promise. Social Finance believe that.Small grassroots businesses Many charities and social enterprises face serious financial challenges that stop them from carrying out their work effectively. MA 02139 United States of America +1 617 661 5792 finance@rootcapital. Our role is to devise the financial structures and raise the capital to enable this to happen. Latin America Africa .org www. With our deep roots in banking. W1W 5BB United Kingdom +44 207 667 6370 info@socialfinance.Social Investment Advisory with short Mission Statement Geographical Focus Main Sector Focus Contact Details Root Capital 955 Massachusetts Ave. public policy and private investment.totalimpactadvisors.org. development.rootcapital.
UK .org www.No Focus Source: Websites 49 .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 . multistage analysis process. so that more lives can be changed for the better.philanthropycapital.org New Philanthropy Capital (NPC) is a consultancy and think tank dedicated to helping funders and charities achieve a greater impact.phineo. NPC's mission is to put effectiveness at the heart of how charities work and how funders give. we build bridges between social investors and nonprofit organizations.org www. Table 6: Funding Consultancies Germany . Using our unique.org Phineo Anna-Louisa-Karsch-Straße 2 10178 Berlin Germany +49 30 520065400 info@phineo.No Focus PHINEO‘s mission is to strengthen the nonprofit sector and civil society.4.
and green-technology.organisations with a social.com Impact Investment Exchange Asia aims to provide Social Enterprises in Asia with greater access to capital.No trading yet NExt SSE is a project committed to bringing capital to social ventures . and clean.com www.nextsse. Table 7: Social Stock Exchanges London . Personal information 50 . housing.com NExT SSE c/o KonvergentaInterZero GmbH Rungestr. In the months to come. Singapore .4. allowing them to more rapidly expand the impact of their activities.com Source: Websites. ethical or Berlin ecological focus and a sound business model.and ethical consumerism. legal requirements for establishing a 'real' exchange are being clarified in collaboration with BaFin (the German federal financial supervisory agency).asiaiix. CEO: pjethi@gmail. green. 19 10179 Berlin Germany +49 30 6098810 10 info@nextsse.No trading yet Pradeep Jethi. most likely to be from sectors that create social value such as health. transport.No trading yet The Social Stock Exchange is designed to provide access to capital – specifically risk capital – for organisations that are for-profit social purpose businesses.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. leisure.com www. .
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 Cinepop 52 .
.......... 44 Value banks ............................ 39 OneCalifornia Bank ..... 19 Social Venture Fund ...................................... 22 Mibanco ..................................... 27 avant-gardist ............... 31 Ford Foundation ............................................................................................................. 33 Private Equity Foundation ............... 11 Selection process ......................................................................................... 39 Revenue share agreements ................................. 46 Banca Popolare Etica................................... 29 Core Innovation Capital ........... 42 Grants .................................. 29 Cultura Bank ................................................................................................ 34 Recoverable grants.......... 19 Social Investors Club ....................................... 44 Performance measurement................................ 21 Ferd Social Entrepreneurs ........ 28 Charity Bank ............. 18................................ 44 Venture philanthropy funds ................ 49 Social stock exchanges ............. 6 Social Finance.................................................. 41 Children‘s Investment Fund Foundation ... 22 Robin Hood............. 41 BonVenture ........................ 16 PHINEO............ 33 Total Impact Advisor ......... 42 d.................................................... 38 Exit ................. 40 Banco Sol .............................. 32 Internal financing ..................... 43 NExt SSE ..................................................................................6 Index Acumen Fund . 32 Light Years IP ................................................................................................................................................................................................................................ 50 The One Foundation .................................................... 22 Dexia Microcredit Fund ....... 11 SNS Institutional Microfinance Fund ............. 22 Hybrid capital ....................................... 37 Dual Return Fund . 30 Financing instruments ............................... 22 Convivatus Social Capital ............................................................... 27 Alternative Bank Schweiz ................. 13 New Philanthropy Capital............................. 47 Screening ................... 42 Mezzanine capital ................................................................................... 46 Merkur Cooperative Bank ............................................. 36 Solar for All ..... 37 Due diligence..................b foundation.................................................... 46 Bamboo Finance ..................... 32 Inspiring Scotland .............................................................................................................................................o................ 43 Negotiating the financing terms .............. 30..................................... 22 Funding consultancies .............................................................................................................................................. 20 GLS Bank ....... 48 new resource bank ........................... 35 root capital .................................... 18 External financing ....................................................................................... 35 Task force members.................................................................................................... 31 Impact Investment Exchange Asia ........................................................................... 47 Triodos Bank .................................. 19 Vancity............................ 40 Artha ....................... 27 ASN-Novib Fund .................................................................................. 38 Fondazione Oliver Twist Onlus ............ 35 Social Stock Exchange London ................................................................. 48 PhiTrust .................................... 49 noaber Foundation ............... 30 Equity capital...... 22 IGNIA...... 38 Omidyar-Tufts Microfinance Fund.................................... 19 Social investment funds .......................................................................................................... 22 European Fund for Southeast Europe ......................................... 39 Social capital markets ............................................. 47 Social investment advisors ............................. 49 Impetus Trust.............................................................................................. 19 Xac Bank ...... 29 Debt capital ................... 22 REDF ..................................................... 21 LGT Venture Philanthropy .......................................................................................................................... 34 responsAbility .......................... 11 EH Foundation ............ 23 Fondation Demeter ..................... 33 Oikocredit ...................... 28 Brac Bank ................... 28 Convertible grants ............................. 45 53 ................... 37 Auridis .................................. 31 Forgivable loans ........................................... 41 CAF Venturesome ..........
(2010) 'Reporting im Social Entrepreneurship'..sbs. Achleitner. & Tappeiner. E. & Spiess-Knafl. (in press) 'Financing of Social Entrepreneurship' in Volkmann.ac. Download: http://papers. in Hackenberg and Empter (Ed. Tokarski & Ernst (Ed.schwabfound.com/sol3/papers. Stuttgart: Schäffer-Poeschel. P. D. W.gabv. C.-K. A. (2004): Double Bottom Line Project Report: Assessing Social Impact in Double Line Ventures. John.7 Sources The content is based on a survey of Schwab Fellows conducted in December 2010. Pöllath. W. Download: www. S.com www. 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. Konzepte zur finanziellen Entrepreneurs'. Spiess-Knafl. A.). F.-K. S.-K.uk/skoll. (2006) 'Venture Philanthropy . R. Achleitner. A. / Long. Wiesbaden. (2010) 'Finanzierung von Social Entrepreneurship durch Venture Philanthropy und Social Venture Capital'. VS Verlag..org 54 . & Stahl. Understanding Social Entrepreneurship & Social Business Be Part of Something Big.. R. Gabler Verlag. Social Entrepreneurship . Schraml. (Ed.cfm?abstract_id=1117903.org www. Roder. B. (2007): 'Finanzierung von Unterstützung von Social Achleitner.eu.) Sozialunternehmern. (2011) 'Finanzierung von Social Enterprises – Neue Herausforderungen für die Finanzmärkte'. S. Clark. Wiesbaden. / Rosenzweig. interviews with Schwab Fellows and the following literature: Achleitner.evpa.ssrn. Gabler Verlag. / Olsen. (2008) 'Private Equity in Familienunternehmen: Erfahrungen mit Minderheitsbeteiligungen'.-K. Wiesbaden Most websites were cited in the text. W.Social Busines.ox.The Evolution of High Engagement Philanthropy in Europe'. A.). Heister. & Volk.