MANAGING THE FINANCIAL

SIDE OF SOCIAL VENTURE

Group: 8

Butalid, Jaynel
Salumbides, Rommel
Sanday, Hasna
Tagle, Kevin
RISING CAPITAL FOR SOCIAL VENTURE

Sources of Capital
When searching for additional funding, the
social company may consider one (or
several) of the following sources:
 Research funds ususally Government agencies
benefits universities and may also provide start-
research institutions but up funds and other
GOVERNMENTS the social enterprises
could also profit from
resources to encourage
new ventures, whether
them in collaboration commercial or social or
with a bigger both. The focus here is
educataional usually on the
organziation for joint innovations or regional
projects. development.
INTERNATIONAL
ORGANIZATION

funding institutions often

finance large-scale
private-sector enterprises,
they increasingly are
supporting initiatives to
foster social
entrepreneurship in
emerging markets all over
the world.
 NGOs include any private association
organized by individuals who have a
common purpose.
NON-
GOVERNMENTAL
ORGANIZATIONS
(NGO’S)
NGOs can either implement their own programs,
products, and services or they can provide
funding to other organizations (including SEs)
to help fulfill their mission.
FOUNDATIONS

Foundation a nonprofit
organization (type of NGO)
which is formed for the purpose
of funding and sup¬porting other
organizations/ individuals.
Foundations usually focuses on
philanthropy, the practice of
promoting and supporting social
welfare.
 Investment funds can be
private or public, profit
driven, or nonprofit.
Investment funds are
made of individuals,

INVESTMENTS organizations or
banking institutions.
Venture capital firms
are also a sort of
investment funds that
provide funding for
potentially successful
start-ups.
 INDIVIDUALS
• Friends and families: Usually the most accessible and easy to
find source of funding, but seldom large enough to ensure the
financial viability of the enterprise.
• Philanthropists: also known as an “Angel investor” –people who
are willing to support the social venture if they believe in its
vision and mission. Some of these private investors won’t
require any accountability from you and will give those money
as a donation, while others will ask for a financial return on
investment
• Self: Some entrepreneurs prefer to self-fund. In this case, they
carry the burdens and the risks by themselves, but also
simplifies to a great extent the planning and operational process.
 Many successful for-
profit companies are
willing to partner with
social enterprises in
PARTNERSHIP WITH This is a valuable
source for both
order to increase their
social impact and to
LARGER COMPANY financial and non-
financial support.
gain better image or
other promotional and
marketing benefits or
as part of their
Corporate Social
Responsibility.
MANAGING THE
FINANCIAL OF THE SOCIAL
VENTURE
Income Statement = Reflects the results
of the operations of a firm over a specified
period of time and generally prepared on a
monthly, quarterly, or annual basis.
Balance Sheet = Describes what the
business owns and owes at a specific period in
time. In a typical balance sheet, assets are listed
in order of their liquidity.
Statement of Cash Flow = Summarizes
changes in a firm’s cash and expenses for a
specific period.
MANAGING THE
FINANCIAL OF THE SOCIAL
VENTURE

Sometimes, we can baulk at this notion,

particularly if we are more about the social part
of our social enterprise. However, even charities
make profits. These are often called surpluses,
but essentially these are the same thing. We are
looking to make more money in a given year
than we are to spending that money. When we Davies Okeowo
fail to raise enough income in a given year, we Social Entrepreneur in Africa
call this a loss or charities call it a deficit.
FINANCIAL SUSTAINABILITY
OF THE SOCIAL ENTERPRISE
Applying Financial Ratio
Analysis
Examples of Financial
Ratios:
• Gross surplus = Revenue
– expenses
• Gross surplus margin =
Gross surplus/Revenue
• Net surplus margin = Net
surplus/Revenue
• Working capital = current
assets – current liabilities
• Current ratio = Current
assets/current liabilities
• Total debt-to-assets ratio
= Total debt/Total assets
Determining the Financial
Risk of Social Ventures
• Can help to mitigate the
financial risks that a
social venture may face.
• Net assets
• Administrative costs
• Revenue sources
• Operating margin
Financial Viability
Index (FVI)
• Include the following
components:
• A significant
reduction of net
assets
• The removal of
programs
• A significant
reduction of revenues
• Insolvency (total
liabilities exceeding
total assets
THANK YOU
FOR
LISTENING