Impact Investing in IsraelG8 Taskforce Plenary

July 9th, 2015

Yaron NeudorferCEO, Social Finance Israel yaron@socialfinance.org.il July 2015

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ISRAEL

Jews 75%

Arabs 21%

Others 4% During 2014

8.3 million people 176,000 children born 23,000 immigrants arrived

Projection to 2020 9 Million people ~50% of the population will be either

Israeli Arabs or Ultra-Orthodox Jews

GDP $40k per capita (raised from $19 K 10 years ago)

Unemployment Rate 5.4%(down from 6.2% in 2013)

An innovation driven economy 140 scientists, technicians, and engineers

per 10,000 employees – the highest rate per capita in the world.

Israeli tech startup exit amounts increased by 980% over the past five years to a record $9.2 billion in 2014.

GINI Index 0.42(Level of post-tax-and-transfer inequality)

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Key initiatives in Israel began to emerge in recent years, but only now starting to take form and gain traction – conditions align with recommendations from the G8 taskforce, but guidance and a steering body is needed .

First impact fund, with matching investment from

government, focused on the Israeli Arab sector

Establishment of a social-financial intermediary

A surge in accelerators with social goals

2 Impact funds, with matching investment from

government, focused on social enterprises tackling

unemployment

2011 2013 2014 2015

Expected 2015/2016 Launch of 4 social impact

bonds

Creation of an Israeli wholesaler of impact capital (Big Society Capital model) – funded with unclaimed assets ($65M)

Establishment of a Venture impact fund in Israel

Social Impact Investing in Israel

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An Israeli government initiative to establish and operate Social “Entrepreneurship” funds, to invest in social businesses creating employment for populations facing high unemployment.

Goals Implementation Impact investment: opening the path for cross sector

collaboration, philanthropy & investors Developing the social business sector Exploring new solutions for employment of

disadvantaged population

2015: Two funds - $7 m each Investment period: 4 Years Partners: Government, Philanthropy, Investors (about

1/3 each) Comprehensive impact assessment analysis

Yozma Funds

Philanthropy Investors

Gov. incentives to corporate

First lossTax Credit

Social Business

CapitalCapital

Yozma Social Funds

$14 M. for social businesses tackling unemployment

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A surge of entrepreneurial programmes managed by non-profits, offering potential investments in tech-for-good start-ups and social enterprises.

8200- tech for impact

Tech for Good

High-techIn the Arab sector

Business to tackle disabilities

Social business

Social enterprises in the Israeli Arab

sector

Bedouin entrepreneurship

Innovation in peripheral areas

Social entrepreneurship in Jerusalem

Grass Roots – Forming Accelerators With Social Goals

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Reducing Dropout

Rates (Higher

education)

Tackling Type 2

Diabetes

Improving K-12 Maths

Ultra-Orthodox Male

Employment

Arab Financial Empowerment

Child Care

Reducing Recidivism

SFI has developed innovative models to tackle pressing social issues, and will launch two SiBs in the next few months.

Final StageAgreements and Financing

Development StageIn-depth Research & Coalition Building

Early StageInitial Feasibility

Launch

Social Finance Israel

~$10 M. in SIB’s this year

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The two SiBs approaching launch have been presented to the G8 Taskforce, bringing innovation through unique models developed for the Israeli market – both models built for scaling up immediately, to include additional outcome payers

Reducing the incidence of Type 2 Diabetes in high-risk pre-diabetics

Reducing Dropout Rates from Higher Education (Computer Science & engineering)

Outcome Payer

H.M.Os and the National Insurance Institute

Universities and colleges

Scale Intervention in up to 2,250 high-risk pre-diabeticsCost: $5.4m

Working with two institutions, 550 students with high-risk of dropping out Cost: $2.1m

Innovation • Financing of prevention of healthcare problems , blending of economic and health outcomes

• Multiple outcome payers pooling resources across different phases of the disease to address a common challenge

• An integrated, personalized intervention, supplemented with latest technology

• Non-governmental outcome payers • Economic model based on cashable

increases in revenues. • Creating employment opportunities for

intervention graduates

Launch November 2015 October 2015

Social Finance Israel

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THANK YOU