making csi matter csi & hybrid models - b evans
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The relationship between CSI and hybrid models for developmentTRANSCRIPT
The Relationship Between CSI and Hybrid Models for DevelopmentInsights and perspectives
GREATERGOOD SA is a registered trust, PBO and NPO in the GreaterGood group. GREATERCAPITAL is a not for profit social enterprise in the GreaterGood group. Registration number 2005/026508/08 | IT3334/2004 | 040-346 NPO | PBO 930014027.
Section 18A tax exemption status. Level 4 BEE contributor. © GREATERGOOD SA 2010.
Trialogue– May 2011
> A look at the continuum of social investment> Social enterprises and their role in social development> Base of the Pyramid Market Strategies> Inclusive Business discussions
Overview of Presentation
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
SOCIAL PURPOSE ORGANISATIONS COMMERCIAL PURPOSE ORGANISATIONS
Charities Revenue generating social enterpriseSocial
Purpose Business
Traditional Business
Grants only: No trading
Includes traditional
philanthropy
Trading revenues and
grants
Potentially sustainable
social enterprise (>75% in trading
revenues)
Breakeven: all income
from trading
revenues
Profitable social
enterprise: surplus
reinvested (no dividends
to shareholders)
Profitable social
entreprise: surplus profit
distribution
CSR/CSI Company
Company allocation a
percentage of profits to
charity
Mainstream Market
Company
Primary driver is to create social value
Primary driver is to create financial value
Organisations can create “blended” social & financial value
Impact only Impact first Finance first
Venture Philanthropy
Adapted from John Kingston, CAF Venturesome, by Pieter Oostlander, Shaerpa (EVPA 2010)
Social Investment Continuum
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
> The primary purpose of the enterprise is to address a social or environmental issue
> AND
> It produces a good or service to sell to the market
Definition of a social enterprise
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
> No legal definition of Social Enterprise in South Africa> Social Enterprises currently limited by:> For Profit> Not for Profit> Hybrid Business Models
Business Model Options for Social Enterprises in South Africa
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
Some Examples
> Bulungula Lodge and Incubator> Silulo Ulutho Technologies> Shonaquip> Small Enterprise Foundation> Phakamani Foundation> Books of Hope> The Big Issue> Johannesburg Housing Company
Different forms of FinanceRO
I Exp
ecta
tions
Financial Risk appetite
Low
No financial return
Moderate
Return ++
Capital return
High
Fixed income fundsDebt / Bond issues
Secured loans
EquitySome microfinance
Venture capital
Social venture capitalNon-profit growth capital
Patient capital
Grants
Unsecured loans
Overdraft facility
Quasi-equity
Recoverable grantsGuarantees
Low interest rate loans
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
> Large majority receive some or most of their income from earned revenue; just over half receive funding from philanthropists and/or international funders.
> Grant funding is the funding facility most frequently accessed by these organisations. However, half of social purpose entities consulted have received alternative forms of finance involving some degree of repayment
> Grant funding still perceived to be the most favourable form of finance BUT social purpose entities are progressively more interested in attracting alternative, more long-term, transparent sources of finance
Finance features of a social enterprise
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
Innovation
Microfinance>Alternative banking solutions>Life insurance>Unilever>Cobb>Sandbag Housing>Affordable Private Schooling>Affordable Private Healthcare>Energy saving innovation
Innovation
>Companies looking for new revenue streams through low income markets
>Core business discussions
>Seem to exclude input from CSI or ED
Inclusive Business Discussions
SOCIAL PURPOSE ORGANISATIONS COMMERCIAL PURPOSE ORGANISATIONS
Charities Revenue generating social enterpriseSocial
Purpose Business
Traditional Business
Grants only: No trading
Includes traditional
philanthropy
Trading revenues and
grants
Potentially sustainable
social enterprise (>75% in trading
revenues)
Breakeven: all income
from trading
revenues
Profitable social
enterprise: surplus
reinvested (no dividends
to shareholders)
Profitable social
entreprise: surplus profit
distribution
CSR/CSI Company
Company allocation a
percentage of profits to
charity
Mainstream Market
Company
Primary driver is to create social value
Primary driver is to create financial value
Organisations can create “blended” social & financial value
Impact only Impact first Finance first
Venture Philanthropy
Adapted from John Kingston, CAF Venturesome, by Pieter Oostlander, Shaerpa (EVPA 2010)
Social Investment Continuum
Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
>CSI practitioners unique position>Ability to identify social entrepreneurs and NGO’s with
innovative revenue models>Ability to access community champions>Ability to provide grant seed capital in order for social
entrepreneurs to use this as leverage for debt finance>Ability to escalate ideas to core business
>Core business discussions>Seem to exclude input from CSI or ED
Unique Value of CSI
My Dream