Monday, 29 May 2017

Impact Areas



I have recently returned from Asian Venture Philanthropy Network (AVPN) conference in Bangkok in which 730 participants from 32 countries came together to share knowledge and ideas about growing the human, financial and intellectual capital available for high potential not-for profits and social enterprises.

These were foundations, impact investors, business, government and researchers all focused on supporting and scaling up organisations tackling the tough issues of today including universal education, health care, climate change and disaster recovery. Our local host was the Khonthai Foundation.

The 'missing middle' is the space between a philanthropic grant and commercial or private finance. It is the space where a social enterprise is looking for support to scale-up to a sustainable enterprise but is not yet “investment ready” from a commercial perspective. For a not-for-profit social enterprise that is a charitable organisation, the scaling-up can be funded via a grant, a program related investment or an impact investment.

Impact investment is the term used to describe the growing investment space area where social investors (including many foundations and other investors with a social conscience) are looking for both a social or environmental return plus a financial return from their investment. In this context, philanthropic grants can also sometimes be the patent capital in a layered financing solution.


Asian Venture Philanthropy Network conference profiled many new or growing initiatives that are helping build this “missing middle”. For example, in India, Social Alpha is establishing the Foundation for Innovation and Social Entrepreneurship; the Sasakawa Peace Foundation which is part of the Nippon Foundation, runs Japan Venture Philanthropy Fund; and there is a new Women’s Opportunity Impact Fund for South East Asia recently launched by Social Enterprise Assistance Funds (SEAF).

The Deal Share pitch sessions during the conference provided opportunities for investors and grantmakers to learn more about specific social enterprises with a social or environmental purpose that were looking for more finance.

I was very taken with the Bamboo toothbrush, which has been developed by a dentist and is planned to replace plastic toothbrushes, and Citizen Farm in Singapore, which is supporting sustainable local food production. There were many other wonderful social enterprises also attracting attention from local investors and foundations.

Shuichi Ohno, President of Sasakawa Peace Foundation, spoke about three major challenges facing philanthropy around the world:

  1. The limitations of traditional grantmaking, which presents opportunities to look for different approaches to social investment to bridge these gaps between philanthropy and private or commercial sources of finance.
  2. The rise of new stakeholders, including social entrepreneurs and online networks; and
  3. A changing global financial environment, where some foundations are receiving very low or no return on some investments, which has an adverse effect on grants budgets unless foundations are spent down.

If philanthropy is to remain relevant in these fast-changing times, it is important that we learn and find opportunities where we can make precious grant dollars and impact investments count. Doug Miller, founder of AVPN, encouraged philanthropy to think about the human and intellectual capital that we can bring to tough issues and projects, not just the granting capability.

Foundations and social investors have many opportunities to give time and expertise as well as money. Many speakers spoke of rising inequality in Asia and the importance of collaborative and creative solutions to ensure sustainable and equitable development.

A wonderful example of project where a foundation has provided more than money is a project of the Solve Education, where Solve has brought together educators, game creators, software engineers, data analysts, curriculum experts and social media experts to develop education via low end smartphones that operate on bandwidths available in emerging Asian markets. It was noted by Ong Peng Tsin, the Chairman at Solve Education, that more people in the world have smartphones than electricity at home. Something to reflect upon.

I could not complete this blog without mentioning one of the two panels on climate change and philanthropic capital of which I was part. I was also part of a foundation only panel session on Impact Investment hosted by Sasakawa Peace Foundation. Only two per cent of philanthropic support in Asia is supporting climate change mitigation and adaptation. It was observed that this is probably a consequence of a failure, not of science, but of communication.

It was an honour to be on the panel with National Geographic Society, China Foundation Centre, Ashden Trust and our facilitator, Pierre Lorinet from Trifigura Foundation. There is a lot more philanthropy can do to help ensure that we achieve a just transition to a low carbon future.

I would like to congratulate AVPN’s leadership team led by Naina Batra and Doug Miller for hosting such a thought provoking and informative conference. There is a wonderful growing energy and commitment underpinning philanthropy and social investment in our region.

Catherine Brown

Impact Areas