World

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Flickr/CC/Vladimir Pustovit

By Pia Chatterjee

A substantial number of social enterprises aimed at helping women are concentrated in countries in the Indian subcontinent, the MENA region (Middle East and North Africa) and Latin America. However, with women’s employment rate at 62.5% compared to men’s 74.3%, their wages 16% less than men’s on average, pensions similarly 39% lower, and the fact that 1 in 3 women in the European Union alone experiences physical or sexual violence at some point in her life, Europe still has some way to go to achieve equality between the sexes. Social enterprise provides a particularly appropriate avenue for women to be helped and assume leading roles in business at the same time. Read on to find out more about 5 organizations helping women move up in Europe:

  1. Generando Igualdad, Spain: Generando Igualdad (Generating Equality) is an association that was formed in 2000 and works tirelessly to provide opportunities for women to enter the labour market and fight against gender-based violence. They manage a handful of projects that hope to eradicate gender-based inequality artistically, with psychiatric help and consults, and through campaigns to sensitize people to gender issues. Their project “Generando Tiempo, Amadrinando Vidas” (Creating Time, Sponsoring Lives) is particularly striking from an entrepreneurial standpoint as it aims to create an enterprise providing victims of violence with sustainable income. The endeavour works on the premise that these women tend not to have access to the support and therapy needed to enter the labour market and become economically autonomous, a vital step in the kind of recovery concerned. The organization is funded thanks to crowdfunding methods and tax concessions for groups working towards gender equality provided by the government. Check out their website for more information. (Note: Website is in Spanish.) 
  2. Why-Not Women, France: Why-Not Women is a financed project that aims to support women working in social enterprise worldwide, or social enterprises helping women. It was launched by a group of French students interested in women’s social enterprise and brings together students of the like worldwide to support and encourage small enterprises in the field. Through this project, the students not only find ways to connect directly with people working in the area they’re interested in, but also helps these small enterprises receive the aid that is crucial to correctly manage their work and expand, all the while making it clear to the world that supporting social enterprise for women is incredibly important. If you’re interested in contributing, take a look at their blog here. 
  3. B-fit, Turkey: b-Fit is an original project that seeks to promote gender equality, education and entrepreneurship of women and girls in Turkey through sports. Launched by Bedriye Hulya in 2006, b-Fit provides women with the physical and mental space to be free from traditional gender roles and societal pressures. Structured around daily 30-minute workout sessions, it puts women in the appropriate social setting to be able to embrace their independence outside of their traditional roles, raise their self esteem and put themselves in control of their own bodies. Their mission is also concerned with promoting female entrepreneurship and creating professional opportunities for women. Their centers are located nationwide and are open to women of all ages and backgrounds. They are founded and managed entirely by women, which itself is empowering and helps them acquire a very useful set of entrepreneurial skills, not to mention that it makes them great role models for the women constantly surrounding them. A monthly membership costs between 12 and 48 euros depending on location and type. Most members are housewives (40%) with the rest comprising students, teachers, health and legal sector workers, and retirees. You can easily find the b-Fit center nearest to you on their official page, so don’t wait any longer to take control of yourself and your environment and go for a good workout!
  1. Bosnian Handicrafts (BHcrafts), Bosnia and Herzegovina: BHcrafts is a retail business that employs refugee women displaced by the Bosnian war. Many of these women, though illiterate, were extremely proficient in knitting when they were recruited. The firm gave them a source of sustainable income in the wake of economic and social devastation that tore them from their families and homes. It produces handwoven clothing and decorative items, having started out as a humanitarian enterprise and evolved into an impressively successful export-oriented venture. These goods, popular in Bosnia and Herzegovina, France, the US, Spain, Italy, Japan and Kuwait, not only serve to rehabilitate these refugees but also keep them in touch with cultural traditions they hold dear. All products are made in consideration for the environment and using domestic raw materials to support the local economy to the furthest possible extent. It’s e-commerce facilities has eased its trajectory onto the international stage and made it possible for 89% of BHcrafts’ operations to be financed by its sales today. Take a look at their beautiful work on their website if you’re interested!  
  1. Network of Mother Centers, Czech Republic: A business that has been around for almost 15 years now, Network of Mother Centers’ work is focused on alleviating the grave issue of discrimination against the mothers of small children in the Czech Republic. With unarguably low allowances for maternity leave and obvious adverse social and professional consequences for mothers that do take time off to raise their children, the strong network of centers that this practice provide is essential to achieve gender equality in the Czech context. The 335 existent centers help women and their children to meet each other in a setting that presents a large selection of activities including crafts, sports, educational programmes and requalification workshops. Open to all, counting minorities, refugees and the disabled, these sessions also provide the platform to discuss important issues of xenophobia and racism. The centers ultimately furnishes these women with the perfect amalgamation of support, professional maintenance, exchange of ideas and involvement in public issues. To learn more about this fascinating work, have a quick browse on their website. (Note: Website is in Czech.)

 

If you were wondering where all the women’s empowerment social enterprises were hiding in Europe, here is just the tip of the iceberg! Be sure to support the ones you find have a real social impact to nudge Europe in the right direction – towards a brighter, more equal future.

 

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Wikimedia/CC/Fred W. Baker III for USDOD

By Santiago Martínez

Collaboration is an important, if not crucial tool for dealing with social issues in a society. Numerous organizations and government entities have attempted to collaborate through the years in order to address social complexities, yet few have yielded long-lasting effective results.  

In 2011, managing directors of a non-profit consulting firm John Kania and Mark Kramer coined the term “collective impact” . They published an article of the same name in the Stanford Social Innovation Review, defining it as a phenomenon that  offers  more inclusive, long-term, effective collaborative efforts in society. The difference between collective impact and collaborative partnerships lie in having all these qualities: common understanding of the objective, issue and strategy; common way to measure impact, so all parties are speaking the same language; having constant communication, just like a long-term relationship; and the creation of an independent shared organization, that deals directly with the problem and not with the complexities of each organization.

When has this worked, you ask? Well, although rare, there has been moments in recent Latin American history that have succeeded, and here are 3 of those moments:

  1. Nuevo León, Mexico : 2011

Nuevo León, located in the northern part of the country, is the richest state in Mexico as a highly industrialized zone. Its economy is heavily dependent on the capital of major corporations, as it is the hub of major Mexican conglomerates. From 2006 onwards, the Mexican government declared a War on Narcs, sparking an intense of violence in the country, specifically Nuevo León. Monterrey, its capital, suffered a great wave of violence in 2011. Business leaders and civil society got tired of this and put pressure on the government to deal with security. Out of this pressure, the Fuerza Civil de Nuevo León was born.

Business leaders met with the government and delivered strategies and requirements that this new security force needed in the state: highly skilled, militarized and with enough incentives to be difficult to corrupt. The Fuerza Civil ended with a $1,200 dollar monthly salary, with scholarship, healthcare and other benefits while demanding highly trained professionals. This is a major step in which the average policeman has barely finished elementary school and has a $600 salary, which is easy bait for corruption. The violence has decreased in the last years in the state, and the Fuerza Civil has only lost barely one member in the 4,000 total corps. As a collective impact effort, it united the sectors of society in an emergency, where communication between the public, private and civil sector increased in order to promote a long-term security project. In the end, it is expected to develop into a full force of educated, competent policemen and women.

Wikimedia/CC
Nuevo Leon State, Mexico Wikimedia/CC

  1. Amazon: 2014

On May 21, 2014, the government of Brazil and multiple national and international entities, plus public and private funders signed a deal that would protect 60 million hectares of the Amazon rainforest with $215 million committed to the objective. The program is called Amazon Region Protected Areas (ARPA) and is now the largest conservation deal in history.

This program follows the same spirit as its predecessor Project Finance for Permanence, and thus stands in two key lines of action: ensuring the permanence and conservation of a large enough protected area to maintain a healthy ecosystem; and uniting all stakeholders to benefit from and depend on the project, thus promoting inclusiveness and a check-and-balances approach. NGOs, private funds and communities are all participant, as well as international partners, and philanthropists. However, the most important aspect of this is that it is a long-term strategy to implement, not a quick patch to the problem.

Other initiatives have stemmed out of this Brazilian program. The NGO “Gaia Amazonas” proposed to the Colombian government the “Biological Corridor Andes-Amazon-Atlantic”, which would be a135 million hectares of safe-keeping in the Amazon. However, it is still in the works since it needs an agreement between Brazil, Venezuela and Colombia that will hopefully be reached in the Paris Conference this year.

Flickr/CC/ Neil Palmer (CIAT)
Flickr/CC/ Neil Palmer (CIAT)
  1. Technical Education in Colombia: 2006-2010

Colombia has faced technical and technological education problems, featuring a gap between the job market and the skilled labor that was needed to further development. Therefore, they decided to launch the “Strengthening Technical and Technological Education Programme” in 2006. The programme featured the creation of alliances between public and private sector actors, plus some NGOs. Public schools, regional and local officials, producer associations, educational institutions, firms and industry leaders were all part of these partnerships in conjunction with the Colombian government. The objective, or similar agenda, was to boost the student body of technical skills through technical and vocational education.

These alliances were required by the Ministry of Education to develop a legal recognition, and thus giving them independence for developing their own projects that are needed in each community or locality within four years. In the end, 40 alliances comprised 97 unions and private producer associations; 129 companies; 19 research and development centres; and 532 secondary education institutions in 245 municipalities.  The broad scope of this inclusive program is a perfect example of the potential of collective impact as it involves a long-term strategy, with an increased communication, same objective, new organizations and shared measurements.

Wikimedia/CC/Cijujuy
Wikimedia/CC/Cijujuy

Collective impact, while rare, proves to have a tremendous capability for social change because it develops when major sectors of society agree in a goal, and will do anything to make it happen.

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Flickr/CC/Khairul Abdullah

By Laura Manent

 

Recent years have witnessed an increase in the importance accorded to Corporate Social Responsibility around the world, as we get more and more preoccupied by climate change and sustainability issues.

Corporate Social Responsibility (CSR) refers to the fact that companies are responsible for the impact of their activities on society and the environment, so they decide to benefit society in different ways by acting upon social issues.

 

What about Switzerland ?

Flickr/CC/Guido Gloor Modjib
Flickr/CC/Guido Gloor Modjib

According to the Swiss Confederation,

“A consistent and broad implementation of CSR significantly improves sustainable development and provides solutions to social challenges.”

In fact, Switzerland considers that by being concerned about issues as working conditions, environment, human rights or corruption, companies can be more competitive and contribute positively to society. And yes, Switzerland knows something about competitive enterprises as the country is among the most competing in the world.

 

On 1 April 2015, the Swiss Federal Council adopted a position paper and an action plan on CSR. Considering its necessity, the Confederation decided to play a role in the development of a framework and standards surrounding CSR. By adopting a responsible behavior itself, informing and heightening awareness in Switzerland and abroad, providing support to Swiss companies and promoting transparency, the Confederation is looking to coordinate the implementation of its action plan between 2015 and 2019. Helping enterprises implement CSR by setting an example makes Switzerland a country where the government itself is socially and environmentally responsible.

 

Private and public sectors are involved

 

Flickr/CC/Aero Icarus
Flickr/CC/Aero Icarus

 

Companies such as SWISS and Swiss Life are already committed to corporate responsibility. The Swiss national airline, has developed a strategy regarding its ecological, social and economic responsibilities : it promotes health by looking after its staff’s well-being, supports a day nursery, supports technological progress and research into alternative fuels within the Ecole Polytechnique Fédérale de Lausanne (EPFL) to reduce its environmental impact.

Swiss Life, an insurance company, was part of the creation of the Swiss Climate Foundation in 2008 and created a foundation to fund domestic charitable initiatives in the fields of education, culture, health, and integration.

 

For those who don’t really know where to start, in 2000 Bettina Ferdman Guerrier created Philias, a business network aiming to promote CSR in Switzerland. Six years later, Humagora was created as a unique multi-stakeholder platform to promote partnerships between the private, public and nonprofit sectors, encouraging innovative and responsible projects with a societal impact in the country.

The 11th edition of Humagora is taking place on 11 November 2015, and will revolve around different themes such as environment and poverty. Through workshops and speeches, Humagora offers to companies and nonprofit organizations a dedicated platform of networking to get to know each other in order to act together. The Humagora Award rewards every year the most effective partnerships.

 

In 2008, the University of Geneva has even launched its own Executive Education in Corporate Social Responsibility in the form of a Certificate of Advanced Studies, Diploma of Advanced Studies, Executive MBA or Summer Courses (your choice to make), the University encourages professionals from private and public sectors to become the innovative and responsible leaders of tomorrow.

Flickr/CC/Jack at Wikipedia
Flickr/CC/Jack at Wikipedia

 

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Niranjan and Devan, photo courtesy of Myclo

By Maria Bennici

Looking for a sweet way to keep the sun out of your eyes while keeping American small businesses afloat? Check out MyClo, a for-profit social enterprise founded by Niranjan Kumar and Devan Anderson, two people brought together by a common love for entrepreneurship and fashion. The company, which focuses entirely on hats, uses an innovative microfinance model in partnership with Kiva Zip in order to provide loans to American entrepreneurs in need, while providing adjustable hats to customers with an ethical and trendy streak. I talked to Niranjan and Devan to delve into their experience and hear their story.

 

Backstory:

While an economics student at UC Berkeley, Niranjan went to Honduras to work as a microfinance consultant, returning with not only experience but the inspiration to start his own entrepreneurial venture.

“I just really wanted to pursue something that was very different and jump into entrepreneurship,” said Niranjan of his post-graduation plans. After being introduced to Devan by a mutual friend, the two of them instantly hit it off and began to plot what sort of social enterprise they could collaborate on, gradually focusing more on “high quality products that look really good but also make a significant impact in the lives of others.”

“Before we focused on American entrepreneurship and American headwear, we were all over the place. We wanted to create T-shirts, jeans, pants, shorts, sweatpants—we didn’t know really, but we knew we wanted to create an impact model,” said Niranjan of the early planning days.

Niranjan said that he had always been interested in “using fashion as the vehicle to promote microfinance.” Luckily for him, Devan already had experience with fashion, from graduating from fashion school to working as a consultant for various clothing brands. In fact, Devan had already pulled off an entrepreneurship venture of his own, specifically focused on hats, and that guided the two of them to ultimately deciding on MyClo centering around hats. But why hats?

“Hats don’t really have a gender construct to them,” said Devan when describing their decision process. “It’s a versatile piece. If we go with an adjustable hat, we open up the availability to everyone else. We need to start with that crown, with that piece that makes you proud to be who you are.”

Using their own money from savings and previous work, Niranjan and Devan launched MyClo, with the dual purposes of making hats and using the loan structure to build a community for entrepreneurs.

 

How it works:

With each MyClo purchase, a $10 microloan is generated for an American entrepreneur. These microloans are collected for two weeks, and at the end of the fortnight, Niranjan and Devan aggregate the loans generated by the sales and personally choose the entrepreneur benefiting from the loans through Kiva Zip. Afterwards, the entrepreneur pays MyClo back, and the returned loans make their way into the hands of a new entrepreneur.  So far, five entrepreneurs have benefited from MyClo loans, including to a store that suffered a devastating robbery and to a family-style Mexican restaurant. This model is powered through Kiva Zip, a mobile-to-mobile zero interest payment platform that works with American entrepreneurs.

As of yet, no entrepreneur has defaulted on their loan, but MyClo isn’t blind to the possibility. According to Niranjan:

“It’s the reality of the world, right? In entrepreneurship, the odds are really stacked against you. The most you can do is help an individual, create a community, surround them, and support them. We would notify our customers and let them know that the loan defaulted. I wouldn’t necessarily say that’s a failure on the customer’s part, on our part, or the entrepreneur’s part. That’s just the way entrepreneurship works. That’s the reality. So for us, when the money comes back, we were going to give the money out to someone else anyway, so it’s not like we are losing something from it.”

Photo courtesy: MyClo
Photo courtesy: MyClo

Successes and Outlooks:

Prior to the interview, MyClo had already sold out of the maroon line of hats, but this isn’t the only marker of success to the founders.

“So far, success has been that positive reception from entrepreneurs because at the end of the day, they’re the ones that we really want to help and they’re the ones that matter to us most,” said Devan.

Of course, the road to a successful enterprise hardly runs smooth, from the many iterations that a business model can go through to building an online presence.

“We’re e-commerce only, and as an e-commerce company, your biggest obstacle is going to be how you get your company’s face in front of a customer and how you get a conversion. That’s the biggest problem, for most e-commerce companies–finding that space and creating a customer dialogue early on and online,” said Niranjan, adding that Instagram, Facebook ads, and Mailchimp have been instrumental to their success so far.

 

Next steps:

Not many social enterprises focusing on microfinance for Americans are currently operating in the United States, which makes MyClo a fascinating company to watch, especially considering their long-term ambitions.

“We’d love to see our dreams of community realized,” said Devan. “We’d love to be really impacting and fulfilling entire loans, multiple loans, for entrepreneurs. So something goes up on Kiva and we can just fulfill it. ‘I need 10 grand for my new oven, I make pizzas.’ ‘Okay cool, here’s your oven.’ That would be”—

“The dream.” Niranjan interjected. 

Photo courtesy: Myclo
Photo courtesy: Myclo

With that kind of entrepreneurial spirit (and enthusiasm for Mexican restaurants and pizza ovens), hats off to Niranjan and Devan! Check out their hats here, and keep an eye out for them at various pop-up events in the Bay Area.

 

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Flickr/CC/Pictures of money

By Beatrice Loh

Competitions are a great way for new social startups to gain experience and funding. Often, many of these competitions also give mentorship opportunities with experts from relevant fields to help social enterprises develop their ideas and strategies. Prizes are attractive, with most competitions offering large grants that can help kick-start a social initiative. Even if unsuccessful, competitions offer social startups the chance to develop their business strategy in more detail and are great for networking and learning from more successful social enterprises.

Here is a list of 5 competitions in Asia that social enterprises should watch out for:

 

  • DBS-NUS Social Venture Challenge

The DBS-NUS Social Venture Challenge is an Asia-wide competition for social enterprises, open to any member of the public. It is organized by NUS Enterprise, the National University of Singapore’s (NUS) business incubator, and the Development Bank of Singapore (DBS) Foundation, a corporate foundation solely dedicated to championing social entrepreneurship in Asia. The Challenge aims to identify and support new social ventures that have the potential to generate positive, scalable and sustainable social impact.

Participants are supported and mentored by some of the most experienced practitioners in this field through workshops held across Asia for two months. Aspiring social entrepreneurs will be equipped with tools to model, test and get valuable feedback on their idea, with the help of mentors. Shortlisted semifinalists are given the opportunity to travel to Singapore for mentoring and coaching with experts before facing the semifinal and final rounds of judging.

The grand prize of the competition is SGD $100, 000 in seed funding. The first and the second runners-up will receive seed funding of SGD $30, 000 and SGD $20, 000 respectively. Finalists and winners will receive priority consideration from partners of the competition for post-competition support, which may include mentorship, incubation or even further funding.

With prizes and meaningful networks, the DBS-NUS Social Venture Challenge Asia will increase the impact of winning entries and is a fantastic learning experience for all participants.

For more information, visit the website.

 

  • Asia Social Innovation Award

Asia Social Innovation Award (ASIA) was launched in 2008 and aims to promote social entrepreneurship and business 2.0 concepts in Asia through a social innovation idea competition. This competition is unique because it provides a platform for idea-stage entrepreneurs to kick-start projects through cross-country networking and expertise exchanges – that means the competition is mainly for ideas and concepts, rather than established companies.

The competition is organized by Social Ventures Hong Kong (SVhk), Hong Kong’s first non-profit venture philanthropy organization. SVhk provides financial and non-financial support to social enterprises as part of its dedication to nurture social innovation. It is co-organized by ChangeFusion, a Bangkok-based organization that grows social entrepreneurs for creative and sustainable change, and Social Enterprise Insights (SEI), the first Mandarin-based online information platform about social enterprises and social innovation from Taiwan.

After participants are shortlisted by region through a “Best Social Start-Up Idea” competition, they are invited for a coaching session in Hong Kong where they will have the opportunity to sharpen their idea and business model. Winners are chosen according the creativity, social need solubility, feasibility, sustainability and scalability of their idea.

Each regional award winner will get HK$ 2,000, and the Grand Award of Social Innovator will get an additional HK$ 2,000. Although the prizes are not as great in value as some of the others on this list, this competition is a great opportunity for social entrepreneurs who are merely in the idea stage to get their ideas validated and to network.

For more information, visit the website.

 

  • D-Prize

D-Prize is a unique competition for social entrepreneurs because it focuses on the distribution of poverty solutions, rather than the creation of such solutions. According to the organizers of this competition, the world has already invented many effective poverty solutions, but most fail to reach actual people in need.

D-Prize set a list of distribution challenges and asks interested parties to design a new social enterprise to solve them. If selected, winners can get up to US$20, 000 to launch a pilot in a developing region. D-Prize will award 5 – 15 social entrepreneurs funding. If the pilot is successful, D-Prize will help them to find future funding to grow the project to impact millions. Although existing organizations that want to pilot new distribution-focused initiatives may apply, if the enterprise is over 12 months old, has already raised more than US$ 100, 000 and is not piloting a new distribution-focused initiative, D-Prize is unlikely to offer funding.

Although the competition is not restricted to the Asian region, the distinctive focus on distribution solutions means a higher impact on the targeted groups, and is a competition worth considering for social enterprises all around the world.

For more information, visit the website.

 

  • Genesis

Genesis is a social entrepreneurship competition that aims to bring together students, entrepreneurs, NGOs, innovators, incubators, corporates and financers and to create a holistic platform for the initiation and development of exemplary social enterprise models. Genesis has been recognized in a study by Georgetown University as being one of the premier competitions of its type for its reach, as well as for the ideas generated through the exercise.  As India’s biggest social entrepreneurship competition, most entries are local, although its reach has expanded over the years.

Spread over 6 – 7 months, Genesis provides a stage for those interested in the social entrepreneurship field to develop their innovations and business ideas in detail, receive mentorship, network and have a chance of winning seed money to launch their projects. Cash prize money for the competition is Rs. 400, 000, and participants are also given a formal introduction to a team of angel investors for further funding opportunities. As part of the competition, finalists have extensive mentoring for a duration of two months.

Genesis hopes to encourage business ideas that can bring about radical improvements, catering to specific problems faced by society. The competition also gives participants a chance to build a community with an extensive network to like-minded people through which they can find partners, mentors and financers.

For more information, visit the website.

 

  • TATA Social Enterprise Challenge

 

The TATA Social Enterprise Challenge is a great opportunity for India-based startups. TATA Social Enterprise Challenge is a joint initiative by the TATA group and the Indian Institute of Management Calcutta (IIM Calcutta). Based in India, the Challenge aims to find the country’s most promising social enterprises. The competition also aims to raise awareness for social entrepreneurship and encourage youth to join the sector as the next generation of social entrepreneurs.

The TATA Social Enterprise Challenge targets social entrepreneurs at the earlier stages of creating a social startup. It invites those who either have an early stage venture or an idea with a proof of concept to participate. The proposed venture needs to have sustainable business model that will create social impact. Shortlisted participants will be invited to attend a 3-week mentorship program, which includes instruction at the IIM Calcutta campus.

Social entrepreneurs identified through the competition will be offered mentorship support, awarded cash grants and have an opportunity to pitch for funding and incubation at IIM Calcutta. The top 3 winners of the competition will receive up to Rs. 200, 000 each to be invested into their ventures.

For more information, visit the website

 

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Flickr/CC/The Tax Haven

By Zarreen Kamalie

In the age of social entrepreneurship and innovation, one of many hurdles is funding. Good news is that there are many options for the dedicated social entrepreneur; with social venture capital is being just one of them.

What is Social Venture Capital?

Social venture capital is a form of investment funding.

Social enterprises often find it challenging to acquire funding for cause-based business models where profit is not the main aim. Social enterprises are in a strange limbo state where they are not treated as one-track profit-geared businesses in the investment game, but at the same time do not always qualify for donation and foundation based funding meant for NPO’s and charities.

This is where social venture capital comes in.

Social venture capital usually consists of a group of social venture capitalists or an impact investor looking for an enterprise that can not only function effectively as a business but also deals with social issues efficiently and can result in great positive social impact. These firms evaluate their investment decisions by looking at financial profitability, business development and social mission success.

Acumen Fund is an example of a social venture capital firm. It focuses on solving problems of global poverty through loans and equity in India, Pakistan and South Africa. The firm is mostly inclined to fund social enterprises in either the agriculture, education, energy, health, housing or water sector.

Though unlike crowdfunding, social venture capital requires financial return so the pressures for social venture invested social enterprises to succeed are much higher.

These forms of investment are typically involve giving a social enterprise an initial sum of money, known as ‘seed-funding’, to get them on their feet and grow.

How is it done?

Social Venture Capital firms tend to go for social enterprises that show growth and financial sustainability. Their goal is to effectively maximize the fund’s capital to deliver social impact.  

These firms typically work with Equity investments. Equity investment is money that is invested in a firm by its owner(s) or holder(s) of ordinary shares. However, this money is not returned in the normal course of the business, but rather only when they sell their shareholdings to other investors, or when the assets of the firm are liquidated and proceeds distributed among them.

This is why social venture capitalists often have very precise criteria when looking to fund social enterprises. The risk is usually very high, meaning that any investment needs to be a smart investment.

What Do Social Venture Capitalists Look For?

According to PWC, there are four major points to consider when making your social enterprise attractive for venture capital. These are:

1) Alignment between financial and social objectives:

Social enterprises need to be a convincing blend of an effective social mission, with an efficient business model. The two aspects are expected to complement and support one another in order to secure financial return to expand the enterprise’s impact.

2) A well-run management team:

Investors tend to trust a productive social enterprise team, rather than a social entrepreneur on their own. It seems reassuring to have multiple people invest time and effort, leaving room for them to breathe and ensuring there are people to stay around when the going gets tough. A good balance of complementary skills is also attractive to investors. Crowdfunding and angel investors are more likely to fund an individual, but in general investors are more likely to invest in a team.

3) Measure your impact:

Investors are aware that a lack of resources is one of the reasons that social enterprises struggle with this. This one is quite tricky, but the expectation is that this requirement will help social enterprises hone in on their objective. Some investors place less emphasis on it, but will still look for ways to measure impact while acknowledging the value of the mission. The maturity of the organization is one way to measure impact, but this can be troublesome if the enterprise is still starting out.

4)  Avoid mission drift:

Stay focused on the main objective. Investors will not be happy if the aim of enterprise for which they funded you changes dramatically. This is one of the factors that investors consider when faced with potential long-term investments. Mission drift usually occurs after a few years, generally with new leaders or owners. Avoid if possible when operating within the guidelines of the investor.


Pros and Cons of Social Venture Capital

Pros:

  •      Quick and sufficient funding for large projects
  •      Social venture capitalists often give guidance for new entrepreneurs
  •      Incentivizes the organisation of the social enterprise such that there is less stress in the long run
  •      No repay schedule, while financial return is required, it can be done within the business’ own time

Cons:

  •      For new start-ups, the criteria may be quite challenging to meet
  •      There is the expectation of financial return, something which does not occur with crowdfunding
  •      There is a lack of control, as is seen with the warning against mission drift. The mission becomes partially dependent on the investor.

Social venture capitalists can be quite inaccessible for young social enterprises and entrepreneurs, and the amount of control involved can be undesirable for some. There are other forms of investment such as Angel investment and venture philanthropy. These have the benefits of immediate and large sums of money, but on the basis of the social networks and capital of the social entrepreneur. Crowdfunding remains an accessible form of funding for newcomers to social economy, with no strings attached while increasing awareness. Ultimately, it is up to the social enterprise to decide which form of funding is best suited to their mission and the nature of their work and management team.

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Flickr/CC/Rocío Lara

How Africa’s ‘Brain Drain’ Could Be the Key to Successful Crowdfunding

By Zarreen Kamalie

 

The migration of skilled peoples from Africa to other, often more developed, parts of the world is not phenomenally new. Currently there are conflicting claims on whether the migration of skilled professionals is coming or going, but it most certainly has not died out. This loss of skills and professionalism has been termed, the African ‘Brain Drain’.

On the other hand, the migration of professionals and skilled persons from Africa has resulted in a growing diaspora that contribute to a substantial platform of potential investors for social enterprises based in Africa. Lack of access to investment from local banks is a common problem for small businesses and ventures, such that crowdfunding appears as an increasingly attractive alternative. Crowdfunding is the practice of funding a project or venture by raising monetary contributions from a large number of people, typically via the internet. This could mean that Africa’s brain drain could help provide the right conditions for social entrepreneurship. These financing techniques are fostering an interest in Africa not only as a place to invest in but also, ironically, as a destination for African migrants who once felt they had to leave for greener pastures.

Flickr/CC/Rocío Lara
Crowdfunding – Flickr/CC/Rocío Lara

 

Dr. Menghis Bairu, founder and CEO of Serenus Biotherapeutics, is convinced that “it’s not just a matter of attracting African expatriates home”. That instead, we should also be working to “attract talented professional from developed nations who have a passion for the continent and find rewards in being challenged to build, contribute and grow”. Crowdfunding, or as later explained, ‘crowd investing’ is quickly becoming a globally accessible means to not only engage with enterprises in Africa but to engage with the formation of the new social and professional landscape itself.

Yet, there still remain a number of obstacles that impinge the impact that crowdfunded social enterprises could have on the continent. According to

Laura DeLuca, PhD, assistant professor of Environmental, Peace Studies and Social Entrepreneurship at Naropa University, these are the occurrences of prominent African social entrepreneurs that move to the West after attending accelerators or incubators, contributing to the African Brain Drain. As well as low bandwidth and unreliable electricity that jeopardise access to entrepreneurial resources on the Internet, and lastly, the fact that crowdfunding through Internet platforms has not become firmly entrenched in entrepreneurial practice in Africa. DeLuca is convinced that crowdfunding, or raising monetary contributions from a large number of people, typically via the Internet, is a foreign concept in many parts of the African continent.

Though this is not to say that crowdfunding has not made its mark in Africa. Cameroonian Georges Badjang and his honey production business, Les Mielleries may never have been able to take off if it wasn’t for crowdfunding platform BlueBees. After his local bank turned him away, Badjang was able to acquire the appropriate funds through the platform that specializes in entrepreneurs from developing countries, connecting them with investors from Europe. Other platforms, including Fadev and Babyloan, have begun to offer opportunities for small African businesses by accessing the African Diaspora as a source of potential investors. This technique of targeting the African Diaspora has also been employed by Elizabeth Howard, co-founder of Lelapa Fund, an organisation that targets Africans living abroad who want to invest in and support projects “back home” identifies the platform as ‘crowd investing’.

“the best investors in Africa are Africans themselves”

Howard seems to believe that, unlike European investors or contributing parties, members of the African diaspora perceive fewer barriers to involving themselves with African projects than foreign investors. South African investor Patrick Schofield further iterates her point, stating that “it is no coincidence, said, because it is not easy to work directly out of Africa…[and] it can be expensive sending money to Africa and there is also uncertainty as well”.  Howard explains the incentive behind ‘crowd investing’ with the statement, “the best investors in Africa are Africans themselves”.

 

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Flickr/CC/Cristian Carrara

A Checklist for Young Entrepreneurs

By Pia Chatterjee

The thing about social enterprise is that everyone likes it – no soul-possessing human being would ever sweep an idea of the like aside for fear of being called a monster. But the market of social enterprise is two-sided, with the other side being strictly business. The problem with social enterprise is that it sounds fantastic, but may not necessarily stand as a business venture once set up. What you can do to fix this glitch is commonly known as idea validation. The process only serves to ensure that along with thinking your idea is perfectly rosy, people would also be ready to spend their hard-earned money on it.

Here are a couple of steps you can take to validate your well-meaning business idea.

  1. Evaluate your own idea. Would you be willing to buy your own product? Ask yourself what you’re aiming to achieve with your product and be sure to define the problem you’re hoping to solve. List all the benefits you think can come of what you’re expecting to produce, enumerate how it’s any different from what already exists in the market, and perform a SWOT analysis to consider the strengths, weaknesses and functioning of your idea.
  1. Don’t hesitate to share your idea. Make the most of existing social networks (in terms of technology and the more old-school kind) and persist in asking people what they think – whether they think it’s a good idea, how viable they think it would be, whether they would personally buy your product, and how much use they would have for it over the short and long-term. Do surveys, ask for detailed and honest feedback, and be sure to ask what exactly needs to be changed about your idea to be worth your friends’ money.
  1. Check how products like yours are doing on the market. Many people consider innovation and originality to be the most important selling points of a product, but one of the most important uses of healthy competition is that you’re freely supplied with perfect prototypes. Evaluate how similar products (If they exist) are doing in the wild and gauge how yours could potentially do in the future.
  1. Base or mould your idea on demand that already exists. While undoubtedly, an idea that hasn’t sprouted from what people already want could also be hugely successful, the chances of big sales are higher basing products off of something that people already want. In any case, it is always advisable to incline your product to best suit what people are asking for.
  1. Create a prototype. The best way to test the success of your product is to proceed literally. Creating a semi-complete version of your product is advised to put it into the water and see if it stays afloat. This kind of beta-testing need not take place on a particularly large-scale, but helps to bring reality to your idea and gives you a tangible sense of what the reaction to it is likely to be if you choose to invest fully in it.
  1. Crowdfunding. Don’t hesitate to use platforms like crowdfunding that directly involve consumers who will potentially buy your product. Networks like these immediately indicate whether people would be willing to separate themselves from their money for what you’re selling. In any case, given the extra headache funding proves to be, the free money doesn’t hurt either.
  1. Don’t be a miser when it comes to advertising. Paid advertising is one of the most effective methods to send out feelers into the consumer community. Most entrepreneurs invest in advertisements on Facebook or other popular sites to try and not only put their ideas out into the world but also let these sites do their magic and send the ads to audiences best suited to them. You can even put your product or idea in newspapers or on Craigslist even if it doesn’t exist yet, just to get an idea of how many people would be interested enough to respond.
  1. Bring experts, consultants and people in the industry into the picture. While social enterprise and innovation are both undoubtedly novel industries, there do exist experts in the field ready to be consulted and give you sound advice in areas you may not be as comfortable in. Be unafraid to contact people of the like to know where your idea stands in the realm of social enterprise and whether you’ve struck the right balance in this hybrid form of venture.
  1. Sell before you produce. Especially if this is your first step out into the business world, take orders and payments for your product before you begin production. This is often undertaken by businesses, the Dutch company Fairphone for example, to be better safe than sorry. The idea is to minimize (or rather completely eliminate) overproduction at the early stages of business when you can’t afford to make those kinds of losses.
  1. If possible (and applicable), take a look at online sale websites, Google trends, and other indicators that list the best-selling items on the market. They provide quick and easy insights into the most demanded types of products and the types of industries that are popular in the world today. With some intuition, you can even discern what characteristics of these items you could incorporate in your own to make it as desirable as possible.

 

In any case, continuously assess yourself and trust your gut. No matter what the ultimate consequence of your actions, your trajectory will provide an extremely valuable business experience that will only serve you well in the future.  

 

 

 

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Flickr/CC/www.SeniorLiving.Org

By Laura Manent

 

In a society where having a bank account becomes a necessity when it comes to paying your taxes or getting a job, two friends transformed quite a utopia into an actual service born on 11 February 2014 in France.

Ryad Boulanouar, a technician, and Hugues Le Bret, working in finance, partnered to create an alternative banking service destined to the more than 2.5 million indebted French citizens who have been banned from holding a bank account.

Feel free to use this image, just link to www.SeniorLiving.Org This photo I expressed the current trend in the US. Tighten you belt. I am spending a lot of time with my pigs.
Flickr/CC/www.SeniorLiving.Org

The so called “Nickel account” can be opened in any of the 1062 tobacco shops partnering with Nickel in a few minutes. What you need : an identity card, 20 euros and proof of address.

This account allows to withdraw cash almost for free everywhere in France and abroad, and you can make deposits directly in your local tobacco shop. Nickel does not allow any deficit, constitution of savings, and does not grant loans. However, the big difference is that you are not subject to any income conditions for the opening of your Nickel account!

This is where the big innovation is: anyone banned from holding a real bank account because of existing debt can open a Nickel account for around 20 euros per year, and will thus be provided with an international Mastercard to pay for transactions and withdraw cash, and a Bank Identification Code, necessary to do so many things, specifically make transactions online.

Even the tobacconists get something out of this partnership: they earn 3 euros overtime someone opens an account, as well as when they deposit or withdraw cash.

Flickr/CC/Pictures of money
Flickr/CC/Pictures of money

This account looks like a little revolution in a world where any financial difficulty can lead to an exclusion of society. As Hugues Le Bret said in an interview, 25% of the owners of a Nickel account have no job or regular revenues.

But by providing a simple, low-cost banking alternative, Boulanouar and Le Bret attracted not only those excluded from the traditional banking system but also clients with medium incomes in need of control over their resources and people needing a simple account for common costs. Because with a Nickel account, you get informed in real time about what is going on with your finances. You cannot risk indebtedness. You cannot be banned.

The enterprise just created an account for young people between 12 and 18 and now projects to open one dedicated to very small companies.

Nickel is definitely changing the way we perceive the banking system.

 

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Flickr/CC/williamson

By Minji Hong

What do you consider when choosing which airline to book your flight to your next holiday destination? The airfare? The in-flight meals? The in-flight entertainment? Well, how about their eco-consciousness? Did you know that airlines too can adopt their operations based on principles of environment-friendliness as well as ethics? Notably, these 5 airlines based in the Middle East have set up and led various charitable projects and foundations in order to contribute to pressing causes in the region and beyond.

Etihad Airways (Abu Dhabi, U.A.E.)

Flickr/CC/Curimedia
Flickr/CC/Curimedia

The second largest airline of the U.A.E. based in Abu Dhabi began its operations throughout the globe in 2003, and quickly rose to prominence, recently claiming the title as World’s sixth best airline in 2015. Moreover, on February 2015, the airline was nationally recognized as the “Best Sustainability Communication Program” and “Sustainability Manager of the year” at the U.A.E. Sustainability Awards. Indeed, according to James Hogan, President and Chief Executive Officer for Etihad, it has “a commitment to putting sustainability at the core of its business.” The airline company is praised for its innovative “Together” strategy used to manage corporate responsibility, whereby the company strives to grow, work, give, and become greener together. Through this method, Etihad Airways aims to firstly incorporate a process of “Emiratization,” by strategically increasing the proportion of Emirati nationals in the workforce, through supporting various projects and companies such as the Al Ain Contact Center, the first company in the country to be operated solely by Emirati women. Then, it promises to commit to the professional development and well-being of their employees by, for instance, working with the Higher College of Technology in Abu Dhabi to provide a support system for U.A.E. nationals to improve their proficiency in English. Etihad is also committed to providing humanitarian assistance across the globe by supporting many local initiatives as well as conflicts abroad, such as the Syrian situation by working with the U.A.E. Red Crescent to donate blankets and other necessities to the refugees. Last but not least, the airline has proven to have reduced about 24 percent of carbon emissions since 2006 by launching and leading several initiatives to improve fuel efficiency, for example.

 

Qatar Airways (Qatar)

Flickr/CC/Aero Icarus
Flickr/CC/Aero Icarus

With its headquarters in Doha, not only is Qatar Airways the Airline of the Year in 2015, but it is also leading the aviation industry through its influential environmental and social projects. First of all, the airline aims to enhance fuel efficiency by adopting a fuel optimization program, which involves implementing innovative methods to reduce carbon emissions. However, Qatar Airways’ key influence lies in its support in social, especially educational causes. In 2013, the airline pledged its collaborative work with the “Educate a Child” initiative to spread awareness of child education by taking advantage of the airline’s global reception as a communication platform. Moreover, the airline supports a non-profit organization geared towards improving the lives of children with brain tumors, and in 2008 was also invested the relief work towards the victims of the earthquake that hit the Sichuan province in China.

 

Royal Jordanian (Jordan)

Flickr/CC/Aero Icarus
Flickr/CC/Aero Icarus

Based in Amman, Royal Jordanian is an airline that is particularly active in launching and implementing various up-to-date initiatives to support social causes and by engaging in partnerships with influential organizations. For example, in light of the October as the month of breast cancer awareness month, in addition to introducing gift items promoting the breast awareness campaign that ensues the airline’s social corporate responsibility role as a supporter of the King Hussein Cancer Foundation, it hosted a “Think Pink” day at its headquarters. Also, the airline commits to an annual campaign for Ramadan by integrating it into its corporate social responsibility and enhance interaction with the local community, which concludes with an iftar for the underprivileged, and a delivery of boxes of aid to the estranged. The environment is also a great concern and of great importance to the corporate responsibility of the airline. Indeed, the airline’s Environmental Management Plan that includes policies to recycle, is one of the most responsible in the aviation industry.

 

Emirates (Dubai, U.A.E.)

Flickr/CC/Robert Orr
Flickr/CC/Robert Orr

Since its inception in 1985, Emirates is the largest airline in the U.A.E. and has been competing for the best service in the air. Its contributions to social causes also soar to match its high level of quality of service . These efforts culminated with a creation of a foundation managed under the airline dedicated towards humanitarian, philanthropic aid and services especially for underprivileged children all over the world. In addition to providing a platform for its global base of passengers across the world to donate funds, Emirates has launched and given support to several projects over the years geared towards specific issues, such as the IIMPACT Girls Education Project in India as well as different conservation projects in Dubai and in Australia to show its commitment to sustainability.

 

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