Making csi matter csi & hybrid models - b evans

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The relationship between CSI and hybrid models for development

The relationship between CSI and hybrid models for development

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  • 1. The Relationship Between CSI and Hybrid Models for Development Insights and perspectives GREATER GOOD SA is a registered trust, PBO and NPO in the GreaterGood group. GREATER CAPITAL 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. © GREATER GOOD SA 2010. Trialogue– May 2011
  • 2.
    • 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
  • 3. 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 SOCIAL PURPOSE ORGANISATIONS COMMERCIAL PURPOSE ORGANISATIONS Charities Revenue generating social enterprise Social 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
  • 4.
    • 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
  • 5.  
  • 6.
    • 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
  • 7. Some Examples
    • Bulungula Lodge and Incubator
    • Silulo Ulutho Technologies
    • Shonaquip
    • Small Enterprise Foundation
    • Phakamani Foundation
    • Books of Hope
    • The Big Issue
    • Johannesburg Housing Company
  • 8. Different forms of Finance ROI Expectations Financial Risk appetite Low No financial return Moderate Return ++ Capital return High Fixed income funds Debt / Bond issues Secured loans Equity Some microfinance Venture capital Social venture capital Non-profit growth capital Patient capital Grants Unsecured loans Overdraft facility Quasi-equity Recoverable grants Guarantees Low interest rate loans Guide to Finance for Social Entrepreneurs | © GreaterCapital | 2011
  • 9.
    • 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
  • 10. Innovation
  • 11.
    • Microfinance
    • Alternative banking solutions
    • Life insurance
    • Unilever
    • Cobb
    • Sandbag Housing
    • Affordable Private Schooling
    • Affordable Private Healthcare
    • Energy saving innovation
    Innovation
  • 12.
    • Companies looking for new revenue streams through low income markets
    • Core business discussions
    • Seem to exclude input from CSI or ED
    Inclusive Business Discussions
  • 13.  
  • 14. 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 SOCIAL PURPOSE ORGANISATIONS COMMERCIAL PURPOSE ORGANISATIONS Charities Revenue generating social enterprise Social 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
  • 15.
    • 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
  • 16. My Dream