1.
SOCIAL ENTERPRENEURSHIP AND VENTURE PHILANTHROPY ALI SALMAN Training Workshop at LEAD [email_address] 2 nd November 2007

2.
OUTLINE <ul><li>SOCIAL ENTREPRENEURSHIP </li></ul><ul><ul><li>CONCEPT </li></ul></ul><ul><ul><li>CHALLENGES </li></ul></ul><ul><ul><li>CASE STUDY </li></ul></ul><ul><li>VENTURE PHILANTHROPY </li></ul><ul><ul><li>CONCEPT </li></ul></ul><ul><ul><li>CHALLENGES </li></ul></ul><ul><ul><li>CASE STUDY </li></ul></ul>

3.
SOCIAL ENTREPRENEURSHIP <ul><li>Entrepreneurship </li></ul><ul><ul><li>Creation of Value AND Wealth </li></ul></ul><ul><li>With Social Entrepreneurship…. </li></ul><ul><li>Product, becomes </li></ul><ul><ul><li>Pro Poor </li></ul></ul><ul><li>Market, becomes </li></ul><ul><ul><li>Bottom of Pyramid (the 5 billion market) </li></ul></ul><ul><li>Bottom line, becomes: </li></ul><ul><ul><li>Double (Access to Poor and Return to Shareholders) </li></ul></ul>

4.
More on Concept-SE <ul><li>Pro Poor is not a low-priced edition! </li></ul><ul><li>Its about a new price-performance relationship! </li></ul><ul><li>In most of BoP, shortage of talent exists, therefore work must be deskilled. </li></ul><ul><li>Source: C.K. Prahald, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits </li></ul>

5.
Basic Economics <ul><li>Small Unit Packages (?) </li></ul><ul><li>Low Margin per unit </li></ul><ul><li>High Volume </li></ul><ul><li>High Return on Capital Employed </li></ul><ul><li>Source: C.K. Prahald, The Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits </li></ul>

6.
Marketing Strategy <ul><li>Don’t just sell a product; sell value! </li></ul><ul><li>Invest heavily in education of customers. </li></ul>

7.
PARADIGM SHIFT <ul><li>By its very nature, success in BoP market will break existing paradigms (Grameen). </li></ul>

8.
TRENDS <ul><li>HOUSING FOR THE POOR </li></ul><ul><li>THAR DEEP: WATERING IN A CONSERVATIVE WAY </li></ul><ul><li>MICRO FINANCE </li></ul><ul><li>RENEWABLE ENERGY </li></ul><ul><li>INEXPENSIVE LAPTOPS AND ICTS </li></ul><ul><li>CHECK OUT: www.nextbillion.org </li></ul>

9.
Break <ul><li>Questions and Discussions </li></ul>

10.
CASE STUDY: PANI GHAR <ul><li>Concept </li></ul><ul><li>Pilot </li></ul><ul><li>Challenges </li></ul><ul><ul><li>Winning trust of a sizable customer base </li></ul></ul><ul><ul><li>Creating Local partnership </li></ul></ul><ul><ul><li>Delivering Service </li></ul></ul>

11.
Key Lessons and Risks <ul><li>Market Size: Buying Intent Estimation can go wrong as poor customers may mix up between need and demand. </li></ul><ul><li>New Markets: Social Entrepreneurs find it hard to ‘sell’ those products, which have remained either free or under-priced. </li></ul><ul><li>Buying Power: Purchase power estimates can go wrong, as persons with lower income have higher tendency to hide their income. </li></ul>

12.
Key Lessons and Risks <ul><li>Unintended Beneficiaries: As Social Entrepreneurs, we might end up selling our products to non-poor. (P/G Experience) </li></ul><ul><li>Regulatory Risks: Regulator does not understand the grey area between for-profit and non-profits. (P/G experience) </li></ul><ul><li>Double Bottom Line: It implies additional accountability, which has costs. </li></ul>

13.
Risks Mitigation <ul><li>GO UP, CLOSE AND PERSONAL: Most of the risks are based on poor information about customers and weak communication systems. </li></ul><ul><li>TAX HOLIDAY/ TAX REBATE FOR SOCIAL ENTERPRISES: If corporate world can be offered monetary incentives for investment, then why not social enterprises? </li></ul>

14.
Break <ul><li>For tea, this time! </li></ul>

15.
VENTURE PHILANTHROPY <ul><li>Combination of Venture Capital Model with Philanthropy to create a viable and growing non-profit. </li></ul>

16.
CONCEPTS <ul><li>Deep Investment Analysis </li></ul><ul><li>Leadership </li></ul><ul><li>Relationships </li></ul><ul><li>Power of Networks </li></ul><ul><li>Making the Greatest Impact </li></ul><ul><li>Funding What Others Do Not </li></ul><ul><li>Performance </li></ul><ul><li>Strategic Assistance </li></ul>

17.
TRENDS <ul><li>QARSHI FOUNDATION </li></ul><ul><ul><li>Health and Education </li></ul></ul><ul><li>CARE FOUNDATION (BAREEZE/SEFAM INDUSTRIES) </li></ul><ul><ul><li>Education </li></ul></ul><ul><li>ALI FOUNDATION (PACKAGES) </li></ul><ul><ul><li>Culture </li></ul></ul><ul><ul><li>Education </li></ul></ul>

18.
Break <ul><li>Any questions? </li></ul>

19.
Venture Philanthropy <ul><li>Case Study </li></ul><ul><li>Why I have chosen SKMT? </li></ul><ul><li>SKMT has become a sustainable organization, and is a significant player in the cancer treatment. </li></ul>

20.
VP: PRECONDITIONS <ul><li>Charisma </li></ul><ul><li>Alternative to Charisma? Deep and prolonged personal commitment of the leader </li></ul><ul><li>Trust </li></ul><ul><li>Team </li></ul><ul><li>Initial Capital/Seed Money </li></ul><ul><li>Must adhere to a real problem and propose a real solution </li></ul><ul><ul><li>Can we define ‘real’ being in terms of money? </li></ul></ul><ul><ul><li>“ A Real Problem is one for which a solution is provided, people are ready to spend money.” </li></ul></ul>

21.
VP: Launching Pad <ul><li>International Quality Standards </li></ul><ul><li>Wide and diverse resource base (over a million donors in mass contact in 1994-95 contributed 120 million rupees i.e. 120 per person!) </li></ul><ul><ul><li>Revenue from treatments </li></ul></ul><ul><ul><li>Zakat </li></ul></ul><ul><ul><li>Donation </li></ul></ul><ul><ul><li>Other Income </li></ul></ul><ul><ul><li>Started with a base in Zakat and Donations; now Revenue is almost equal, if not more, than Zakat and Donations combined. </li></ul></ul><ul><li>Public Attractions (Fund Raising Programmes) </li></ul><ul><li>Technology (SMS, E Banking) </li></ul>

22.
Skaukat Khanum: Revenue Base

24.
VP: Getting Results <ul><li>Institutional Capital </li></ul><ul><ul><li>Long term vision </li></ul></ul><ul><ul><li>Very well paid (above market) staff </li></ul></ul><ul><li>Knowledge Platform </li></ul><ul><ul><li>Which Cancer Patient should be given a priority is a decision governed by the probability of cure and recovery. </li></ul></ul><ul><li>Sustained and High Quality Pro Poor Welfare System </li></ul>

25.
SE AND VP COMPARED NATURE INVESTMENT INCENTIVES PRICING PRODUCT MARKETS RESULTS SOCIAL ENTERPRISE FOR PROFIT OWN+ LOAN+ EQUITY SALARY + SHARES NOT FREE TAILOR MADE BOTTOM OF PYRAMID *ACCESS TO BOP *PROFITS VENTURE PHILANTHROPY NOT FOR PROFIT OWN+ CHARITY SALARY + BONUS VARIES STANDARD BOP PLUS RICH *SUSTAINABILITY

26.
AT CROSS ROADS <ul><li>Microfinance and Health Care: The Coming Convergence </li></ul><ul><li>Socially Responsible Funds </li></ul><ul><li>Managing NGOs with Venture Philanthropy Models. </li></ul>