Social Business fund guideline

12010-07 YC project presentation Template.potx
Creating a world without poverty
“Social Business Fund” Setup
Guidelines

Social Business Funding
To support the Growth of Social Business it is important to create a number of supportive investment funds
which:
•Study and evaluate new social businesses, measure their effectiveness in pursuing social goals and their financial
and management efficiency
• Serve as clearinghouses for information and ideas about social business, so that their managers will be leaders
in the social business world.
• Help create a common vocabulary and set of measurement tools for defining success in social business.
•Make it easy for prospective social business investors to identify worthwhile companies.
•Provide a vehicle for instant diversifications of social business investments: a single social investment fund
should be able to support numerous social businesses.
Expense Structure of Social Business Funds:
•Annual management fees that allows changes in the companies receiving equity from the fund.
•The terms of this fee has to be negotiated as part of the agreement between the fund and the social business.
• The fee is kept at reasonable levels
• Funds may waive the fee until the companies they invest in reach the break even point.

The Seven Principles of Social business:
○ Business objective will be to overcome
poverty, or one or more problems
(such as education, health,
technology access, and environment)
which threaten people and society; not
profit maximization.
○ Financial and economic sustainability
○ Investors get back their investment
amount only. No dividend is given
beyond investment money
○ When investment amount is paid back,
company profit stays with the company
for expansion and improvement
○ Environmentally conscious
○ Workforce gets market wage with better
working conditions
○...do it with joy

A. Social Business Funding Guidelines
Type of Financing The fund will provide all types of financing to social businesses, such as:
1. Equity 2. Loan
Financers: A financial institution will fund all types of social businesses initiated or operated by:
○Individuals ○ Any other type of organizations
○ Government ○ Foundations
○ Autonomous bodies ○ Private companies
○ International agencies ○ NGOs
How can the Social Business funds be used:
○ To set up new social businesses
○ To expand an already existing social business
○ To replicate a social business
○ To convert another entity into a social business

B. Social Business Funding Structure
Vision & Mission: Apart from funding an SB, they will be committed to invest all nominal profits to other SB
Investment even after wind-up.
Purpose of the fund: Financial and non financial goals
Target Market: Elementary social needs focusing on education, health, housing, renewable energy, technology
access, environment and agriculture
Type of investments sought
- grant, loan, equity
C. Social Business Market Analysis
-Identify Investors -Provide application assistance
-Analysis of potential investors -Plan a competition or opening event
-Develop a marketing strategy to reach investees -Partner with local organizations
D. Social Business Legal and Tax Structure
-The fund will follow local law of the country where it operates and be subject to tax implications
-Registration of Social business fund:
1. By setting up a company under the Companies Act,1994
2. A company limited by guarantee under section 28B
-Money can be acquired by:
1. Grants 2. Subscription to shares 3. Loans
-A license might need to be obtained

E. Social Business Investment Process
i) Investment strategy:
•Debt vs. Equity
•Term and size of Investment
ii) Monitoring System:
•Financial and Social reporting requirements
•Stakeholder Integration process
iii) Exit Strategy Options:
F. Social Business Fund Management
i) Create an organizational structure
ii) Define roles and responsibilities
iii) Define relationship with investors
iv) Calculation of initial and ongoing costs (Management cost)
G. Social Business Fundraising
i) Determine target fundraising market
ii) Develop a fundraising strategy(Annexure : 01)

XY will be funded
with a specified
amount of BDT in
one or more
installments.
Whether the fund
will be provided
in advance or
reimbursed later
should be fixed
during approval.
XY has options for
project
implementation
by itself, through
collaboration
with relevant
organizations or
group of
individuals.
XY will send ……
copies of concept
note in a
prescribed format
to the S.B.
applicant. After
assessment on
the concept note,
XY will be asked
to apply for funds
through a formal
application. In
case of
reasonable
modification/alte
rnation in the
project proposal
the XY is allowed
to incorporate
changes in
consultation with
the SB fund
applicant.
A investment
committee will be
formed on behalf
of the SB
applicant which is
designated to
accommodate
advisory services
in activities of
THE FUND. As
such, the
committee will
review concept
notes, evaluate
project proposal,
enlist potential
enterprises and
recommend to
CEO/MD for
approval. In
addition the
committee is
going to advice in
designing the
application from
and other
relevant
formalities.
The Managing
Director after
weighing
recommendation
of the committee
will recommend
the Investment
Committee to
approve concept,
sanction THE
FUND.
The investment
committee shall
be kept updated
periodically.
Develop
Memorandum of
Understanding
(Annexure: 02)
SB funding procedure-an example:

Project Implementation
Key milestones to be achieved:
- Pre-launch conditions as agreed - Business plan
- Structure definition - Feasibility studies
- Team building - First loan being issued
- Fund raising presentations - Memorandum of Understanding (MoU) signing
Identifying possible sectors of social businesses
- Healthcare - Renewable energy
- Nursing - Education
- Housing - Training
- Agriculture - Environment
- Information and Communications Technology - Nutrition
- Microfinance - Sanitation
- Insurance - Safe drinking water
- Women Empowerment - Children’s welfare
- Welfare of the Elderly
- Or any other sector approved by the board

Replicating Existing Projects:
The Fund may start its operation by financing wider replication of already tested social business projects.
This will be safest and easiest way to get moving. Such projects are:
- Water – Treatment and distribution of Drinking Water to the poor, education regarding the use of clean
water in daily life.
-Nutrition –Provide fortified foods and beverages for the malnourished
-Microfinance – Provide Loans, savings, insurance and other financial services.
-Renewable Energy- Provide solar home system for rural area at an affordable cost to meet basic energy
needs of the poor.
- Training: Provide the auto mechanic training and create the employment opportunity for the poor
people.
- Nursing- Improve professional level employment opportunities for young women by providing world
class training facilities for a career in nursing.
- Healthcare Services: To ensure quality health care services within the affordable cost to the low-
income population at their door step.
- Agriculture: Increase income of rural farmers, Improve agricultural techniques
These approaches have already been pioneered by Grameen Danone, Grameen Veolia, Grameen
Bank,Grameen Intel, Grameen GC Eye care, Grameen Caledonian College of Nursing,Grameen-Japan
Automechanic, Grameen Shakti and GrameenYukiguni Maitake respectively in Bangladesh.

Annexure: 02
TEMPLATE & AGREEMENT FOR JOINT VENTURE SOCIAL BUSINESS FUND
This agreement entered as of _____201.., between Xy Ltd and Ab Ltd…….address: signifies the
establishment of a new joint venture to form a Social Business Fund (SBF). The primary purpose of this
fund is to provide a framework within which both parties can develop and undertake collaborative
activities in Bangladesh to alleviate poverty by various social business endeavors, following the 7
principles of social business as outlined by Prof. Muhammad Yunus.
PURPOSE
• Sharing knowledge, ideas, plans and activities in the areas of common interest related to poverty
alleviation.
• Pooling existing resources (eg. networks, investors, expertise, facilities, etc.) to mutual advantages.
• Maximizing development impact in poverty alleviation activities through social business initiative.
• Improving the integration of related activities through consultancy services.
Project Selection:
A strong project selection committee will screen the projects. The projects will be formulated mainly by
the applicants but the Fund may suggest improvements and elaborations. Ultimate responsibility of the
project formulation will rest on the applicants.

Annexure : 03
Questionnaire for Designing a Social Business Project:
1. Name and address of the entrepreneur/ proposer /designer with phone number and email address.
2. Self introduction (less than 500 words) of the proposer. If you are submitting this project proposal on
behalf of an organization or a company, please introduce it briefly (less than 500 words)
3. What is the primary social problem you want to address by the proposed social business?
4. What are the subsidiary social problems you want to address by this project?
5. What is the product or service this social business will be producing?
6 a. Are similar products/ services available in the market now? What are they, who are producing them?
(Mention three top products and their producers/suppliers).
b. What are the present market prices per unit of these products/services, if available in some from?
7. Give an outline of your actual project (Please outline what your company will do, who is it addressed to,
what will be the tentative price per unit, whether this will require any special
operational/marketing/production structure.
8. Give the business plan, including year-by-year projection, of capital cost, operational cost, number of
employees, annual revenue, profit/loss, etc.
9. Total project cost until break-even point is reached. (Capital cost, operational cost). Total accumulated
losses over this period. How many years will be needed to reach financial viability?
10. What are the amounts and sources of funds:
Equity:
Loans:
Others:
Total:

11. What are the highlights/innovative elements of this project?
12. What are the areas of caution/ concerns/ unknown features in this project.
13. What are you primarily looking for?
-Equity
-Loan
-Grants
-Mentorship
-Management
-Somebody to take this idea and create a social business company
14. Have you had any experience in running/designing/working/studying such a project? Describe your
involvement.
15. Are you familiar with the 7 principles of Social Business?
16. Are you ready to follow all the 7 principles by putting it in your company’s memorandum articles?
17. Is there any particular book, social business company/ writing/ speech/ conversation/ conference
that has inspired you to think about designing a social business?
18. What would be the marketing strategy of your product?
-Needs door to door marketing
-Usual marketing channels will do
-Needs special marketing (explain)
19. What part (if any) of your design is the most delicate/ critical/ difficult part of the design?
20. Does your design, to your knowledge, make the smallest production/marketing unit economically
sustainable?

21. What would be the primary indicators of the success of this social business?
22. What would be the secondary indicators?
23. How would you measure the impact of this social business? Would you have some rule of thumb to
measure it?
24. Any additional comments:
a. Business plan showing strategic and financial plan to meet social objective
b. Financial Plan reflecting operational viability and financial feasibility within a
specific numbers of years.
c. Method to measure impact of social business should be an inbuilt part of the
business plan ( Annexure: 04)

Annexure: 04
“Evaluation of Social Business Projects:
Group Information
1. Group No. :
2. Team Leader :
3. Rapporteur
Grading Codes:
A: Very good
B: Reasonable/workable
C: Weak
D: Poor/Unacceptable
Issues to be examined
(Grade each issue using the above grading codes)
A.1 Does the project clearly state the primary objective? And list the subsidiary objectives?
A.2 Is the product/service well-defined?
A.3 Does the business plan appears to be adequate and realistic?
A.4 Does the entrepreneur look dependable?
A.5 Does the project size look appropriate?
A.6 Does the break-even point look achievable?

Recommendations:
B.1 Good project. Ready for serious consideration
B.2 Needs improvements (suggest major areas of improvements)
B.3 Incomplete information. Should submit after giving all the requisite information
B.4 Needs major redesigning (Mention one or two major weaknesses)
Buy Back: The company can buy back the equity according to mutually agreed time schedule. Fund will have
the right to retain up to 10 per cent or more of the equity. In case of exceptionally successful companies, the
Fund may use this provision to remain involved in the company to continue learning from its success. But it
would be up to the Fund to decide how long it will retain this presence in the company.
Personnel: All the policy-making and technical staff should go through an intensive training program to
understand the concept of social business and methodology of project selection and evaluation of performance
in consultation with the Yunus Centre.
Sources of Fund: After initial period, funds can be raised from the following sources:
- Government grants - CSR Funds
- Private Individuals - Foundations
- Companies
Once the social businesses are able to generate income, they will be able to return the initial investment capital
and will always replenish the fund.

Terms and Conditions for obtaining the License of “YUNUS” name
A social business company or a foundation, or a centre, or an institute that wishes to dedicate itself to
social business may apply to Yunus Centre to receive the license for using “Yunus” name in their
organization’s name. The terms and conditions to obtain a license are given below:
The company/organization will sign an agreement for compliance of the following terms and
conditions:
1. A company will pay an initial license fee of $2,500 to the Yunus Centre and a yearly renewal fee of
US$ 1,000. In special cases, registration fee and annual renewal fee can be reduced or waived. If annual
fee is not paid, the license will be terminated.
2. For the use of “Yunus” name in a social business company, a minimum of 10% share of the company
has to be given to Yunus Centre.
3. Yunus Centre would get a minimum of one seat on the board of the Company.
4. Yunus Centre would have veto power on policy matters relating to keeping the company on track on
its social goal and maintain its social business commitment and in the approval of the logo of the
company/organization.

5. Yunus Centre will expect that its guidance on matters relating to the ideas and philosophies of social business
as detailed by Professor Muhammad Yunus, will be carefully followed.
6. Yunus Centre can walk away with ‘Yunus’ name in case of a conflict on the interpretation of the concept of social
business, or any other matter of basic policy.
7. The managing director/CEO will be appointed with a consensus resolution of the board. If any member of the
board, present or absent, disagrees then the appointment cannot be confirmed.
8. License for using “Yunus” name is non-exclusive. It can be licensed to any number of other organizations within
same location or same organization.
9. Holder of licence of “Yunus” name can not pass on the name to another legal entity. In each such case new
licence has to be obtained.
Operational Guidelines
-Yunus Centre will provide assistance in preparing the operational guidelines for the fund
-In order to be eligible to start a Social Business Fund, there will have to be 2 fully dedicated employees working
for it who have received training from the Yunus Centre in Bangladesh.
Developed by:
Yunus Centre

Social Business Funding Program
Application Form
PART 1 – APPLICANT INFORMATION
Thank you for your interest in the Social Business Fund (SBF) . Please read all the information carefully in
the guidelines to ensure that you have successfully completed this form.
If you have any questions about the application form or your eligibility, please contact Social Business
(........) a member of the SBF, Name: ......................... Cell:
Name of organization
Postal Address
Postcode
Telephone
Facsimile
Website
1.1 Applicant’s details

Name
Position
Telephone
Mobile
Email
1.2 Contact person – responsible for the fund of your social business
1.3 Tick the box which best describes who you are
Are you business
professional?
Unincorporated group (you
will need to be sponsored by
an incorporated organization
or local government authority
– see question 1.5)
Not for profit company Organization established under
the companies Act, 1994.
Other – please describe

1.4 Has your organization previously submitted a Certificate of Incorporation to the Registrar ? Yes 
No  Not applicable - unincorporated 
If you have not previously submitted a Certificate of Incorporation, or your incorporation status has changed since
the certificate was last submitted, please ensure that you attach a copy with this application.
1.5 Sponsoring body (for applicants who are NOT incorporated)
Incorporated
sponsoring
organization
Contact Person
Address
Telephone
Facsimile
Email
Is the sponsoring
organization not-for-
profit?
Yes  No 
Please attach a copy of the sponsor’s Certificate of Incorporation .

Taxation details of the organization managing the grant funding
TIN
Is your organization
registered for RJSC?
Yes No
1.7 Are you a Deductible Gift Recipient (DGR)? Yes No
1.8 Bank account details of the organisation managing the grant
funding
Bank name
Bank branch
Name of bank account
HS code Number
Bank Account Number
1.6

PART 2 – SOCIAL BDETAILS
2.1 Current working name of the Social Enterprise:
2.2 Location of the Social Business project :
 Dhaka  Barishal  Rajshahi
 Khulna  Rangpur
 Chittagong  Sylhet
2.3 Please select the primary target group your social enterprise is
focused on (please select only one):
 Aboriginal Community  Addiction  Aged Care  Carers
 Children  Community Development  Conservation  Disabilities
 Domestic/Family Violence  Employment/Training  Families 
Homelessness
 Low Income/Disadvantage  Multicultural (CaLD)  Mental Health
 Men
 Offenders/Ex-offenders  Unemployment  Physical Health  Women
 Volunteering  Youth Organisational/Sector Development

2.1 Have you previously applied to ……..SBF?
 Yes  No
If yes, what stream did you apply for and what was the result of your previous
application?
2.2 Where do you think you are in the process of establishing or
running a social business:
A.  You have done a lot of the ground work in the feasibility stage and are
looking for seed capital and/or consultancy advice to help you with the
final pieces you need before beginning.
B.  You are ready to launch and are looking for some start-up capital to help
support the business in its early days.
C.  You are established and are looking for capital to help with the growth of
the business as well as different types of social finance (for example soft
loans).

Note: The SBF Program is able to provide different types and amounts of
funding, depending on what stage you are at in the establishment and running
of your social business.
If you answered A in question 2.5 you are not expected to have a completed
business plan at this stage. However, you are expected to have thought
through key points around your social business idea and must provide as
much information as possible to the following questions. Not only do you
need a good idea, but you need to ensure there is sufficient detail/information
to enable the consortium to be able to analyse and/or undertake due diligence
of the idea.
If you are completing a Stream 2 application you should complete the section
on ‘Focusing’ in the Social Enterprise Builder.
Please note that your answers will play an important part in the
assessment of your application in a highly competitive funding
round.
If you answered B or C in question 2.5 you will be expected to have
a business plan developed, including a set of financials. You should
have completed the section on ‘Pursuing’ in the SBF.
Please note, the final decision regarding what type funding stream and the
amount you are suitable for will be made during the due diligence process.
Instructions: please limit answers to each the questions on the following
pages to 500 words maximum.

2.6. Outline your business model (make sure to explain what you will
be selling, what the price will be and how you propose to generate
an income stream)?

2.7 Who are your customers and how do you know there is demand for
your product?
• How many are there?
• What evidence do you have to suggest they are willing to pay a certain price
for your product?

2.8 Who is your competition?
2.9 What is your unique selling point (that is, why would customers
buy from your enterprise instead of other business)?

2.10 How do you plan to reach your customers (that is, what is your
distribution channel and how do you plan to market your
product)?
2.11 What do you consider to be the critical success factors (no more
than three) for your company?

2.12 What team do you need in place for your business to succeed?
Please outline the key positions that you will be recruiting for if
you are successful with the SBF application. For any key positions
already in place, please include credentials of staff members.
2.13 What is your predicted/current social impact? (Try to quantify
your enterprise’s social impact)

2.14 Please complete the following table based on your financial
forecasts for the next five years:
You should be able to complete the basic financial information requested
below if you have completed
Note: the SBF is designed to assist social business become financially
sustainable in the long-term. Please see the guidelines for further
information about expectations around this.
Yea
r 1
Year
2
Year
3
Year
4
Year 5
Sales revenue
Other income (excluding GPSBF)
Expenses:
The percentage (%) of sales revenue
covering the costs of the business (the
expenses)

PART 3 – FINANCIAL INFORMATION / BUDGET
3.1 How much investment from the ….SBF Program are you looking for?
3.2 What will the investment be used for? If you need consultancy support, please provide information if you
have identified a consultant already.
3.3 What other grant funding are you looking for? Please list the amounts against each prospective funder you
are targeting and/or any funding already secured.
3.4 Are you interested in social finance at this stage (for example a soft loan)? If so, please list any organization
you have spoken to about this.
3.5 What non-financial support do you believe you need at this stage to develop your social enterprise further
(e.g. help with financial planning, legal advice etc.)? Please outline any in-kind support you have already
secured and what gaps still exist.
If you have developed any of the following documents, please attach them with the application:
 A financial forecast (profit and loss statement) for the social enterprise covering the upcoming financial year.
Make sure to include the investment request amount from the SEF Grants Program .
 Your most recent annual report or equivalent
 Your most recent audited accounts
 A copy of the social enterprise’s marketing plan
 A list of your Board members or management committee and/or any sponsoring/supporting experts

Terms and Conditions for obtaining the Licence for the use of “YUNUS” name
A social business company, foundation, centre, or institute that wishes to dedicate itself to social business may
apply to Yunus Centre to receive the license for using the “Yunus” name in their organization’s name. The terms
and conditions to obtain a license are given below:
•A company will pay an initial license fee of $2,500 to the Yunus Centre and a yearly renewal fee of US$ 1,000. In
special cases registration fee and annual renewal fees can be reduced or waived. If annual fee is not paid, the
license will be terminated.
•For the use of “Yunus” name in a social business company, a minimum of 10% share of the company has to be
allotted to Yunus Centre.
•Yunus Centre has to get a minimum of one seat on the board of the Company.
•Yunus Centre will have veto power on policy matters relating to keeping the company on track on its social goal,
maintaining its social business commitment and in the approving the logo of the company/organization.
•Yunus Centre will expect that its guidance on matters relating to the ideas and philosophies of social business as
detailed by Professor Muhammad Yunus, will be carefully followed.
•Yunus Centre can terminate all association with the organization in case of a conflict on the interpretation of the
concept of social business, or any other matter of basic policy.
•The managing director/CEO will be appointed with a consensus resolution of the board. If any member of the
board, present or absent disagrees, then the appointment cannot be confirmed.
•License for using “Yunus” name is non-exclusive. It can be accredited to any number of other organisations
within same location or the same organisation.
•Holder of licence of “Yunus “name cannot pass on the name to another legal entity. In such cases, new licences
has to be obtained.
•These conditions to not apply to the use of " Yunus Centre" logo.

Applications may be sent in the following ways:
...............................
..............................
.............................
...............................
Or
By email to: ……………………………..
PART 5 - CHECKLIST
Before you submit the application – please ensure that you
have completed and attached these documents.
Please tick off each item when you have completed or attached it.
Attached a copy of the Certificate of Incorporation OR a copy of the
sponsoring organisation’s Certificate of Incorporation if not previously
supplied to the Department for ……………………………….
Completed all sections of the application form
Attached a copy of your business plan, if applicable
Read and completed Part 5 (Declaration) of the application form
Attached a copy of your: financial forecast for the social enterprise
covering the upcoming financial year; annual report; audited accounts;
and marketing plan, if applicable. Please list:

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