The document discusses the 'Heart' initiative focused on blending financial and social value through social enterprise incubation and investment models. It outlines various funding mechanisms, including seed and venture funds aimed at establishing sustainable social enterprises that address social problems. Case studies highlight successful projects like 'Second Harvest' and 'Wines with Heart' that demonstrate the potential for social returns through innovative business solutions.

1. Heart and the Blended Value Proposition 04 June 2009

2. INTRODUCTION | Today’s discussion Introduction The Heart space from a SE perspective Blended value What is Heart Fund Management Incubation Consulting Advisory Activation Case Studies Questions

3. INTRODUCTION | The Heart Space Social Value Financial Value Corporates NGOs

4. INTRODUCTION | The Heart Space Financial Value Social Value Social Value Financial Value High High Low Low Social Capital Investments (Social Returns) Financial Investments ( Numeric returns) TRADITIONAL MODEL

5. INTRODUCTION | The Heart Space TRADITIONAL MODEL Cause Donor Public Donations: R17 billion in 2007 CSI R4.3 billion Outcome: Maintenance Donors give money Charities spend it & come back for more Never Ending Cycle

6. INTRODUCTION | The Heart Space Donor Social Enterprise Redirect a portion of charitable contributions to Social Enterprise Outcome: Sustainability Donors invest money Funding problem eliminated permanently Cause HEART MODEL

7. INTRODUCTION | The Heart Space Social Value Financial Value NGOs Corporates Social Enterprise Do-gooder, whole wheat sandal, hippy, bunny huggers Money grabbing, bottom line junky, capitalist, evil doers A gap in the market and a market in the gap HEART MODEL

8. INTRODUCTION | Blended Value Economic Value Social Value Social Value Economic Value High High Low Low Maximized Social & Financial Returns

9. INTRODUCTION | Blended Value Seed Funding Start Up Funding Secondary Funding Mainstream Funding Traditional phases of Entrepreneurship Traditional phases of Social Entrepreneurship ?

10. INTRODUCTION | Blended Value The social enterprise spectrum: philanthropy to commerce – Harvard business school

11. What is Heart? 04 June 2009

12. WHAT IS HEART | Intro Heart, transforming quality of life by creating, incubating and establishing social enterprises that work long term.

13. WHAT IS HEART | Intro It is our vision and vocation to bring about social transformation by creating sustainable social enterprises market-based solutions to social problems We are the nexus between social entrepreneurs needing capital and support to develop their social enterprises, and social investors seeking financial and social returns .

14. WHAT IS HEART | Fund Management 1. Originate Heart Seed Fund Features: Money Back Plus 2 Year deferred loan capital 2 year investment term for 50 investors maximum (purchased in lots) R20 000 per lot R1 million cap Employed to establish market readiness of 6 SEs (maximum) = 135K per project Venture Funds repay loan

15. WHAT IS HEART | Fund Management 1. Originate 2 . Incubate Heart Seed Fund Heart Venture Fund Features: Money Back Plus 3 Year deferred loan capital 4 year investment term for 50 investors maximum (purchased in lots) R50 000 per lot per annum for 2 years R5 million cap Employed to incubate 8 SEs (minimum) Heart Capital Fund repays loan

16. WHAT IS HEART | Fund Management 1. Originate 2 . Incubate 3. Capacitate Heart Seed Fund Heart Venture Fund Heart Capital Fund Features: Money Back Plus 3 Year deferred loan capital 7 year investment term for 200 investors R50 000 per lot per annum for 3 years R30 million cap Employed to capacitate 8 SEs (maximum) for 3 years SEs repay loan

17. WHAT IS HEART | Incubation Social Value Financial Value 1. Originate 2 . Incubate 3. Activate 4. Replicate

18. WHAT IS HEART | Consulting Intervention Social Enterprise development Leader brand strategy CSI strategy, training, outsourcing Staff volunteering programmes Transformation strategy alignment and benchmark tracking Social communications strategy Pam Golding Properties Media24 Lewis Group Smit Marine Bio Oil Earthchild Clothing Frika Platypus Productions

19. WHAT IS HEART | Advisory Cause –Related Funds Heart Venture Clubs Engaged Philanthropy Venture Philanthropy Charitable Contributions Fund, Heart Seed Fund; Heart Venture Fund; Heart Capital Fund Charity Wines Venture Club; FoodTent Venture Club; Adrenalize Venture Club, etc

20. Case Studies 04 June 2009

21. CASE STUDIES | Second Harvest Second Harvest Farmers plough about 20% of their crops back into the ground because the vegetables are not market quality. We approach farmers to let us harvest this produce – a second harvest. These vegetables are cooked into nutritious stews, which are packaged into 1,2kg plastic bags and frozen. 1 bag feeds 8 - 12 children Sponsors: Lewis Roll Out: Based in Langa & Bellville – replicable model Sustainability: R8 per packet Projected Income: 30 000 packets per month = R240,000

22. CASE STUDIES | Wines with Heart Every month more than 50 of South Africa’s leading wine farms donate their products to Charity Wines. These wines are packaged into a Mystery Box and sold to consumers for R250. Proceeds from sales are invested into NGOs with a Fetal Alcohol Syndrome or Severe Learning Disability focus. Our goal is to eliminate their need to fund raise within 3 years. Sponsors: KWV, Distell + 52 wine farms Roll Out: Based in Stellenbosch, provides national delivery Sustainability: R250 per box

23. CASE STUDIES | Wines with Heart THANK YOU!!