This funding will be used to create technology-enabled jobs for thousands of youth globally, to continue to develop Samasource’s robust technology platform, the SamaHub, and to support expansion of the organization’s microwork model into low-income communities in Gulu, Uganda and California.
“We are grateful to receive this investment from some of the world’s leading philanthropic funders,” said Leila Janah, founder & CEO of Samasource. ”The capital generously provided enables us to serve more marginalized women and youth than ever before and expand into new areas, including the United States. With this support, we will dramatically change the lives of thousands of poor women and youth by providing them with what they want most—paying work.”
To date, Samasource has connected more than 3,000 marginalized people in nine countries to paying work—totaling over $2 million in wages. Samasource’s award-winning microwork model brings free, specialized technology training and paid digital work to poor women and youth around the world. This enables people to gain skills, earn a living wage and break the cycle of poverty for themselves and their families. 75% of Samasource workers move up to higher-paying work or higher education.
The MasterCard Foundation is leading this round with an investment of nearly $5.3 million. This will allow Samasource to significantly broaden its impact by developing additional features to scale its proprietary microwork platform, the SamaHub. The funding will also support Samasource’s network of delivery partners to train 10,000 East African youth, and provide direct employment to over 4,000 young people living in slums and peri-urban areas in Kenya and Uganda.
The new investment round will also support the landmark opening of Samasource’s first domestic program, SamaUSA, which will train low-income students to support themselves through online work. Starting in northern California with funding from The California Endowment, SamaUSA is designed to equip marginalized people in California with new technology skills and link successful program graduates to jobs on online work platforms as a strategy to improve their health and well being through earned income.
]]>Why measure social impact?
In both developed and developing markets, businesses are increasingly adopting double or triple bottom lines. Environmental concerns, financial crises, and lingering social problems are sparking the redefinition of the role of business and people are beginning to leverage the power of markets to fix the world’s ills. But we cannot measure this collective performance based on financial data alone.
As more and more people choose to make impact investments, they want to know which companies to invest in and what kind of return they are getting for their money. How is it helping to improve access to education? How effective is it in reducing carbon emissions? How is it promoting gender equality?
By measuring social impact, investors can make intelligent investing decisions, investment funds can effectively fundraise, ensure due diligence, and manage the funds’ impact performance, and companies can raise capital, do reporting, and manage their firm’s impact performance.
What are IRIS, GIIRS, and Pulse?
In order to get a better picture of their overall performance, companies have started to create their own social and environmental performance metrics. But the resulting fragmentation is inefficient and expensive. Plus it limits comparability. Consequently, three major initiatives to produce a common reporting language have emerged. Standardization enables performance comparisons and benchmarking, and streamlines and simplifies reporting requirements for companies and their investors.
The Global Impact Investing Network (GIIN) started as a group of investors brought together by the Rockefeller Foundation to discuss the needs of the impact investing industry. One obvious challenge is to standardize impact reporting so that we can better understand the impact of investments. The Impact Reporting and Investment Standards (IRIS), therefore, was developed to do just that. It is a standard set of performance measures for describing social and environmental performance that facilitates comparisons of impact data across investments.
The IRIS framework consists of six parts:
The IRIS is available for download in English and Spanish. It is a self-reporting tool. Organizations can use it on a voluntary basis and select their own metrics based on their activities, objectives, and stakeholder requirements. There is also an online registry where IRIS users can list the metrics they use to monitor social, environmental, and financial performance publicly.
The GIIN’s IRIS expands upon the work initiated by B Lab and Acumen Fund to develop and promote standard performance measures. The Global Impact Investing Ratings System (GIIRS) was developed by B Lab, the same nonprofit organization that created the third-party B Corp certification to underscore corporations with a double or triple bottom line. The GIIRS is a comprehensive rating of a company’s social and environmental performance. The GIIRS Impact Assessment gathers a range of information about the company’s work, size, sector, and region. These assessments are carried out annually and validated and reported by the GIIRS.
The GIIRS incorporates IRIS metrics into the core of its rating system. So any company that is rated by GIIRS is by default in compliance with IRIS. An IRIS metric may be the number of female workers and total workers in a company. Using this information, GIIRS may calculate diversity in a company.
Finally, Acumen Fund’s assessment tool is called Pulse. It is a web-based data management tool where users can apply industry standard metrics or create custom metrics unique to an investment. Similar to the GIIRS, Pulse adheres to IRIS. The technology by Pulse allows users to track and measure impact investment data. The original version was built jointly by Acumen Fund and Google. Today, technology company App-X is responsible for the long-term management of the software.
With the number of social enterprises growing, being able to measure and communicate non-financial performance will be a key differentiator between companies. This will also ensure that money is going into the most effective models in a world of limited resources.
]]>Since its inception in July this year, the City of London Corporation has invested $500,000 in the fund, with further investments from Oxfam, Symbiotics, and private and institutional investors. The target size of the SEIIF is $100 million after three years, which will be invested in a portfolio of debt and equity instruments, targeting those with low risk, high impact profiles.
“We are determined to prove to the investment industry that its scale and influence means it could play a significant role in eradicating poverty. Our aim is to make impact investing a mainstream investment product which the sector recognises as a serious tool for both financial return and social impact,” says Barbara Stocking, chief executive of Oxfam.
“In particular, SEIIF has been designed to meet the needs of the ‘missing middle’. These are the countless small businesses in developing countries which have the potential to thrive but are completely stifled by limited access to credit. The fact that we have been able to make such a significant investment within our first year proves that the appetite exists within the financial community, and we are continuing to bring new investors on board now.”
]]>Though it’s not uncommon to see impact investments made in developed markets, impact investments generally refer to those made to social enterprises that operate at the bottom of the pyramid, a term used to describe those living under $2.50 a day. In other words, these businesses serve the world’s poorest by providing access to healthcare, water, sanitation, housing, food, among other necessities. And because they work in much tougher environments, impact investment funds typically help with management support to nurture the company in addition to providing capital. As a company grows, they are able to make a greater positive impact on the livelihoods of many people. Therefore, impact investment funds exist to catalyze impact through investment in social enterprises and other socially-minded organizations.
Acumen Fund is the brainchild of Jacqueline Novogratz, whose journey through South Asia and Africa working with women in microfinance led her to believe that somehow, capital could be used to support local enterprises that have innovative approaches to serving the poor. Acumen Fund was incorporated in 2001 with seed funding from the Rockefeller Foundation, Cisco Systems Foundation, and three individual philanthropists. Since establishment they have made over $70 million worth of investments – called “patient capital” – in India, Pakistan, Kenya, Tanzania, Uganda, the United States, and the United Kingdom. These investments typically range from $300,000 to $2 million in equity and debt with a payback of roughly seven to ten years, hence the name “patient”. The goal isn’t high returns, but rather to improve the ability of the poor to live with dignity.
Grassroots Business Fund (GBF) is based in Washington, DC and has offices in Kenya, Peru, and India. Their focus is to invest in high-impact businesses in emerging markets that provide sustainable economic opportunities for the bottom of the economic pyramid. GBF was an initiative led by Harold Rosen, who spent 30 years managing the International Finance Corporation’s emerging markets investments. They make various equity, quasi-equity, and debt investments between $250,000 and $1 million with an average investment period of six to eight years. These investments are complemented with business advisory services such as financial management, accounting, and governance. GBF supports enterprises in Kenya, Tanzania, India, Indonesia, Bolivia, and Peru.
LeapFrog Investments focuses on financial services businesses, mostly companies that provide insurance, in the African and Asian market. They invest large amounts typically between $5-20 million over a four to seven year period and expect to exit the mature business with an IPO, trade sale, sale back to partner, or MBO. Since operations began in 2008, LeapFrog has a track record of investing in companies that provide microinsurance products including crop insurance, livestock/cattle insurance, fire or theft insurance, health insurance, term life insurance, death insurance, disability insurance, or insurance for natural disasters. Traditionally, people living at the bottom of the pyramid are excluded from insurance services and as a result do not have a safety net, which they require more than anyone.
Root Capital concentrates on helping small and growing agricultural businesses in Africa and Latin America. It was founded by Willy Foote who began his career as a financial analyst in the Latin American Corporate Finance group at Lehman Brothers. While in Mexico and Argentina, he discovered the challenges faced by cooperatives and small producers who lacked access to credit and markets. The company began lending in 1999 to farmer associations and private businesses that create prosperity in rural regions. The number of loan disbursements made total 1,266 with a value of $436 million.
Small Enterprise Assistance Funds
The Small Enterprise Assistance Funds (SEAF) began in 1989 as the CARE Small Business Assistance Corporation (CARESBAC) owned by CARE, the international relief and development organization. At the time, there was a recognition that small and medium enterprises were vital to achieving prosperity and political and economic stability in both developing and transition countries. In 1995, CARESBAC spun out to become the SEAF and provided investments supporting businesses operating in underserved communities. The first fund was launched in Poland in 1992 and has since expanded across Central and Eastern Europe, Latin America, and Asia. In total, SEAF has made over 300 risk capital investments through investment vehicles such as funds, facilities, and finance companies in over 20 countries. Investments generally range from $200,000 to $3 million.
]]>Together, the organizations pledge $6.5 million to support GIIN’s work to help accelerate the development of a coherent impact investing industry.
Impact investments are investments made into companies, organizations, or funds with the intention to generate positive measurable social and environmental impact alongside a financial return. They are an opportunity to steer significant capital to market-based solutions in sustainable agriculture, affordable housing, affordable and accessible healthcare, clean technology, financial services for the poor, and other sectors addressing the world’s most pressing problems in both emerging and developed markets.
“Impact investing promises to improve billions of lives by catalyzing sectors, from affordable, high-quality education to clean, solar lighting,” said Matt Bannick, Managing Partner of Omidyar Network, in a news release. “Omidyar Network’s support of the mission and the team at the GIIN is founded on the belief that the GIIN is uniquely positioned to accelerate the growth of impact investing globally.”
Funding will be distributed to GIIN over three years and used to help attract more investment capital in poverty alleviation and environmental solutions. Support from Omidyar Network totals $2.5 million. The Rockefeller Foundation and USAID have each granted $2 million. USAID’s funding will support impact investing in emerging markets. Funding from Omidyar Network and The Rockefeller Foundation will support projects worldwide.
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Kevin Jones, the co-founder and convener of SOCAP, introduces the conference as a place for “disruptive technology” and “personal connection”. He talks about one person in particular who exemplifies why the conference takes place. This person is Tonee Ndungu, who started Kytabu, a textbook subscription service in Kenya that would make textbooks affordable and accessible for students. The company would source reverse-engineered tablets without all the unnecessary extras so that it costs only $40 to make. In Kenya, poor people can afford to buy smaller portions of products, such as sachets of shampoo. Kytabu operates on the same principle by letting poor familiar rent a book instead of buying it at an unaffordable price. They can rent books on a daily, weekly, monthly, school term, or annual basis. By making both the tablet and e-books affordable, educational content can reach the masses. However, like many social enterprises, what they need is the funding to operate and scale. SOCAP tries to connect the money and meaning.
Tonee Ndungu was one of five social entrepreneurs to take the stage on Day 1 and be given 30 seconds to introduce their organizations with the goal of expansion through investment. The others were:
Alexander Eaton (Sistema Biobolsa) – Based in Mexico, Sistema Biobolsa takes organic waste and produces bio-fertilizer for crops and biogas for heating and cooking.
Sheikh Turay (Liberation Chocolate) – Based in Liberia, Liberation Chocolate helps former child soldiers reintegrate into society by employing them to restore cocoa farms.
Veronica D’Souza (Ruby Cup) – Based in Denmark and Kenya, Ruby Cup is an affordable menstrual hygiene product that helps girls and women in emerging markets manage their menstruation.
Paseka Lesolang (WHC – Water, Hygiene, Convenience) – Based in South Africa, WHC was prompted by a World Health Organization statistic saying South Africa’s water consumption will exceed availability by 2025 to produce a simple device that when installed in a toilet, releases an organic detergent that makes the water reusable.
Follow @sebuzzcom on Twitter for updates on SOCAP 2012.
Photo from Social Capital Markets.
]]>Intellecap, Department For International Development (DFID) UK, and German developmental services organization Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH recently announced their collaboration to launch a regional forum called “Sankalp Forum-Samridhi Social Enterprise Recognition” to support scalable and sustainable businesses in eight low-income states (Bihar, Chhattisgarh, Jharkhand, Madhya Pradesh, Orissa, Rajasthan, Uttar Pradesh and West Bengal).
This forum is an extension of the Sankalp Forum, which began in 2009 by Intellecap and has since created a community of over 10,000 social entrepreneurs, impact investors, corporations, academics, and policymakers to catalyze the flow of capital to sustainable and scalable enterprises in India.
Under this new initiative, a cash grant of INR 5 Lacs will be given to an enterprise that showcases social impact alongside a strong business in the sectors of clean energy, agriculture and food, and the provision of basic services (water, sanitation, health, and education). An additional INR 2 Lacs will be given to an enterprise that produces positive impact for women. They have been accepting nominations since the initiative was announced in early September.
In an email conversation, the forum’s spokesperson said a total of 50 early-stage social enterprises were screened that are either currently working in the eight low-income states or are planning to expand their operations in these states. Finalists have been selected and the winners will be chosen on October 15 and announced on October 16 at the Sankalp Regional Summit in Patna, Bihar.
The finalists are:
Agriculture, Food, and Rural Business
Bhushan Agro Technologies
Eco Tasar Silk Pvt Ltd.
Kautilya Phytoextracts Pvt Ltd.
Basic Services
G.V. Meditech Ltd.
Gram Tarang Inclusive Development Services Pvt. Ltd.
Kanungo Institute of Diabetes Specialities
Clean Energy/Technology
Claro Energy Pvt Ltd.
Greenway Grameen Infra
Greenlight Planet India Pvt Ltd.
Women Empowerment and Impact
Eco Tasar Silk Pvt Ltd.
Frontier Markets
Greenway Grameen Infra
Participating enterprises will have the opportunity to get input on capacity building, strategic advice, and mentoring provided by experts from Intellecap, investors, and seasoned entrepreneurs. DFID UK will be funding the grant.
The Sankalp Forum-Samridhi Social Enterprise Recognition will be the first time that recognition is given to social enterprises active in India’s lowest income states.
]]>During the workshop, employees discussed the concept of social enterprises, what makes them successful, and how to grow and sustain one. They learned the business skills to create, budget for, and measure the impact of social entrepreneurship programs.
“The foundation is adopting the social enterprise model as part of its new strategy to create long term sustainable programmes that address youth related challenges,” said H.E. Khuloud Al Nowais, Chief Sustainability Officer at Emirates Foundation for Youth Development. “This training is instrumental to upgrading the local talents and skill set of the organization who is now adopting a business model that will allow them to achieve greater more measurable impact.”
What she means is that the foundation will be moving from a previous grant giving strategy to one that surrounds venture philanthropy – a business results-oriented approach that uses the techniques from venture capital finance to meet philanthropic goals, and recognizes that there are no quick fixes to create tangible, developmental results.
“Instead of giving money on a short-term reactive basis it looks at investing in programs and initiatives that earn social returns. This increases the measurable impact and opens the way for foundations like ours to play an even greater role in advancing the nation’s socio-economic progress.”
The foundation’s aim is to go beyond merely providing finance. It will form relationships with partners to test new ideas, scale them up, and spin them off once they achieve self-sustainability.
“I’m very excited about this initial step of collaboration between Ashoka Arab World and the Emirates Foundation. Social entrepreneurship is vital for fostering innovation and sustainable growth within the region,” says Iman Bibars, Regional Director and Vice President at Ashoka Global.
“Furthermore, we are confident that the United Arab Emirates is a fertile land of innovation and entrepreneurship. Our aim is to uncover its great potential and enable local ideas to be known worldwide. We do believe that now is the right time for working on increasing the scale and the impact of social entrepreneurship in the United Arab Emirates, and supporting top-notch local innovation and solutions.”
The Emirates Foundation was launched in April 2005 as an initiative from His Highness General Sheikh Mohammed bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the Armed Forces. It is chaired by HH Sheikh Abdullah bin Zayed Al Nahyan, Minister of Foreign Affairs.
In 2012, the Emirates Foundation was re-launched under the name “Emirates Foundation for Youth Development” as an integrated national initiative that seeks to invest in UAE youth. The new strategy adopts venture philanthropy which aims to impact the lives of UAE youth positively and permanently through measurable projects. The Foundation is funded through contributions from the Abu Dhabi government and private sector companies channeled to support its endowment fund.
Photo from Emirates Foundation for Youth Development.
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