Good morning (in the west) everyone and welcome to SEEP’s online discussion on social investing for social enterprise. We’re glad you’ve joined us and I hope you’ll feel free to ask questions, share your own insights and comments, and even disagree and debate.
Many social enterprise practitioners are now trying to learn what social investing is, how it works, and whether they should go after it as a source of funding. The purpose of this discussion is to discuss the practicalities – not the theory – of the emerging field of “social investing”. We’ll have social investors joining us to answer questions and share their insights, as well as social enterprise practitioners. Our goal is to have a discussion that is candid and frank.
Over the course of the week, we’ll explore the following areas:
1. What is social investing? – the spectrum of social investing, from venture philanthropy and investment-style grants to social venture capital and equity investments
2. How is it different? – the social investor/social enterprise relationship, and what to expect
3. Should we seek social investment capital? – some considerations around risk, return, control, and culture
4. How do we find and pitch to social investors? – the practicalities of finding social investors, deciding if they’re the right fit, and getting their attention
5. What’s a business plan, really? – what social investors are looking for in a business plan, and how writing one can benefit the social enterprise, too
Ground rules:
• If it’s your first time posting, please introduce yourself, your organization, and your goals for the discussion
• Don’t be afraid to ask questions, even challenging ones!
• Technical difficulties? Contact Erin Lauer (Lauer@seepnetwork.org) or Elliot Wright (Wright@seepnetwork.org).
2 Comments
Jason, thank you for the
Jason, thank you for the description of your model. Monetizing non-monetary benefits are difficult at the best of times. You flagged the question about measuring “customer benefits” so could please elaborate on what you define as a customer benefit. Likewise “benefits to local suppliers” does this refer to payment for goods and services or have you identified other benefits.
Also how do you factor in the startup costs or working capital which may be offered by resource company, for example, as part of their investment into a particular community?
Finally you refer to a chart being attached. This hasn’t come through so I am not sure if it’s to do with the online conference protocols.
SROI measurement
Dear Bruce, some responses here below
“Monetizing non-monetary benefits are difficult at the best of times.”
Indeed always impossible without creative license and integrity and sometimes still impossible. Nevertheless, better than not doing it at all
“You flagged the question about measuring “customer benefits” so could please elaborate on what you define as a customer benefit.”
“benefits to local suppliers” does this refer to payment for goods and services or have you identified other benefits” this usually lands up being fairly simplistic in application: net socio-economic value generated within supplier from goods and services procured by measured entity from local suppliers. at the second level in the analysis (supplier level), this is focused only on profit, salaries and wagesAgain tricky, and business / product / service and context specific. For example, a microfinance loan provided to a “market lady” in Accra would carry the benefit of enabling her to grow her enterprise and generate more income. So one could measure the increased net earnings possible on the basis of additional cash in the business, as a customer benefit (the challenge of additionality will never go away, but we must not do nothing simply because our approach is imperfect). That same loan provided to a bamboo chair producer in Bangladesh for the purpose of upgrading the roof on her house would provide a very different benefit, which is not measurable at all. In this case, we would conservatively attach zero MEASURABLE customer benefit (as I said, this metric is only for monetizable social benefit. we do not aim to monetize things where it makes little sense. hence, this is by nature a conservative social benefit indicator, imperfect by nature, but nonetheless better than having no approach at all. we are still working on this particular issue: how much is a dollar worth when it buys food for those who would otherwise starve? We don’t have an answer yet, but we continue to work on it…)
“Also how do you factor in the startup costs or working capital which may be offered by resource company, for example, as part of their investment into a particular community?”
all part of the investment into the company. all monetizable investments into the company (cash, assets, etc) are taken as investmentsinjected at a point in time into the company, in the IRR calculation
“Finally you refer to a chart being attached. This hasn’t come through so I am not sure if it’s to do with the online conference protocols.”
i think you need to go online to view the chart.
kind regards
Jason