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EVPA is grateful for the support of:
Head 7: Creating Social Value in Asia - Philanthropic or Investment
Capital?
Europe and Asia
44M km2 in Area
4.1B people
No integrated political/economic bloc
10M km2 in Area
0.7B people
European Union
AVPN
AVPN
AVPN’s platform brings together practitioners and supporters of venture philanthropy to deliver greater social impact
Greater Social Impact
AVPN currently has 115 members across 19 countries
VPOVPO
VPOVPO
Associate Members
Government or related
PracticingMembers
Professional Service Firms
Universities / Research
Wealth / Asset
Managers
CorporateCSR
Private Equity
Foundations
Jan – Mar’12
Roundtables:
Workshops:
Seminars:
Apr – Jun’12
Roundtables:
Workshops:
Seminars
Jul – Sep’12
Roundtables:
Workshops:
Seminars
Oct – Dec’12
Roundtables:
Workshops:
Seminars:
H1 2013
Annual Conf.
May 9 and 10
AVPN Member Services
Networks & Expertise from USA & Europe
2013 initiatives
1. VP fund formation
2. Deal flow database
HK
SGIN CN SG HK JP
SG
IN SG HK JP IN SG HK JP
IN SG HK JP
EVPA
Knowledge Center
Asian Venture Philanthropy Membership
AVPN member list at http://www.avpn.asia/member-directory
Creating Social Value in Asia:Philanthropic or Investment Capital?
www.dasra.org
Neera Nundy
Co-Founder, Dasra
www.dasra.org
• India’s giving in 2006 was $5 billion or 0.6% of GDP versus $300 billion (2.2% of GDP) in US
• Currently 127,000 millionaires in India; expected to double by 2015
• India has the world’s 12th largest HNI population and over 40% want to increase their donations
• India’s giving in 2006 was $5 billion or 0.6% of GDP versus $300 billion (2.2% of GDP) in US
• Currently 127,000 millionaires in India; expected to double by 2015
• India has the world’s 12th largest HNI population and over 40% want to increase their donations
Structural challenges such as lack of accountability and awareness causes this capital pool to be under-tapped
Dasra bridges this gap by connecting and enabling both
philanthropists and social leaders
The Indian Social SectorNeed for High Impact Philanthropy and Non Profits
• 3.3 million non profits in India, only 500 with budget > $100k and very few reach > 5,000 people
• Only 30 have a $5 million+ budget• Organizations lack managerial skills and
focused plans needed to scale • Less than 3% measure their impact in a
robust manner
• 3.3 million non profits in India, only 500 with budget > $100k and very few reach > 5,000 people
• Only 30 have a $5 million+ budget• Organizations lack managerial skills and
focused plans needed to scale • Less than 3% measure their impact in a
robust manner
Non Profits
There are two crucial stakeholders in bringing about social change: social entrepreneurs who deliver change in the field and philanthropists who support entrepreneurs with knowledge, funding, and networks. For real change to happen, we need to not only connect these two groups but also work hands-on to accelerate impact and scale.
Seemingly large sector, but lacks scale, quality and transparency, hence impact and funding is far
below potential
Philanthropy
8
www.dasra.org
Our Process
Introduction to Dasra
9
Our Mission We work with philanthropists, non profit organizations, social entrepreneurs and impact investors, to bring together knowledge, funding and people to catalyse large scale social change.
Our Theory of ChangeWe believe that if philanthropists and social entrepreneurs are given the skills, support and networks to become more strategic in their work, then increased funding will flow to the most impactful organizations and help move more people out of poverty faster.
Build Effective and Collaborative
Philanthropy
Identify and Support Leading
Social Entrepreneurs
Create Impact at Scale
Dasra is India's leading strategic philanthropy foundation. In Sanskrit, Dasra means “Enlightened Giving”.
Our ImpactSince 1999, Dasra has: • Engaged over 400 HNIs on strategic philanthropy• Published 8 in-depth sector research reports and other knowledge pieces• Strengthened growth plans of over 200 non-profits and social businesses• Helped direct over $15 Million to leading non profits
Build Knowledge and Insight
www.dasra.org
Private Philanthropy in India
10
India’s private philanthropy has doubled & is strong compared to some BRICS and Asian countries.
*Bain India Philanthropy Report 2011
Philanthropy in Transitional
China
Ailing Zhuang (PhD)
Co-Founder, Executive Director, Rende Center on Philanthropy Shanghai
Founder and Chair of the Board, NPO Development Center Shanghai
Co-Founder and CEO, Rende FoundationCo-Founder and Former President, China Foundation Center
2012 EVPA Annual Conference Dublin, Ireland
11
Leap-frogging Development of Philanthropy in China
Rapid growth of social organizations
Rapid growth of philanthropic giving
Rapid growth of voluntary services
Fast growth of support organizations for philanthropy
Emerging of new forms of philanthropy
2012 EVPA Annual Conference Dublin, Ireland
12
Causes of the Rapid Growth of Philanthropy in China
Rapid increase of massive social needs
Continuous and fast growing economy
Increasing awareness and willingness of citizen participation
Positive changes and improvement of social policy
2012 EVPA Annual Conference Dublin, Ireland
13
Transparency
Professionalism
Effectiveness
Policy limitation
Social recognition
Support system
Challenges for the Sustainability of Philanthropy
in China
2012 EVPA Annual Conference Dublin, Ireland14
Some Efforts Being Made in China
Rende Center on Philanthropy
• Research • Evaluation
NPO Development
Center Shanghai
• Capacity building
• Networking • One-stop program support
Rende Foundation
Shanghai
• Foundation Park
• Foundation Incubator
China Foundation
Center
• Information Hub for Foundations
• Knowledge Center
2012 EVPA Annual Conference Dublin, Ireland
15
Some Efforts Being Made in China
Narada Foundation
• Jingko Project
• Social Innovation Award
NPI
• NPO Incubator
• Institute for Social Entrepreneurs
YouChange Foundation
• YouChange Institution
British Council
• Training of social entrepreneurs
• Social Innovation Award
2012 EVPA Annual Conference Dublin, Ireland 16
What Can Venture Philanthropy Contribute to Improve the Sustainability of Philanthropy
in China?
Local players• Lanshan Social Investment; • Yu Social Investment Fund;• Xinhu Social Investment Fund;• YiMei Capital
International players• British Council;• US social impact investors;
EVPA/AVPN???
2012 EVPA Annual Conference Dublin, Ireland
17
Ian LearmonthExecutive Director
Social Finance and Philanthropy
Our story so far
• Established in 2002 by WorkVentures, AMP Foundation, BenSoc and Smith Family to provide a venture philanthropy model for NFPs
• Backed by some of Australia’s leading non-profit organisations, corporates and philanthropists, our networks are deep and well established.
• SVA offer strategic consulting, venture funding, a range of social finance models as well as ‘thought leadership’.
• 45 FTEs in Sydney, Melbourne, Brisbane and Perth and rep in ACT.
• Leveraging our commercial skills, we’ve brought new perspective to social sector initiatives such as the formation of the GoodStart Childcare syndicate.
The social finance landscape in Australia
The SEDIF FUNDs
Examples of social finance in Australia include the C’th government’s SEDIF fund, three pilot impact bonds, the Goodstart syndicate and some regional initiatives
1
The Goodstart syndicate
Purchase 678 child care centres from ABC Learning
3
Social impact bonds
• Bonds to reduce out-of-home-care:• UnitingCare Burnside (SVA advising)• The Benevolent Society
• Bond to address recidivism: Mission Australia
2
Other initiatives
Western AustraliaThe WA gov’t have commenced a $10m capacity building grant program for social enterprises.
4The social
finance landscape
Private investors
Commonwealth grant
Fund managers
Invested in social
enterprise
The structure of the SVA Social Impact Fund
Social investors and the Commonwealth government have contributed capital to SVA’s Social Impact Fund, which invests in social enterprise in Australia
The Social Impact Fund(unit trust)
Social enterprise
Social enterprise
Social enterprise
Social investors
(unit holders)
HNW individuals
PAFs
Foundations
DEEWR grant money
The trustee
Fund management
agreement
Trust deed
Governed by trust deed
Fund agreement
Social impact bonds in Australia and internationally
A social impact bond is a contract where the public sector agrees to pay a private service provider for delivering improved social outcomes that result in government savings
Generic structure of a social impact bond
GovernmentService provider
Private investor
Beneficiary of service
Cost savings to government
Government pays investors when desired outcomes are met
Summary
• Private funds used to fund preventative programs
• If the program meets agreed targets , the Government saves money and in recognition of cost savings repays investors principal and interest.
• If targets are not met, investors may not receive any compensation
History
• The first (GBP 5m) was arranged by Social Finance UK to reduce recidivism rates at Peterborough prison
• A number of new SIB programs are underway in NYC and Boston
Bonds in Australia
Three pilot impacts bonds are under negotiation in NSW
• Two Bonds to reduce out-of-home-care:• UnitingCare Burnside (SVA advising)• The Benevolent Society
• Bond to address recidivism: Mission Australia
Private investors fund a social
program
Direct and indirect cost savings accrue to
government
Summary
UnitingCare Burnside (service provider)
Special Purpose Vehicle
The structure of the UCB social impact bond
UCB is in the process of negotiating a social impact bond with the NSW government to reduce the number of children in out-of-home care. SVA is advising on Investor relations.
Immediate gov cost savings
Long term gov cost savings
Improved social outcomes
Loan agreement
Implementation agreement
Social investors
HNW individuals
PAFs
Commercial investors
Program beneficiariesDirect and indirect cost
savings accrue to government
The founders
• Unique non profit alliance
• 12 month period of building syndicate
Building the SyndicateBuilding the Syndicate
25
Capital Structure
Private Equity firms raise their equity
capital in advance and call on it as
needed
Private Equity firms have good
relationships with all the major banks and
can secure debt relatively easily
As a company limited by guarantee,
GoodStart needed 100% debt financing
Difficult to determine a rate of return that reflected the social and financial risks
and rewards
~10%return
~20-30%return
?return
GoodStart Capital StructureGoodStart Capital Structure
• Big Society Capital in Australia
• Federal SIBs and SIBs in other states
• Affordable housing
Other initiativesOther initiatives
Creating Social Value in Asia:Philanthropic or Investment Capital?