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Scope and Methodology
• Landscape study of Indonesia, Philippines, Singapore and Thailand, overview of Cambodia and Vietnam
• Review of existing research
• Review of learnings from other social investment markets
• Over 100 interviews conducted
• Adapted Nonprofit Finance Fund’s complete capital approach to frame findings
Complete Capital Framework
Financial
Intellectual Social
Human
Adapted from Nonprofit Finance Fund, U.S.
Social Solutions
Social Investment: Framework
: Investment approach to disbursement decisions
• Understanding of underlying issues derived from research / data / experience
• Intent of achieving discernible / measurable outcomes
• Monitoring and evaluation of progress
• Engagement other than financial
• Multi-year perspective
Social Investment in SE Asia: The Big Questions
What roles could it be expected to play?
• Alleviate specific social issues • Support the larger development agenda • Address issues of inequality • Broader societal engagement with social issues • Possibilities for cross-sector collaboration
What are the potential roles of existingand emerging players?
• Philanthropists • Social purpose organisations • Social entrepreneurs • Businesses • Government • ODA
Emerging Themes
Dominance of traditional philanthropy
• But pioneers and innovators emerging
Evolution of corporate philanthropy and engagement
• Push and pull factors for corporate venture philanthropy
Impact investing at a very early stage of development
• Range of social enterprises emerging, but gaps remain
Human, social and intellectual capital gaps inhibit effectiveness of financial capital
• More and more diversified sources of funding still needed
Traditional Charitable GivingDominates Philanthropic Landscape
• Strong religious and cultural context • Family centred and/or individual behests • Often affiliation driven • Concentrated in traditional issues • Very local • Very stand-alone approach • Cited deterrents to giving:
• Lack of trust in NPOs - transparency, accountability, effectiveness
• Lack of knowledge of social issues
Traditional Charitable GivingInnovators Emerging
• Pioneering family foundations practicing catalytic philanthropy
• Pooling of traditional charitable funds • Community Foundation of Singapore • Rumah Zakat • PBSP • One Thailand
• Non-traditional funding sources • “Sin taxes” • Tote Board • Thai Health Promotion
Foundation • Philippines: capital market innovations and conversion of
foreign debt to social funds
Corporate Venture
Philanthropy
Pushfactors
Mandatory CSR FundsExtractive industries
Disability employment quota fines
Reputational CSR
Potential of CorporatePhilanthropy: Beyond CSR
Corporate Venture
Philanthropy
Pushfactors
Pullfactors
Mandatory CSR Funds
Reputational CSR
• Cultural + historical context
• Stakeholder expectations
• Investor recognition • Proliferation of awards,
indexes and ratings • Affinity for new social
investment models • Repository of needed
resources
Extractive industries
Potential of CorporatePhilanthropy: Beyond CSR
Disability employment quota fines
Impact Investing at Early Stage of Development
• Growth of start-up/early stage funding opportunities at national level
• Relatively few investments of substantive size
• Proliferation of social enterprise models
• Investors cite lack of investment readiness and scaleability
• Key intermediaries are champions for the sector
• Ecosystem building inhibited by lack of funding
• Growth of start-up/early stage funding opportunities at national level
• Relatively few investments of substantive size
• Proliferation of social enterprise models
• Investors cite lack of investment readiness and scaleability; concentration in incursive businesses
• Key intermediaries are champions for the sector
• Ecosystem building inhibited by lack of funding
Impact Investing at Early Stage of Development
The Capital Gaps
Human
• Experienced resources for capacity building
• Professional service providers • Pro bono models • L/T career path for social sector
professionals
Financial • Funds for SPO capacity building • Ecosystem development • Absence of pooled funds for scale • Growth funding gap for SEs
Social
• Lack of collaboration and convenors
• Networks and support organisations for philanthropy and non-profits
• Sharing of successful models
Intellectual
• Research on social issues and effective interventions
• Effective policy measures and regulatory frameworks
Thailand: Themes
• NPOs face negative perceptions: lack of trust, transparency and effectiveness
• Charitable giving dominated by religious and royalty affiliated institutions
• Regulatory reporting convoluted and tax incentive systems lack transparency
• Growing interest in, and ecosystem evolving for, social enterprises
• Positive developments in corporate philanthropy/CSR
Thailand: Capital Needs
• Human : Capacity building models for SPOs
• Financial
• Divert traditional charity and CSR to social investment
• Pooling of mandatory CSR funds
• Intellectual : Effective policy measures and execution to support social sector
• Develop models of corporate engagement
• Understanding of social issues as convening mechanism
• Social: Collaboration among philanthropists; individual and corporate
Indonesia: Archipelagic Challenge
• Large addressable SI market
• Post-1997, massive expansion of NPO sector
• Weak ecosystem and legacy of mistrust regarding transparency and accountability.
• ODA declines increase reliance on domestic sources of capital.
• Religious
• Corporate
• HNWIs
• “islands” of activity, strong need for collaboration and coordination across the “archipelago”
Indonesia: Capital Needs
• Human : capacity builders / incubators • Financial : smart capital / intermediaries • Intellectual : internal and external
landscaping • Social : cross-sector collaboration platforms /
convenors
Philippines Overview: Needs Drive Success
• Most vibrant civil society in SE Asia – strong and credible leadership
• Family foundations are leaders for strategic, collaborative philanthropy
• Institutional philanthropy created through innovative funding mechanisms
• Longstanding history of corporate engagement
• No of high profile social enterprises
• Local funds financing and building capacity for community based SEs
• Constraints include geography and relatively small amounts of funds
Philippines Overview: Capital Needs
• Human : attract and retain talent • Financial : ODA declines not yet offset by
domestic capital • Intellectual : none! • Social : overcome geographic isolation /
metro-Manila domination
Cambodia and Vietnam: Sparks
• Donor dependency hampers SI growth.
• Expatriate vanguard (HSEG, DDD)
• NGO-led social enterprises (Friends Internaional, BSDA)
• Corporates MIA (ANZ)
• Regulation / leakage
• Pioneer capital (ADM, Uberis, Arun, Insistor)
• Scattered capacity building / convening ( Shift 360, PDI)
Cambodia Vietnam• Legacy of autarky hampers SI growth (until
doi moi) • Regulatory challenges for both NGOs and
business • Expatriate / returnee vanguard (Koto
International) • Domestic and international private
philanthropy marginal (Vietnam Education Foundation)
• Destination for international impacting investment funds / flows (RCC)
• Emergence of domestic capital (Lotus Impact / VinaCapital)
• Corporate philanthropy institutionalized (Vinamilk)
• Capacity builders and conveners (LIN, CSIP, BC, Spark)
Singapore Overview
• Social concerns a new national priority
• Government support central to NPO sector
• Maturing ecosystem for NPO sector and philanthropy
• Family foundations a key feature and promising trends in corporate philanthropy
• Rapidly emerging ecosystem for social enterprises
• New generation of SEs still struggling to achieve scale
• Growing as a regional hub
• Constraints to growth around capacity and orientation of funding support
• Many elements in place for continued evolution for SEs and NPOs
Human
Intellectual
Social
• Several well-supported field support orgs
• Youth interest in social issues • Professional services orgs emerging • International organisations bringing new capacity
• Growing corporate interest
• Capacity of field support orgs needs to be built as system still maturing
• NPO and SE capacity needs to be built • Remains difficult to attract talent given attractive
alternative career paths
• Lack of effective channels for meaningful engagement
• Several local and into orgs involved in knowledge building
• New platform / networks emerging • More conversations and sharing taking places
• Still insufficient understanding of what works • Lack of strong evaluation efforts
• Collaboration still rare
Type of Capital Strengths Needs
Singapore: Capital Needs
Financial
• Strong government support
• Some tradition of family foundations • Growing corporate foundations
• Availability of modest seed capital for SEs • Availability of growth capital
• Aggregators emerging
• Core support lacking • Less independent support, little for advocacy-
type efforts
• Few examples of strategic philanthropy • Level of individual giving low relative to wealth
• Lack of more substantial early stage capital for SEs
Some Questions for Singapore
• Can we change the way capital is provided? i.e. more core support to NPOs, more substantial early stage capital to SEs?
• How can we be more strategic in our social investment?
• Is the constraint on NPO/SE capacity building capital or talent, or both? How can it be addressed?
• How can we come to better understand what works?
• Are local SEs maturing and starting to achieve scale?
Social Investment in SE Asia: The Big Questions
What roles could it be expected to play?
• Alleviate specific social issues • Support the larger development agenda • Address issues of inequality • Broader societal engagement with social issues • Possibilities for cross-sector collaboration
What are the potential roles of existingand emerging players?
• Philanthropists • Social purpose organisations • Social entrepreneurs • Businesses • Government • ODA
Traditional Charity
Appendix: Range of People & Organisations with Social Purpose
Revenue Producing Non-profits
SustainableNon-profits
EntrepreneurialSocial
Enterprises
Inclusive Businesses
Issue-based
Community-based
Cooperatives
Community leaders & social entrepreneurs
Start-ups
Innovation
(Often tech-linked)
Products & services for BoP
Livelihood enhancement
Frequent Characteristics
of Organisations
LikelyFounders /
Entrepreneurs
Younger gen social & business
entrepreneurs
Experienced businessmen
(Innovation)
Mainstream Businesses
BoP in supply chain
Social Intrapreneur
Strategic corporate
philanthropy / CSR
“Social Enterprise”