Diverse non-commercial capital sources for social enterprises in New York City were introduced at the SRI panel last week by panelists from the NYC Venture Philanthropy Fund, the Fast Forward Fund, Givology, the Acumen Fund, and Microlumbia. SRI takes the form of grants, loans, or equity investment and is the latest wave of financing for social enterprises today. Regardless of the form, SRI is characterized by its focus on the double bottom line (financial as well as social impact) and accountability for results – not only output or services rendered, but also the impact of these products or services upon individual lives and communities – an even higher standard than commercial enterprises must meet. As traditional financial investors show an increasing acceptance of social as well as financial returns, the non-profit sector is innovating new mechanisms to invest in social enterprises with financially sustainable business models that offer payback to investors (e.g. through loans or equity investment with a limited return).
Olga Serhiyevich (an Associate and member of the Microfinance Forum Steering Committee at Morgan Stanley and board member of the Microfinance Club of New York moderated the event with provocative questions and analysis.
The NYC Venture Philanthropy Fund's chair, Heather Rees, explained the fund’s goal to make philanthropy accessible to all individuals by opening membership to individuals who commit to contribute $1 per day, i.e. $365 per year. The fund, run by volunteers, pools individual contributions to make a larger grant and technical contribution to a New York City social enterprise in a democratic selection process.
Diana Ayton-Shenker is developing a youth philanthropic or social investor movement as President and CEO of the Fast Forward Fund. The fund, to launch in several weeks, will empower youth, normally taught to wait until adulthood to have a financial impact upon society, to invest in other youth social enterprises to create global change.
Givology is another new organization in the field of microphilanthropy which enables individuals to contribute to the education of youth in the developing world, a key driver of economic development. Launched by its President Jennifer Chen, Givology recipients provide evidence of the impact of the investment in their education to their investors through their own reporting on this experience.
Molly Alexander, Business Development Manager at the Acumen Fund, described how the fund invests in enterprises in the developing world that solve critical issues in health, water, housing, and energy through its philanthropic and investment funds. An outstanding leader in the field of social venture capital, Acumen supports sustainable business models with capital and management assistance to produce financial and social returns and broad scale social impact.
Microlumbia, represented by Danielle Noto, is a non-profit that enables Columbia Business School students to provide consulting services to microfinance institutions (MFIs) in the developing world, to conduct due diligence on MFIs for investment, and provide education and marketing services. Sustainable due to its volunteer student staff, it is preparing for potential debt investment into selected MFIs.
The panel was unanimous in affirming that SRI is a fast growing field with new opportunities for funding appearing constantly.
Hosted by:
New York Women Social Entrepreneurs
Columbia University Multicultural Business Association
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