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From Charity to Change: Social investment in selected Southeast Asian countries
- 1. From Charity To Change Social Investment in Selected Southeast Asian Countries
- 2. 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
- 3. Complete Capital Framework Financial Intellectual Social Human Adapted from Nonprofit Finance Fund, U.S. Social Solutions
- 4. 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
- 5. 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 existing and emerging players? • Philanthropists • Social purpose organisations • Social entrepreneurs • Businesses • Government • ODA
- 6. 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
- 7. Traditional Charitable Giving Dominates 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
- 8. Traditional Charitable Giving Innovators 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
- 9. Corporate Venture Philanthropy Push factors Mandatory CSR Funds Extractive industries Disability employment quota fines Reputational CSR Potential of Corporate Philanthropy: Beyond CSR
- 10. Corporate Venture Philanthropy Push factors Pull factors 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 Corporate Philanthropy: Beyond CSR Disability employment quota fines
- 11. 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
- 12. • 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
- 13. 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
- 14. 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
- 15. 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
- 17. 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”
- 18. Indonesia: Capital Needs • Human : capacity builders / incubators • Financial : smart capital / intermediaries • Intellectual : internal and external landscaping • Social : cross-sector collaboration platforms / convenors
- 19. Indonesia Highlights Strategic implementers Ecosystem innovators
- 20. 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
- 21. 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
- 22. Philippines Highlights Collaboration & networks Innovative funds Xchange( PEACe Bonds
- 23. 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)
- 24. 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
- 25. 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
- 26. Singapore Highlights Numerous field support organisations Regional hub developing
- 27. 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?
- 28. 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 existing and emerging players? • Philanthropists • Social purpose organisations • Social entrepreneurs • Businesses • Government • ODA
- 30. Traditional Charity Appendix: Range of People & Organisations with Social Purpose Revenue Producing Non-profits Sustainable Non-profits Entrepreneurial Social 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 Likely Founders / Entrepreneurs Younger gen social & business entrepreneurs Experienced businessmen (Innovation) Mainstream Businesses BoP in supply chain Social Intrapreneur Strategic corporate philanthropy / CSR “Social Enterprise”