Our 2013 Global Social Impact Investing Program

By Den­nis Shaughnessy 

Impact invest­ing, or invest­ing for both finan­cial return and social impact, is an emerg­ing new inter­dis­ci­pli­nary field, and one that we are ded­i­cated to con­tribut­ing to here at SEI.

Our third annual Impact Invest­ing Pro­gram event was held on our Boston cam­pus on Decem­ber 4, 2013.  This pro­gram and event are spon­sored by SEI, the D’Amore-McKim School of Busi­ness, and the Hon­ors Pro­gram.  Nearly sixty under­grad­u­ates par­tic­i­pated in iden­ti­fy­ing, eval­u­at­ing and pre­sent­ing eight social enter­prises for invest­ment from an ini­tial pool of $20,000 in invest­ment cap­i­tal.  The cap­i­tal was pro­vided by our three spon­sor­ing organizations.

This unique Impact Invest­ing Pro­gram is embed­ded in a fresh­man hon­ors pro­gram sem­i­nar in the role of the pri­vate sec­tor in global devel­op­ment, as well as a new busi­ness school course in social impact invest­ing.  In these classes, stu­dents study the “other side” of social enter­prise, mean­ing the sec­tor that pro­vides cap­i­tal to enter­prises seek­ing to solve social prob­lems using inno­v­a­tive and effi­cient new busi­ness models.

The invest­ment theme for this year’s event was enter­prise solu­tions to extreme poverty in the devel­op­ing world, with a focus on new ven­tures that pro­vide both solu­tions to social prob­lems while pro­vid­ing employ­ment or liveli­hood oppor­tu­ni­ties for women and youth.  The “liveli­hood” space within social enter­prise and impact invest­ing is a new and excit­ing area that builds upon the suc­cesses of pio­neer­ing sec­tors, like micro­fi­nance, in cre­at­ing oppor­tu­ni­ties for self-reliance.

A panel of judges eval­u­ated the stu­dent invest­ment pro­pos­als for eight orga­ni­za­tions that are or plan to deliver liveli­hood oppor­tu­ni­ties in very poor com­mu­ni­ties while solv­ing per­sis­tent social prob­lems such as long-term unem­ploy­ment, energy poverty, the dis­em­pow­er­ment of women and the lack of afford­able and acces­si­ble basic every­day products.

The judges included DMSB senior fac­ulty and staff, SEI donors and impact invest­ing experts: Pro­fes­sor Marc Meyer (DMSB), Pro­fes­sor Mau­reen Kelle­her (Hon­ors Pro­gram); Bob and Denise DiCenso and Alan Green (SEI donors); and Will Barker of The Barker Foun­da­tion and Miguel Granier of Invested Development.

Stu­dents eval­u­ated nearly a hun­dred impact invest­ing oppor­tu­ni­ties over the course of the semes­ter, and from that large screen they arrived at their final eight orga­ni­za­tions for con­sid­er­a­tion.  These orga­ni­za­tions were: Liv­ing­Goods (Uganda), Par­a­digm Project (Kenya), Afghan Insti­tute for Learn­ing (Pak­istan, Afghanistan), Empower Gen­er­a­tion (Nepal), Learn to Earn (South Africa), Vision­Spring (US, India), Live­ly­hoods (Kenya) and Aakar Inno­va­tions (India).

Dur­ing the course of panel delib­er­a­tions, and addi­tional $10,000 was pledged to the invest­ment pool, increas­ing the total to $30,000.

The impact invest­ment pro­pos­als devel­oped by stu­dents were designed for pro­gram invest­ments for new or devel­op­ment stage projects that evi­dence social inno­va­tion, finan­cial sus­tain­abil­ity and a com­mit­ment to impact mea­sure­ment and eval­u­a­tion.  The invest­ment, unlike a gen­eral dona­tion to a char­ity, will be ded­i­cated to accom­plish­ing spe­cific goals with defined intended out­comes and timelines. 

From this group of promis­ing invest­ment can­di­dates, the fol­low­ing orga­ni­za­tions were selected for investment:

            Aakar Inno­va­tions (India; $15,000)

            Empower Gen­er­a­tion  (Nepal; $5,000)

            Live­ly­hoods (Kenya; $5,000)

            Vision­Spring  (Global; $5,000)

Aakar Inno­va­tions, fea­tured in an ear­lier edi­tion of the newslet­ter, is an early stage social enter­prise located in Delhi, India that pro­vides a unique and low-cost “mini-factory” model for man­u­fac­tur­ing san­i­tary pads for the mil­lions of women in rural India who do not use fem­i­nine hygiene prod­ucts at an afford­able price.  The fac­tory is based on a new, low cost pro­duc­tion machine that stands at the cen­ter of an employee-ownership model.  SEI also plans to place under­grad­u­ate “fel­lows” at Aakar to con­tribute to the devel­op­ment and scal­ing of this impor­tant new women empow­er­ment model.  $10,000 will be invested to finance two new mini-factories, with an addi­tional $5,000 sup­port­ing SEI’s co-op fel­lows program.

Empower Gen­er­a­tion is a start-up social enter­prise in Nepal that enables poor women to begin micro-businesses sell­ing clean energy prod­ucts in their com­mu­ni­ties.  The orga­ni­za­tion has a prod­uct devel­op­ment fund that will fund the cre­ation of new prod­ucts like solar lights and clean cook stoves, and a micro­fi­nance fund that will finance the cre­ation of new micro-enterprises to sell these prod­ucts at an afford­able price.  Empower Gen­er­a­tion offered a match­ing investor, bring­ing this total invest­ment to $10,000.

Live­ly­hoods is also a start-up social enter­prise located in Nairobi with a mis­sion to cre­ate liveli­hoods for youths in the urban slums.  They use a branded door-to-door sales force made up of unem­ployed youth who develop the skills and expe­ri­ence that will enable them to suc­ceed in the work­place.  The $5,000 will be used to open and man­age a new retail out­let in a Nairobi slum.

Vision­Spring is a well-established social enter­prise that pro­vides afford­able and high-quality glasses and other opti­cal goods and ser­vices to poor peo­ple in the devel­op­ing world.  Their inno­v­a­tive “vision entre­pre­neurs” pro­gram sup­ported by War­by­Parker is a more thought­ful alter­na­tive to some of today’s pop­u­lar “buy one give one” mod­els. The funds will be ded­i­cated to pro­vid­ing eye­glasses to a com­mu­nity where SEI has an exist­ing field part­ner and stu­dent program.

We’re excited about the oppor­tu­nity to invest in these inno­v­a­tive and com­pelling new social enter­prises, as well as develop part­ner­ships for learn­ing and knowl­edge devel­op­ment in the social impact invest­ing space. 

We see impact invest­ing as a rapidly grow­ing and crit­i­cally impor­tant seg­ment of the finan­cial world, and are pleased to be able to both teach young peo­ple about the the­ory and prac­tice of this new field, and also sup­port enter­prises com­mit­ted to improv­ing the lives of the poor through the cre­ation of opportunity.