Finance Options for Social Enterprises
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NCIIA Program Managers Humera Fasihuddin and Jennifer Keller Jackson use this simple PowerPoint to give nascent student and faculty entrepreneurs an introductory overview of financing options for social enterprises. Note: This presentation does not define all terms, but is meant to be used as an aid to a verbal presentation of terms and concepts.
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Finance Options for Social Enterprises
- 1. Financing social enterpriseS Humera Fasihuddin & Jennifer Keller Jackson, NCIIA AI2V Sustainable Vision, August 2009, Cambridge, MA
- 2. financing options for SOCIAL ENTERPRISES $ Net Profit Net Loss T Value revenue Customer Funding (Advanced orders, Microfinance, Retainers, Consulting, Company Profit) Self, FFF, Competition, Strategic for profit funders SBIR, STTR, Gov’t Angel Investors (VentureWell)* Venture Capital* PRI non-profit funders NCIIA Univ. Discretionary Self, FFF, Competition, Strategic Gates Foundations Gov’t Grants to Univ.
- 3. what matters to investors Financial People self, NCIIA Impact angel Market Technology venture capital debt 25% 50% 75% 100%
- 4. impact investors :: for profit (sampling) these categories are not fixed early/seed angel venture capital acumen fund gray ghost ventures commons capital venture well investor’s circle boston harbor angels (each city has them) kiva.org rice, oxford, GSVC b-plan competitions SBIR/STTR grants Impact investing :: investment that generates social and environmental value as well as financial return (source: rockefeller foundation)
- 5. impact loans or grants :: non profit (sampling) these categories are not fixed early/seed grants expansion foundations (scale) nciia university discretionary alumni NGOs gov’t grants (NSF, NIH, AID) gates foundation clinton global initiative schwab foundation skoll foundation annenberg foundation shell foundation good capital echoing green some foundations Program Related Investments (PRIs) :: investments made by foundations that involve the potential return of capital. PRIs include financing methods commonly associated with banks or other private investors, such as loans, loan guarantees, and even equity investments in nonprofits or in commercial ventures for charitable purposes. (source: foundation center)
- 6. food for thought :: spend time finding investors vs ‘just do it’ An increasing breed of ‘Impact Investors’ are looking for social enterprises (see video) SocCap Conference: http://www.socialbrite.org/tag/social-enterprise/ You can spend your time thinking, planning & fine-tuning… OR you can start demonstrating traction (see video) KIVA, Premal Shah, Founder: http://www.alternativechannel.tv/ communication-durable/videos/Social-Edge/Premal-Shah-Kiva-X-interviews/ 1640/;jsessionid=9A9DF868C7E08D193FCE04A7C77AB42D
- 7. Thank you Humera Fasihuddin & Jennifer Keller Jackson, NCIIA AI2V Sustainable Vision, August 2009, Cambridge, MA
Notes de l'éditeur
- Grants vs. investments
- Expansion and scale are investments not grants * Only a few make PRIaPRIs are often made to organizations with an established relationship with the grantmaker. * Foundations commonly make PRIs as a supplement to their existing grant programs when the circumstances of the request suggest an alternative form of financing, when the borrower has the potential for generating income to repay a loan, and as a last resort when an organization — in most cases a charitable nonprofit but occasionally a commercial venture — has been unable to secure financing from traditional sources. * For the recipient, the primary benefit of PRIs is access to capital at lower rates than may otherwise be available. For the funder, the principal benefit is that the repayment or return of equity can be recycled for another charitable purpose. PRIs are valued as a means of leveraging philanthropic dollars.