COMM5030 Social Entrepreneurship Practicum
Social Entrepreneurship Practicum
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COMM5030
Social
Entrepreneurship
Practicum
Social
Impact
Investment
What is Social impact investment
• Why do it?
• Who can invest
Governments investing social impact
Social Impact investment mechanisms
• Philanthropy
• Social Financing
• Microcredit and Micro Finance
• Social Impact Bonds
Social Impact
Investment
Social impact investment is a form of investment that is
made into companies, organisations and funds with the
intention to generate measurable social and
environmental impact alongside a financial return
Global Investing Impact Network, 2015
Why
invest in
impact?
Impact investing is particularly attractive to those who wish to use
the power of their finances and capital to generate a positive
social and environmental impact
Who can
invest?
Businesses
Corporations
Governments
Individuals
Investment
development
portfolio
1. The economic and financial; returns
to the investor
2. the environmental benefits and
sustainability of the investment; and
3. the social impact on local
communities through things such as
training, development and employment
Government Investment - NSW
Better services and
results
• Opportunity to test
innovative ways to
address social
challenges
• Focus on measurement
• Focus on delivery
Better partnerships
between the government
and non government
sectors
• Governments play an
enabling role for
organisations to deliver
social impact through
policy settings
Better value for tax
payers
• Driving greater service
delivery and outcomes
Social Impact Investment Policy, February 2015
Outcomes based approach
Principles for Social Impact Investing:
1.Government as Market Enabler and Developer
2.Value for money
3.Robust outcomes-based measurement and evaluation
4.Fair Sharing of risk and return
5.Outcomes that align with the Australian Government’s
policy priorities
6.Co-design
https://treasury.gov.au/programs-initiatives-consumers-community/social-impact-investing/australian-government-principles-for-social-impact-investing
Social Impact Investment
mechanisms
Ways to attract financial
& capital investors
1. Philanthropy
2. Social Financing
3. Microcredit and Micro Financing
4. Social Impact Bonds (SIB’s)
Philanthropy
GREEK TERM MEANING: LOVE MANKIND
Where and How?
Philanthropy can be done by:
• Donating money to a charity
• Volunteering at a local shelter
• Raising money to donate to cancer research
Philanthropy occurs in the following sectors:
• Charities
• Culture
• Arts
• Health
Investor receives no economic return on
the investment they make
The rise of Philanthropy - Foundations
Social Financing
SEEK DIRECT SOCIAL OUTCOMES
3 prong strategy to social financing
Identify potential
investors who seek to
generate both an
economic and social
return on investment
1
Identify investors more
strongly focused on
social outcomes of
investment
2
Target individual
donations to finance
social outcomes
3
Microcredit
& Micro
Finance
PROFESSOR MUHAMMAD YUNUS
“The fact that the
poor are alive is
clear proof of
their ability”
The key
differences in
Yunus’
approach
The target audience of microcredit loans
were women living in extreme poverty;
The amount of the loan was small and
therefore manageable within this group's
income stream; and
Through building community control over the
loan, the women were more likely to repay
the loan within the required timeframe
Social
Impact
Bonds
FINANCIAL INSTRUMENTS
SIB’s –
how they
operate
1.Government enters into an outcomes contract to pay for services on an outcomes basis
(rather than fee-for-service or block funding)
2.Investors provide upfront capital to fund services and share performance risk
3.A service provider delivers services to support people with specific needs
4.Outcomes for the individuals enrolled in the program are measured, often compared to a
baseline
5.Government makes payments according to the outcome results achieved