Dutch Postcode Lottery Commits to Social Business in Colombia

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On February 15th the annual Dutch National Postcode Lottery #GoedGeldGala was held in Amsterdam.

The lottery proudly announced that the beneficiary partner Yunus+You – The YY Foundation of Wiesbaden, Germany, will receive an extra contribution for a large-scale development project over a period of two years for its implementing partners. The aim of the project is to build peace through social business in Colombia. Yunus Social Business is one of these partners, so we are very happy to be furthering our work in Colombia.

Other beneficiaries among 800 invited guests were the foundations of Keynote speaker Leonardo Di Caprio and Tennis No.1 Champion Rafael Nadal. The Dutch Post Code Lottery has been supporting non-governmental organisations since 1989 and Prof. Yunus is a Goodwill Ambassador for the Postcode Lotteries since 2012.

Our Week In Davos

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“The most interesting people in Davos aren’t the presidents or celebrities, but the social entrepreneurs — those using business tools to address social problems — and their work offers an inspiring window into what can be accomplished.”

 

This quote is from Nicholas Kristof’s New York Times piece and of course, we would have to agree! We were proud to be among the world leaders and business heads at the World Economic Forum last week and we had an incredibly eventful and productive time. Our main goal was to spread the movement of social business but of course also to play a little game of ‘Spot the Trump’.

Here are our highlights:

Our Social Success Note Partnership with UBS & Rockefeller 

The first exciting announcement for us this year at Davos was the release of UBS’s World Economic Forum white paper “5 ways wealth managers can support the UN Sustainable Development Goals: our lessons from 2017” documenting innovative solutions to solving inequality. The paper promotes our alliance along with the Rockefeller Foundation and Impact Water to develop the first social success note supporting clean water and sanitation in East Africa. Read more about our commitments here: https://goo.gl/Ck7a7S

We met with Managing Director Saadia Madsbjerg and the newly appointed President of the Rockefeller foundation Raj Shah, as well as Phyllis Costanza who heads the UBS Optimus Foundation to celebrate the social success note focussed on clean water in East Africa. As the world’s largest wealth manager, UBS are in a position to enact real change in closing the inequality gap and we are really happy that they have partnered with us to deliver philanthropic capital spending in a more sustainable way.

YSB Taking The Stage

Our CEO and Co-founder Saskia spoke on the Credit Suisse panel “How to create impact that affects a billion people”. She was joined onstage by Sung-Joo Kim, the CEO of the luxury German brand MCM, the CEO of International Wealth Management for Credit Suisse, Iqbal Khan and venture capitalist Chemi Peres. The aim of the event was to connect today’s and tomorrow’s investors to explore new impact investing concepts.

The panel was co-initiated by the YIO (Young Investors Organization), a network for the next generation of the investors around the world, aiming to accelerate the growth and development of young individuals so that they can leave their own footprint. It’s great to see a focus on the younger generation and we were particularly inspired by the co-founder of Ruang Guru, Iman Usman, who is bringing digital education to 6 million people in Indonesia. It’s fantastic that impact investing and philanthropic capital given as impact investments are represented on the stage at Davos, and we are grateful to Credit Suisse and especially Viola Werner for organising this event and sharing our vision.

 

Global Goals Cast

We met with the founders of the Global Goals Cast, a podcast that inspires and empowers listeners to make the world a better place by sharing the stories of individuals, companies, and organisations who are advancing and achieving a more sustainable world. Each episode offers inspirational stories, high-quality data, and numerous ways to take action and personally contribute to the global efforts of making the goals’ achievement possible. As we are an organisation driven by and committed to the UN Sustainable Development Goals, initiatives like Global Goals Cast are incredibly important to make these goals easier to understand, more relatable and feel more attainable for everyone. We really look forward to hearing more from them.

Standing Up For Social Progress with the B Team

As long-term partners of the B team, one of our favourite sessions “Standing Up for Social Progress”, discussed the role and responsibilities of business leaders to take a stand on social issues of moral and political controversy, and what it takes to truly drive social change within large global organisations. We are always impressed by the amount of stats that Unilever CEO Paul Polman has on the tip of his tongue. That; “12-14% of global GDP is spent on war prevention when only 4-5% is used to implement the Sustainable Development Goals. How can we think we are the world’s smartest species?”. Agreed Paul.

Oxfam’s Poignant Message On Inequality

We were happy that Oxfam’s “Reward Work Not Wealth” report on inequality made such a splash. The report made clear that to end the inequality crisis, we must build an economy for ordinary working people, not just the rich and powerful. A message very close to our hearts as supporters of social entrepreneurs. It was incredibly important for us to be present on the global stage at Davos to speak with global corporates and heads of state, to convince them that we should be investing and prioritizing entrepreneurs and small-scale food producers.

 

 

A Mention In Le Monde…

To round off the week, we were featured in Le Monde alongside the French Minister for the Economy, Bruno Le Maire and, CEO of JPMorgan Chase, James Dimon. After Macron reiterated his committed to the Paris agreement and the UN Global Sustainable Development Goals. Saskia was quoted as a “big fan” of Macron, as he “brings a breath of fresh air into Europe“.

What an inspiring week – thanks for having us WEF 2018.

Social Business Spotlight: Impact Water

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Over 9 million Ugandans lack access to safe drinking water, that equates to the entire population of London. Without access to clean water, it is estimated that 440 children still die every week due to waterborne diseases. Impact Water are trying to change that…

The UN Conference on Sustainable Development in 2012 recognised, “that water is at the core of sustainable development as it is closely linked to a number of key global challenges”, and reiterated “the importance of integrating water in sustainable development”. We know that health has a knock on impact on education, and every year children lose 272 million school days due to diarrhea, a leading cause of mortality that is commonly water-related. It is estimated that 40% of these diarrhea cases are attributable to transmission in schools rather than homes.

“Every year children lose 272 million school days due to diarrhea”

In Uganda, most schools rely on piped or borehole water which is not safe, threatening student health and education. The many schools that do treat their water use firewood stoves to bring water to the boil. The time and fuel cost of boiling water for the entire school population is significant, inevitably leading schools to not treat sufficient amounts of water. Boiling water has an additional negative effect on the environment. Ugandan schools can consume as much as 38 tonnes of firewood per year just to boil water for their students. With over 20,000 schools in the country and one of the world’s fastest growing populations, alternative water treatment solutions are urgently needed, not only to address demand but to help protect Uganda’s already threatened forests.

Ugandan schools can consume as much as 38 tonnes of firewood per year.

Enter Impact Water. Their mission is to increase access to safe water, focusing on school and health facilities.They sell, install and maintain environmentally-friendly water purification systems to schools on low cost, multi-year credit terms. This helps schools to avoid burning firewood for boiling water, offsetting CO2 emissions while reducing medical costs for the families by avoiding waterborne diseases. Improved student health enables students, and their teachers, to better focus on their education and their futures. One of the recipients of Impact Water’s tanks, Haji Kyabangi Yahaya, the Director of the Gangu Muslim Primary, noticed that before the installation of the tank they had around 6 cases per week of waterborne diseases. After installation, they did not have a single case.

“They sell, install and maintain environmentally-friendly water purification systems to schools on low cost, multi-year credit terms.”

Haji Kyabangi Yahaya, the Director of the Gangu Muslim Primary

Impact Water

The purification systems are huge pieces of equipment which aren’t cheap, typically costing around $1,200 – $2,000. As an upfront cost, this is considered by schools as simply too high. To counter this large expense, Impact Water offers credit services to allow customers to pay for their systems over time, typically between one and two years. Installment payments are timed to work with the needs of the institution. For instance, a school will pay three times per year when they receive school fees at the beginning of each school term. This is game-changing for schools, not only because their credit services do not require collateral but also because the payment cycle is so much more manageable. Most schools have extremely limited financial resources so the unique service that Impact Water offer is the difference between access to clean water or not. To Impact Water’s knowledge, the business is the first of its kind to customize payment terms for institutional safe water to the unique cash flow environments of developing country schools.

Since Impact Water’s launch in Uganda in October 2014, they have successfully sold and installed over 1600 school water purification systems. They control the quality of their service by procuring all system components themselves, sourcing from top global suppliers at volume discounts, and delivering all services via their own employees.

“They have successfully sold and installed over 1600 school water purification systems”

However, their success has not come without challenges, which they are quick to recognize. Safe water initiatives are notorious for failing after one to two years. This is often due to technology failure; lack of maintenance, repair services and capacity; community buy-in and challenges with behavioral change. The socio-economic, environmental and health benefits associated with safe water depend solely on its ongoing provision, and therefore sustained social impact is only achieved when systems remain operational. Impact Water’s ability to keep systems functional beyond this two-year period and combined with its scale of operations, is the factor they have recognized will significantly distinguish them from other safe water initiatives. Therefore, they have built-in preventive maintenance to each sale and deliver every four to six months (depending on water quality) for the first two years of operations. Consequently, greater system lifetime and utility equates to greater value for customers and increased demand.

“Safe water initiatives are notorious for failing after one to two years”

 

Results to Date

  • The 1600 water purification systems sold to developing country schools since the business launched in Uganda October 2014, has benefited over 600,000 students.
  • Inception to date payback rates have been strong, with 92% payback rate overall and less than one third paying late by greater than one school term. Systems are inspected by Impact Water staff twice a year, and component parts replaced when needed.

By the end of 2018, the business expects to have sold to over 10,000 developing country schools, benefiting 5 million students. By 2020, Impact Water expects to be in 12 countries with a projected 15-20,000 annual system sales and to create over 7.5 million new beneficiaries per annum.  It’s an ambitious plan but one Impact Water believes is achievable given its unique value proposition and the size of the developing country school market alone (not to mention other viable segments including health facilities, religious and community institutions, workplaces, government buildings, restaurants and hotels). In looking at the size of the school market in Africa alone, there are over 600,000 public schools and about 150,000 private schools.

The social impact potential of the business is far-reaching. Some examples include:

  • Improved dignity and health for millions of school children and health facility patients;
  • Socio-economic advancements which result from reduced absenteeism at school;
  • Improved gender ratios when safe water is combined with improved sanitation services as menstruation management becomes easier for girls;
  • Financial savings (as boiling and buying bottled water is expensive);
  • Reduced biomass consumption and a corresponding decrease in indoor air pollution as these safe water systems will replace the need to boil water resulting in large carbon dioxide, methane, carbon monoxide, and particulate matter emission reductions; and
  • Job creation, particularly for the youth, as they become employed in selling and installing systems.

YSB contributes to EVPA Report on Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance

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Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance

How can venture philanthropy organisations, social investors and impact investors, improve the way they allocate resources to their investees?

To answer this question the EVPA Knowledge Centre embarked on a nine-month journey with a group of over 30 experts, in which we took part as well. The result is the new EVPA report “Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance”, launched at the EVPA Annual Conference in Oslo on 9 November 2017. This new piece of research looks at how funding can be shaped in a way that meets the financial needs of the social purpose organisation (SPO) and at how different actors can collaborate in the VP/SI space to bring more resources to SPOs.

EVPA has developed a three-step process to help VP/SI organisations find the most suitable financial instrument to support a SPO. The process is known as tailored financing and it is addressed in the first part of the report.

The report also focuses on hybrid finance, which is defined as the allocation of financial resources to impact-oriented investments, combining different types of financial instruments and different types of risk/return/impact profiles of capital providers.

One of the main conclusions of the report is that tailored financing and hybrid finance promote a more efficient and effective deployment of resources in the VP/SI space. They can represent a way to solve the existing funding gap that prevents SPOs from gaining access to the capital needed for achieving self-sustainability and for scaling.

You can download the report here

If you have questions about the report, you can contact the EVPA Knowledge Centre at knowledge.centre@evpa.eu.com

Prof. Muhammad Yunus Releases New Book “A World Of Three Zeros”

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A World Of Three ZerosOur Chairman and Co-Founder, Prof. Muhammad Yunus offers his vision of an emerging new economic system in his new book ‘A World of Three Zeros: The New Economics of Zero Poverty, Zero Unemployment, and Zero Net Carbon Emissions’.

Yunus created microcredit, invented social business, and earned a Nobel Peace Prize for his work in alleviating poverty. Now he declares it’s time to admit that the capitalist engine is broken – that in its current form it inevitably leads to rampant inequality, massive unemployment, and environmental destruction. We need a new economic system that unleashes altruism as a creative force just as powerful as self-interest.

bee farmer

At YSB, we are really excited to have some of our businesses such as Golden Bees feature in the new book, showing how the concept of social business can be realised in our shared vision for A World of Three Zeros.

In his book, Yunus explains how thousands of people and organisations have already embraced this vision of a new form of capitalism, launching innovative social businesses designed to serve human needs rather than accumulate wealth. They are bringing solar energy to millions of homes in Bangladesh; turning thousands of unemployed young people into entrepreneurs through equity investments; financing female-owned businesses in cities across the United States; bringing mobility, shelter, and other services to the rural poor in France; and creating a global support network to help young entrepreneurs launch their start-ups.

In A World of Three Zeros, Yunus describes the new civilization emerging from the economic experiments his work has helped to inspire. He explains how global companies like McCain, Renault, Essilor, and Danone got involved with this new economic model through their own social action groups, describes the ingenious new financial tools now funding social businesses, and sketches the legal and regulatory changes needed to jump start the next wave of socially driven innovations. And he invites young people, business and political leaders, and ordinary citizens to join the movement and help create the better world we all dream of. 

‘A World of Three Zeros’ is available now from all good bookshops.

Our 2016 Annual Impact Report is online!

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Whoop whoop! Our social businesses almost doubled their client base last year. The 2016 Annual Impact Report is out with a personal message from Prof Yunus:

“Let’s have 1 percent of the economy be social businesses in the next five years”. 

Download here

Survey on Scaling Social Businesses In Emerging Economies

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What keeps social entrepreneurs in developing countries from growing their ventures? Around the world social entrepreneurs are creating innovative businesses that reduce poverty and improve the lives of their customers. These pioneers often encounter many hurdles along the way that make growing a social business a significant challenge. With insights from more than 120 interviews with early-stage social entrepreneurs in developing countries, we explore the common financial and non-financial obstacles they face.

The survey showed that access to financing is still a major issue for most of the entrepreneurs: loans are expensive, require significant personal collateral and traditional financing providers don’t take the social mission of the business into account. Besides access to capital, especially in the missing middle, social entrepreneurs also have challenges finding new customers for their products and services, managing their operations and technical excellence, as well as recruiting and retaining high quality staff. Based on our findings we distilled specific conclusions and recommendations for entrepreneurs, investors and intermediaries. We want to thank the Robert Bosch Stiftung, which has made this publication possible.