Thursday, 24 April 2014

3 ways philanthropists can finance social innovation that works to scale

This blog is based on an article that I co-wrote with my Numbers4Good co-founder Bertrand Beghin in Philanthropy Impact Magazine.

Last week, I touched on how philanthropists can support social innovation. However, moving forwards, once innovations have been proven; they have historically struggled to attract the capital that enables them to scale up... So, what can be done?

With the advancing over the past few years of the social impact investing market, social enterprises have opportunities to scale and there are now tangible options for philanthropists can play a vital role in ensuring that the innovations can scale – and if they wish – make a financial return as well as creating a social impact. Options could include:
  1. Invest in social investment funds: There are an increasing number of philanthropists and foundations that are investing in social investment funds. Examples in the UK include Esmee Fairburn, and Pierre Omidyar’s – the founder of eBay – Omidyar Network and internationally include the Gates Foundation and the Gatsby Foundation. The funds that these foundations are investing in finances social innovations that require scale up capital in order to increase their impact ranging from UK social enterprises to international development organisations.
  2. Directly invest in social enterprises: With the introduction of the Social Investment Tax Relief, the opportunity for individuals to invest in social enterprises will soon have similar advantages than EIS/SEIS (in the UK), bringing a whole new source of capital into the scaling of social ventures. On a different point, sometimes investors struggle to invest in scaling social innovation, because of the risks associated, therefore, if philanthropists or foundations, could offer to take a first loss stake in certain types of innovations – or indeed funds – it would enable more capital to be leveraged from other types of investors and flow into scaling social innovation.
  3. Invest in social impact bonds: Social impact bonds are designed to improve the social outcomes of publicly funded services by making funding conditional on achieving results, often used as preventative interventions or to develop new innovative models. Investors pay for the project at the start, and then receive payments based on the results achieved by the project. With the announcement of the inclusion of social impact bonds in SITR, they will also enable philanthropists to invest for a social benefit efficiently.
Great ideas need money to be piloted and then to scale; without philanthropy this would not be possible. Philanthropists need to – and do – play a vital role in ensuring that life saving innovations don’t just remain ideas in people’s heads but are piloted and then transform the livelihoods of millions of people.

Monday, 14 April 2014

3 things philanthropists can do to support innovation

This blog is based on an article that I co-wrote with my Numbers4Good co-founder Bertrand Beghin in Philanthropy Impact Magazine.

Philanthropy is at an exciting place on the world stage; it is at the forefront of solving some of the world’s global issues, yet people are realising that individual governments, businesses and voluntary sector organisations – or philanthropists – don’t have the whole answer. Conversations at Davos earlier this year were peppered with the role of philanthropy in working with government, civil society and business and the World Economic Forum has recently created a Foundations Community. In 19th and 20th Century Britain, pioneering social innovations came to the fore such as the ragged school movement, new models of childcare developed by Barnado, social housing pioneered by Peabody and Joseph Rowntree transformed social care.

More recently – from the Teach First/Teach for All models to microfinance – social innovation has changed the lives of millions of people trapped in poverty around the world. However, with youth unemployment hitting pandemic levels globally and climate change racing out of control, there is a real need for innovations to come to the fore to tackle some of our world’s greatest challenges. So how can we ensure that innovations don’t just remain ideas but are piloted and have sustainable business models moving into the future?

Here are a few ways philanthropists can support social innovation:
  1. Run a challenge prize: Challenge prizes – financial awards for ideas that aim to solve specific challenges – have a long history; the Longitude Prize helped pioneer the chronometer 300 years ago to the more recent Ansari X Prize on space travel. Over the past decade, there has been an increased amount of challenge prizes in social innovation; ranging from the excellent work by Nesta and their Centre for Challenge Prizes to the Hult Prize and the D Prize.
  2. Support a social incubator: Social incubators are organisations that offer intense support to social enterprise start-ups. The UK Government has been very active in this space by providing match funding through the Social Incubator Fund. We are working with Healthbox and UCLB (UCL's spin out organisation) spin out  to set up an incubator in health. Other incubators include the Young Academy’s work on education, Social Incubator North and UnLtd-Wayra – a collaboration between UnLtd (the UK’s Foundation for Social Entrepreneurs) and Telefonica/O2’s technology innovation unit.
  3. Build a venture philanthropy fund: Venture philanthropy takes concepts and techniques from the venture capital sector, such as finance and business management strategies and applies them to achieving philanthropic goals. It works to build stronger social purpose organisations by providing them with both financial and non-financial support in order to increase their societal impact. Outstanding examples of venture philanthropy funds include Impetus-PEF focusing on education and employment. 
If you're interested in thinking through how to judge how powerful a social innovation could be, do check out my 8Ps of Powerful Social Innovation.

I'd love to know your thoughts on how philanthropy can support innovation. Do get in touch with any ideas!

Back to blogging

After a break, I've decided to start blogging again! A lot has happened to me since I was regularly blogging before. My son David is one and a half and Numbers4Good is roughly the same age.

This blog will be focused on helping other leaders, entrepreneurs and social entrepreneurs on the journeys of starting and growing what they lead. As a result, I write on entrepreneurship, society and also the views of Millennials. Sometimes I write on topics that don't fit neatly into one of these categories.

Please do feedback on what I write, write comments and let me know your thoughts. I'm excited about the conversation!

Wednesday, 12 March 2014

Numbers4Good, UCLB and Healthbox launch Health Social Innovators’ Fund

I'm really excited that Numbers4Good has partnered with UCLB (UCL’s technology transfer organisation) and Healthbox (the leading global health accelerator) to create the Health Social Innovators’ Fund supporting some of the UK’s best health social entrepreneurs who are creating solutions helping some of UK’s most vulnerable people. The Cabinet Office have announced today that their Social Incubator Fund is cornerstoning the fund; with the rest of the funding coming from Trafford Housing Trust and Janssen Healthcare Innovations.

We will run two programmes, one in late 2014 and one in 2015 and will be looking for outstanding health social entrepreneurs to support. Numbers4Good will be focusing on helping social enterprises become investment and contract ready; supporting them in winning their first contracts and then raising the investment to scale.

Saturday, 13 October 2012

AchieveGood supports leading social investment organisations in expanding or getting investment from the US

Tomorrow, on behalf of United Kingdom Trade & Investment, AchieveGood is leading a trade mission to Washington DC and New York with the Cabinet Office, enabling social investment organisations to raise their profile overseas, gain inward investment and expand.

We have been working with United Kingdom Trade and Investment for over a year looking at how the trade mission model could support outstanding organisations in the social sector in expanding. Learning from what the private sector has done, we aim for these trade missions to help businesses expansion and the attraction of inward investment. Our mission includes expert masterclasses in doing business in the US, a reception at the British Embassy hosted by the Deputy Ambassador, sessions with US policy and foundation leaders and meeting a number of social investors and investment organisations. This is the first of our sector specific missions. Our Mission organisations are:
For regular updates, please follow #sim2us on Twitter.

Monday, 30 July 2012

Breaking News: AchieveGood's Social & Impact Investment Work joins forces with Bertrand Beghin to become Numbers4Good

Last week, AchieveGood merged its Social & Impact Investment Activity into a new organisation called Numbers4GoodAchieveGood will continue as a social innovation consultancy, supporting others in innovating to tackle social problems. Numbers4Good will be co-led by me and social investment expert Bertrand Beghin. I have come to know Bertrand well over the last 18 months and have worked with him on a couple of projects. I'm excited by the potential of us working together more and creating financial products that do social good!

Bertrand is a former Director at Deutsche Bank, who has been using his skills to support many charities and social enterprises with their investment strategies for a number of years. Numbers4Good's work will include:
  • The Bond for Hope: We're working with our friend, and youth employment and volunteering expert, Mary Jane Edwards and other partners to create a Youth Employment Bond that has been set up as a new Company Limited by Guarantee, The Bond for Hope Limited. Our design phase was recently funded by Big Lottery FundThe bond would help fund jobs in growing industries (such as the Creative and Technology Sectors) with training, mentoring and networking opportunities for the individuals concerned; enabling a return by tapping into UK Government payments such as the Work Programme, Youth Contract and Apprenticeships. Crucially the jobs created by the bond would be targeted at growth industries that can offer sustainable jobs. More about this in the next few weeks!
  • International Development Financing (Mutual Capitalism): We are developing financial products to enable global financial markets to fund sustainable development in the Developing World. Under the banner of Mutual Capitalism, we are designing financial products an innovative model of ownership that seeks to combine the advantages of employee and stakeholder ownership – long term commitment, community buy-in and sustainability in the business model – with the benefits of access to capital – growth, efficiency and scrutiny. It is called Mutual Capitalism because it aims to be mutually beneficial to capital markets and locally owned employees and communities; and combine the models of mutual ownership and capitalism.
  • Education: Numbers4Good is exploring a few potential social investment opportunities in the education space to enable new money to tackle educational disadvantage; this includes looking at sustainable school building in deprived areas and financing outstanding school charities to share their services with existing schools.
  • Health (Restorative Redress): The NHS spends nearly £1 billion a year on litigation. Restorative Redress aims to work alongside the NHS Litigation Authorities (NHSLA) to build a system that, for specific cases of litigation, would offer a process of reconciliation between a victim/family of a victim and a hospital trust as an alternative to legal proceedings. RR will offer those patients and families who wish to participate in new ways to find redress via mediations & discussions with their clinicians, focusing on compassion, mutual understanding and learning. These discussions will be facilitated by trained staff via a process that mixes on-line and face-to-face encounters. The result would not prohibit the victim/family of the victim from returning to a legal proceeding but if avoided, would hope to substantially reduce the costs of litigation cases, therefore reducing the overall NHS litigation budget.

We're both looking forward to it! If you want to learn more, do email info@numbers4good.com.

Tuesday, 26 June 2012

Honesty is the best policy

Last week, I forgot that I hadn't bought a ticket that included Travelcard and had only bought a return to and from London. Somehow, I managed to get through the Underground ticket barriers at Kings Cross St Pancras. However, as I arrived at Covent Garden, I looked at my ticket and realised to my horror I didn't have the right ticket which meant I was eligible for a £40 fine.

I went up to the person responsible for the ticket barriers and explained my situation apologetically, he smiled and ushered me through the gates with not penalty!

It just shows, if you're in a bind, honesty is the best policy!


What's your best example of when you were in an awkward situation and honesty won the day?

Tuesday, 19 June 2012

Are you a Pioneer or a Developer?

I went to a fantastic conference over the weekend and attended a seminar called "Pioneers and Developers working together; leading forwards without blowing up". I've pasted a table from the seminar sheet. It got me thinking, how many people involved in social entrepreneurship are Pioneers and how many are Developers? Often, people are also a combination of the two. Getting the right type of people into an organisation is one of our 8Ps of Powerful Social Innovation.

As a Pioneer, I can relate to many of the characteristics in the first column but also I know that I need many of the qualities in the second column. I know that I need to run quickly and spot opportunities; however, if I don't have someone working with me who can spot the weaknesses and produce quality; staff and our clients are going to either burn out or blow up. Put simply, the impact that we want to have in transforming society won't happen. Pioneers can have a tendency to:
  • be impatient;
  • get bored and be inconsistent; and
  • leave a body count behind them!
Developers also need Pioneers though because they can have a tendency to:
  • want to stay in their comfort zone;
  • can be risk averse; and
  • can have a need to protect people (including themselves) too much.
Do we have a mix of Pioneers and Developers in our organisations? Do we have people who can take ground, but also people who can keep the ground we take? If we don't, our organisations probably won't grow sustainably and we won't have the impact we want; even worse, our organisations might blow up.

Wednesday, 6 June 2012

Want to start a social enterprise? Here are my 5Is of Starting Social Ventures

Recently, I've been thinking a lot about how people set up social ventures; what system do they  follow, what lessons have they learnt etc. I have also thought about how I have helped set up social enterprises such as FranchisingWorks and NurseFirst; and how I've supported philanthropists in starting their new ventures. I have encapsulated this in what I have called the 5Is of Starting Social Ventures. I'd love your comments, and hope it helps you as much as it has helped me!

Idea: Any social venture starts with an idea that can transform society. Have you got an idea? This could be for example, to help young people get better GCSE results, to improve participation in sport or to help people get jobs.

Innovation: For this idea to turn into a reality, it needs to be honed and developed, fusing it with a mixture of sector experience, leading research, and unconventional thinking. For more about what makes a powerful social innovation, read my 8Ps of Powerful Social Innovation.

Incubation: Now the innovation is at a stage where a team needs to be put in place to help turn it into into a fully designed and developed organisation ready to pilot the idea. This process includes business modelling and planning that not only enables the pilot to happen but also enables the new organisation to scale, enabling its impact to be much more significant.

Initiation: Having identified locations to trial and initiate what is by now a new social venture, it's time to set up the organisation itself, press go and pilot! Finding the right location(s) is crucial; ensuring a good mix of stakeholders is key.

Impact: Successful piloting provides the benchmark for social venture expanding and having significant impact, potentially nationally or internationally. At this point, it's time to learn lessons from the pilot(s) and think roll out, perhaps through direct growth, social franchising or replicating through a different means.

If you want support turning your idea into a reality; I'd love to help. See here.

Tuesday, 8 May 2012

Guest Post: Liam Black on being a mentor

Liam Black is co-founder of Wavelength, a global network bringing together business leaders and social innovators. Liam is an award-winning social entrepreneur who has founded and led a number of social businesses. With Jamie Oliver he grew Fifteen into a global brand with businesses in Europe and Australia. Liam's a mentor to young entrepreneurs and a busy writer and speaker on entrepreneurialism and social innovation.

Reading Dom’s blog about what he looks for in a mentor made me think about my mentoring history. I’m a pushover for any young entrepreneur who asks for help and over the years I have mentored/coached/helped scores of them. Dom may be the first Tory I’ve mentored, and despite differing political views, we get on well! Our relationship is proof that the mentor and mentee (awful word) need not share identical beliefs – in fact it can help the mentee get challenging different perspectives.

I have had huge benefit from mentors. My best was Graham Morris who in 1999 I recruited to chair the social business I was then leading. A scouser and a hard man from the car industry, he had more business knowledge in his little finger than I had in my whole body. Graham helped me enormously and pulled off that rare trick of being able to push and challenge me without ever talking down or making me wrong.

My mentoring is a combination of advice giving, door opening, connecting, hooking up with money, getting access to supply chains and, often, simply listening and assuring them they’re not nuts and it is okay to get really mad and have a good cry about how damn hard it is to create and sustain a business of any sort.

Sometimes the help they want is very basic – business model options, branding ideas, getting enough cash to pay next month’s wages (!) – but as a relationship develops and deepens it inevitably becomes more personal and there are many conversations about purpose, balancing the business with personal relationships, fears, exits and rewards.

With social entrepreneurs working with the homeless or deprived youth, an area we soon get into is identity . I try and help them uncouple their own sense of worth from what they are doing. Too many (often middle class) people want to ‘save’ the poor and – albeit unconsciously – tie up their own redemption with their social impact. Many the long hour with a social entrepreneur beating himself or herself up that they couldn’t save so and so from going back to prison or from drinking himself to death. The sooner that people realise that they cannot make anybody do anything, the better their mental health will be and the more sleep they’ll get.

How to remain passionately committed to the cause and not burn out is a regular topic of conversation. Social entrepreneurs can act as if they really believe the world will stop turning if they take a few days off to look after themselves. One of these would be world saviours told me recently the best advice I gave him several years ago when he was up against it was to take a holiday and have some fun. He did; mentoring is not brain surgery.

The worst thing you can do as a mentor is dance round the hand bag or prevaricate. If an idea is crap then tell them. If they repeatedly don’t do what you advise, say goodbye. Sometimes it is about helping them work out better questions but, when I clearly know more than they do about something – or at least have made the very mistake they are about to – then telling them straight not to do something is what is needed. In the world of social enterprise/investment/innovation there is a great deal of self serving guff. Playing the grumpy old man mentor is good for them – “hmm that’s all very well you’ve won the Blogg Sprockets Social Entrepreneur of the Last Ten Minutes Award – but you can’t even pay your rent next month. Get a grip”.

The fact that I actually have become a grumpy old man adds authenticity to this process.

Why do I mentor? The old cliché which all mentors are supposed to trot out is that we get more back from our mentees than we give them. I’m not sure this is true for me – indeed if it is generally true then why do it? But no doubt spending time with younger, passionate, idealistic innovators determined to change the world can be very inspiring. I guess I will keep doing it until they stop collaring me.