Financing Social Entrepreneurs

Echoing Green is a leading global non-profit that provides seed funding and technical assistance to emerging social entrepreneurs with ideas for social change. The organisation is celebrating its 30 anniversary in 2017. Over that time it has forged a community of global pioneers, now over 700 strong, and played a pioneering role helping accelerate these leaders to impact the world.  Cheryl Dorsey has been at the helm since 2002 and has overseen Echoing Green’s development into a leading global non-profit.

 In this interview, Cheryl takes us back in time to the foundation of the organisation and highlights the central and on-going importance of its fellowship program, providing grant money for social entrepreneurs, and the strength of this community. She also highlights Echoing Green’s work supporting the evolving social entrepreneurship ecosystem and how it has been responding to the changes taking place in the field of social entrepreneurship. Cheryl gives her views on the key trends she sees in social entrepreneurship and impact investing today, and, looking to the future, shares her vision for the future of this unique organisation.

Kevin Starr has been supporting social entrepreneurs for as long as the term has existed. He built the current incarnation of Mulago Foundation, a private foundation that funds early-stage social entrepreneurs devoted to maximum impact at scale in the lives of the poorest people in developing countries. In 2003, Kevin set up Rainer Arnhold Fellows Programme to apply Mulago’s principles and tools to help social entrepreneurs turn good ideas into lasting change at scale. The Mulago Foundation is currently funding fifty or so social ventures including Last Mile Health, One Acre Fund, Blue Ventures, Komaza, and The Boma Project.

 In this revealing interview, Kevin talks about the Mulago Foundation’s investment philosophy and the different ways it supports social entrepreneurs. He presents a simple model of sources of finance for social entrepreneurs-and advises as to the appropriateness of each– and he shares his thoughts on how social impact can best be scaled. Kevin gives a frank assessment of the state of impact investing today, warns of the dangers of investors prioritising business models over impact models, and cautions social entrepreneurs about over-reliance on for-profit business models when working on solutions for the very poor.

John is a highly experienced former business executive and venture capital investor now focussing on social innovation and impact investing. He is a co-founder of Toniic, a syndication network of impact investors, and Senior Director of Impact Capital at Santa Clara University’s Miller Center for Social Entrepreneurship, and he is also a mentor to Social Entrepreneurs at the Center’s accelerator programs.

 This is an in-depth and comprehensive picture of the state of impact investment today by a seasoned investment executive. In this interview, John talks about the origins of Toniic, and its investment activities. He discusses the changing face of impact investing and the growth of new financing vehicles such as structured exits and the demand dividend. John highlights the particular challenges facing social entrepreneurs “crossing the pioneer gap” –the valley of death–trying to raise capital in the $500k -$1 million range. 

 John also provides clear advice for social entrepreneurs and innovators looking to finance a social business. In particular, he explains why social entrepreneurs need to do more to become “investment ready, emphasizes the crucial importance of understanding investors’ perspective, and the “justifiable ask.” 

Omidyar Network is a philanthropic investment firm that consists of a foundation and an impact investment firm. As such, the firm can provide whatever type of capital is necessary to support social innovation, whether grants or for-profit investments. Omidyar Network has a distinct approach focusing on scaling entire sectors. To date, it has invested over $1 billion, almost equally divided between its nonprofit and for-profit portfolios.

Scott Wu is a partner at Omidyar Network and leads the firm’s investment, finance, and legal operations.  In this role, he drives the evaluation, selection, and closing of all investments and management of the firm’s overall investment portfolio.  In this interview, Scott talks about Omidyar Network’s distinct approach to investment, the kind of organisations they seek to support, and how they balance considerations of return and impact. 

Scott observes the changing nature of the social investment field and looks at some of the exciting new approaches to finance that are emerging, including repayable debt instruments and social impact bonds. Scott also discusses the three key questions that social entrepreneurs need to answer when looking for funding, and identifies some of the common challenges social entrepreneurs face when seeking to fund their organisations.