Two worlds are colliding and the results can only be fun.
I am sitting in the Impact Investing conference organised by the South African Network for Impact Investing (SAII) and hosted by the University of Pretoria’s Gordon Institute of Business Science (GIBS) and you can see it happening.
There are those of us from the nonprofit background (clearly visible as we don’t wear sharp cut suits or impossibly high heels) and those from the financial world, who talk a strange language of bonds and equity and use acronyms as if they are pronouns.
I often think that the jargon of business is designed to be intimidating so that those of us on the periphery are forever excluded, like little children not invited to the Top Dogs birthday party.
But this week, I had one of those moments where all became clear and suddenly it made sense. I missed the choir of angels and harps accompanying my epiphany, but it was no less dramatic.
We are all saying the same thing - just differently.
There are fund managers out there looking (yes – looking!) for social enterprises to invest in. This took a long time for the fundraiser in me to understand, as these moments are few in the nonprofit world.
These fund managers will take you through a rigorous process assessing your business, your future growth and your ability to survive independently of traditional grants and handouts. You are after all, a business. They do however, despite the sharp suits and high heels, seem to have a heart. They are just approaching us from a different angle.
So no longer can nonprofits assume that business does not understand the world of social service delivery. They bring new insights, which we must acknowledge and respect and vice versa.
So this is the Big Bang, where the world of for and not-for-profits collide.
It is a change in thinking.
We know that the traditional funding model - of dependency on finite grants, and hard-won subsidies - cannot last.
The financial stress and pressure that we all largely operate under means that we can never think ahead. We are always worrying about the now, rather than the where do we want to be.
Impact Investing may not be your thing, but the thinking of this new approach has to be explored and interrogated.
Because it encourages you to develop a social enterprise - a business wing that supports the delivery of social services. Because it is passionate about measurement and accountability. Because taking on financing forces you out of the cushioned security of grant funding and means you have to face up to your own organisational risk: ‘Will it work?’ takes on a whole new meaning when you have to pay the money back.
And let us be honest. This is exactly what the nonprofit world has been calling for. We have just been using different phrases that ask for new funding streams, greater accountability and transparency, as well as ownership by all.
So. Sparks will fly, as our worlds slowly collide. But Impact Investing has gravitational pull and its going to be hard to resist.
- Kerryn Krige is a freelance advisor in development. She has worked for some of South Africa’s leading non-profits as a fundraiser and programme manager. She started off as a journalist and moved into the non-profit sector in the United Kingdom, working for traditional charities and social enterprise. She has worked in East and Southern Africa and is passionate about building the capacity of the nonprofit sector. You can get in touch on email@example.com.
Last week, I sat in on the investment committee of Endeavor, an organisation that works to take good ideas and make them great. They are not an incubator, instead a network of professionals and mentors who support businesses to take the next step, which means that their investment committees are fascinating as they bring together some of the country’s top business minds to assess the viability of some of our best business ideas.
This is the story of the underdog.
Wandile is 36, a fashion designer who has worked with Stoned Cherrie, and who got the idea to start a toymaking business which he calls Shwe Shwe Poppis www.shweshwepoppis.com.
He is currently sitting alone at a table, on his hands, so that he does not fidget. He is being grilled on his finances by a banker, auditor and serial entrepreneur - the investment committee. We are sitting in a horseshoe, his audience and silent observers.
He pauses, apologises again for stopping mid-sentence and explains it is because he is really, nervous. He takes a deep breath and then outlines his pricing structure.
His story is not particularly unique: he has brought together a group of women from Soweto, got them sewing and now there’s income coming into households.
The investment committee is looking sceptical and Wandile ploughs on. He hands out the dolls. They are made out of the traditional Shweshwe fabric, and each one is designed by a child involved in the African Feeding Scheme. There is a tag with the child’s name and picture, and a heart proclaiming that your Shweshwe poppi is made with love.
And clearly these poppi’s are.
Because as Wandile stutters through the hard numbers of his budget, the investment committee has melted and for a few minutes, these savvy business-folk are oblivious to his nerves, as they tweak the dolls noses, pull arms and tug hair. Just like kids.
These dolls are special: they are African, they are a child’s drawings come to life, they are made by a group trying to improve themselves and they are quite simply beautiful, creative, fun, different, with not a single Made-in-China tag. Wandile can make them affordably plus there’s the added bonus that a percentage of his profits goes into a Trust to improve the children’s education. So there’s long term vision too.
Wandile is clearing his throat (again) and making his final plea for help, as they need it and they have worked hard and are just stuck.
Everyone fell in love with Wandile and his toys. There is a strong social argument for them other than job creation. We do need indigenous toys before we all grow up believing the world is Barbie and Ken. But, did Wandile get the approval of the Investment Committee?
Wandile’s barrier was not his business, or his idea or his funding model, it was that he has NGO mentality: simply he has been in a do-good environment for too long, and now cannot see clearly. Wandile has been so busy being a designer, teacher, production manager, international seller, CEO and...that at 36, he now cannot see straight. He cannot present his business with confidence, and he cannot deliver the facts and figures that all good decisions are made on, quickly.
This is telling for me, as I think it is an easy to get caught up in nonprofit thinking -stepping out of it is what’s hard.
It takes an environment like the Endeavor investment committee to remind us that there are values other than the doing good ones. I believe that we spend so much time convincing others of the social good that we do, that we become blinkered. We believe we must undercharge. We believe that we should not market. We believe that the environment should be difficult and hard.
Wandile’s problem is not his business idea: he has done the hard part. He got it up and running. He has international clients. He has a great product.
His problem is that he needs to get out of nonprofit thinking, and see things from the other side - which is what will happen.
He did not win the Endevor mentorship, but the Investment Committee did agree to provide him with business skills and support to help show him the other side of making business work.
So, I look forward to seeing the underdog becoming top dog: where he won’t sit on his hands, where he can answer questions with confidence, and is not battered and bruised from trying to do too much, himself.
- Kerryn Krige has worked with leading charities and NGOs in the United Kingdowm and in South Africa. She is the former Director of Communications and Income Development at Child Welfare South Africa, She is passionate about building a strong civil society by improving funding through campaigning and advocacy, and building trust through good governance. You can get in touch on firstname.lastname@example.org.