At the heart of venture philanthropy is an engaged approach with the funded organisation. This often takes the form of capacity building of social purpose organisations as a main activity funders in this region engage in. Ideally what is provided by the social investor or resource provider matches what is needed on the side of the social purpose organisation. The social purpose organisations’ needs tend to come from internal parameters in the social purpose organisation, e.g. the development stage of the organisation, the management team, its social mission, business model and growth plans as well as the external environment, which shapes the entrepreneurial eco-system, economic stage of the country and the role of the government. Social investors then have different in-house capabilities to support capacity building and hence need to draw on third-party providers either paid, low- or pro-bono. This requires the venture philanthropy organisation to manage the third-party interactions.
The outcome of this relationship is then capacity building through a variety of tools such as strategic support, professional services and physical infrastructure, which aims to create real value for the social purpose organisation by helping them to achieve their social missions and value for the social investor or resource provider by increasing their impact.
The case of DBS Foundation (DBSF) is relevant as the example of a corporate foundation that, while still young, intends to supports social enterprises from seed to scale with financial and non-financial means. Noteworthy is its integration with the larger corporation and its engaged approach to venture philanthropy.
DBS Foundation
With SGD 50 million, DBSF was launched in February 2014. DBS Bank strengthens its CSR efforts through the Foundation by making an impact in addressing social needs in Singapore and across Asia. In particular, DBSF aims to spark social innovation and grow social entrepreneurship by encouraging the development of ground-breaking social initiatives and sustainable social enterprise models. This helps realise its vision of a more inclusive society for those at society’s margins.
Nurturing social enterprises – self-sustaining businesses that creatively and effectively address social needs – is DBSF’s way of addressing social challenges in rapidly-growing Asia. In developing commercially sustainable solutions, social enterprises provide jobs, goods and services to the disadvantaged and marginalised. The support for social enterprises resonates with DBS’ heritage as a ‘development bank’, while leveraging on DBS expertise in serving small and medium enterprises (SMEs). To date [June 2015], DBS has provided grants to over 80 social enterprises; including other non-financial forms of support, DBS has championed almost 200 social enterprises in the region.
Activities in Singapore and beyond
DBSF believes in cross-sector collaboration and has different programmes in countries all over Asia[i] ranging from basic training and workshops to intensive incubation, project grant support, forums for knowledge sharing and senior management mentoring. The regional objective is to support social enterprises in their growth.
In Singapore for instance, DBS funds multiple programmes which bring people and corporations together to better appreciate the challenges faced by social enterprises and to provide support for their growth. DBS partners with the National University of Singapore (NUS) for the DBS-NUS Social Venture Challenge Asia and with the Impact Hub Singapore for the DBS-Hub Bootcamp, as well as the PACT Incubator programme[ii]. Besides programmes, DBS is the only bank to offer virtually free transactional banking services, business loans at preferential rates, special grants and volunteer support from skilled staff to help social enterprises[iii].
DBS Foundation’s grant programme for social enterprises is designed to fit the various stages of the social enterprise’s development. Its 2015 grant programme identified that early stage grants can be as high as SGD50,000 (also known as “Pilot/Prototype grants”), organisation development grants for growth stage enterprises can be as high as SGD100,000 and scale-up grants for scale-ready social enterprises are customised (more details below). [iv]
Structuring the corporation and the foundation
DBSF’s support that extends beyond grant funding is usually delivered by partners that DBSF engages within and outside of the bank.[v]
To that end, DBSF heavily leverages the resources available in DBS and also sees itself as the channel through which the bank galvanises its social mission, noting that “the Foundation can be the channel through which any client, employee, business product can find a way to engage and support social enterprises. Not only does the Foundation directly support social enterprises, we can be the bridge through which DBS stakeholders engage with social enterprises too, to support and to help SEs achieve their business goals”. In particular, “the Foundation is the hub through which different DBS resources can be coordinated to support social enterprises,” including:
- working with Innovation Office to inspire innovative ideas that can keep social enterprises in the forefront of solving different problems;
- Institutional Banking Group providing banking services to 271 social enterprises in Singapore;
- reaching out to Business Class SME client community in engaging and supporting social enterprises; developing skilled volunteer support via Talent Development Programme in HR.
- Engaging with other client-facing business units in DBS Bank to involve their clients in our work with social enterprises[vi]
The DBS Foundation team includes five full-time staff in Singapore, and other bank colleagues in each of the operating markets that support the administration and outreach of the Foundation. The Head of the Foundation regularly travels to each of the operating markets and the Singapore-based regional team ensures coordination and alignment of approach in each market.
Further to the in-house staff, DBSF will leverage skilled volunteers from different functions of the bank to assist social enterprises. It can also leverage on its clients and partners network to seek their involvement as skilled volunteers to support social enterprises’ growth journey. Overall, DBSF structures the level and type of support provided to social enterprises, ranging from business engagement to skilled volunteering to grant, and is currently working on building a model to quantify the value of skilled volunteering. DBSF already assesses the business engagement value between DBS Bank and social enterprises, and also tracks the media value of additional visibility that DBS has brought to the social enterprises.[vii]
Support at different stages[viii]
DBSF’s philosophy of providing entrepreneurial support means that support is customised depending on the stage, track record and ambition of the enterprise.
DBSF programmes look at social enterprises at three stages, aiming to provide a holistic and pro-active support for enterprises in their journey to scale. While each stage indicates an organisational age as a guideline, it assess enterprises by its need rather than specifically only based on its age. Enterprises can seek support that depends on their needs. Generally, DBSF looks for a host of evidence that the social enterprise can be sustainable:
In particular, DBSF looks for the “Social Enterprise Model”, wherein the alignment of social mission and revenue model brings sustainability. Without this alignment, social enterprises may start up but ultimately not be sustainable. A second point is the Financial Plan, which looks at what kind of costs, revenues and sources as well as potential profits are listed for the enterprise.[ix]
The first stage of support is for pre-idea and start-ups, typically open to enterprises between 0-1 year old. With this, DBSF is building the space through a number of initiatives such as the social venture challenge, boot camps and workshops, as well as local forums and competitions. This functions to build awareness but also assists to bring ideas to fruition and supports the pipeline development for DBSF.[x] Moreover, in this seed stage, DBSF aims to widen the space for enterprises to try and conquer their fear to fail, encourages them to be lean and design an organisation with strong fundamentals.[xi] The Grant Programme also supports in this phase with grants up to SGD50,000 per organisation as pilot/prototype grants.
The second stage of support usually sees organisations from 2-5 years of age which are pre-revenue and pre-breakeven and in need of building infrastructure such as fixed assets, hiring manpower, product development, marketing, and research for improvement of products and services. Financial support can be up to SGD100,000 in the form of grants for the organisation. The support has the purpose of supporting them in their path to financial sustainability. Other assistance in this phase includes incubation, toolkits, case studies, models and skilled mentorships. This support aims to enhance business capability that will directly translate to furthering their social impact and lead to sustainability.[xii]
The third stage of support is for scaling up the business. This programme is often being applied for by businesses operating typically for at least 3 years. It has more tailored forms of support that may include financing and activities that help the growth plans of the business. As a pre-condition, businesses are expected to have past audited financial reports and a clear understanding and projection of tactics, milestones and resources required for the next 3-5 years.
Building capacity by proving the theory of change
Capacity building needs are assessed at different intervals during the funding period. The most common needs of social enterprises across all stages are business model development, financial planning and social capital building (e.g. networks, partners and opportunities). The milestones, tiering of the grants and fund dispersal are structured differently in each case. At each milestone, the needs are assessed again and partners delineated for the support.[xiii] DBSF takes an intense mentoring and coaching approach by simply visiting, talking and observing, leading to many interactions with the social enterprise. Due to the frequent conversations, feedback is continuous and DBSF subsequently allocates resources dynamically. Capacity building can be delivered through partner incubators or skills-based volunteering.[xiv]
Given that DBSF has been operational since 2014, impact cannot be measured yet. However DBSF’s impact philosophy is that it is not only about how much impact is created but impact-creation potential based on whether the model has been proven and the theory of change has been tested as robust.[xv] While DBSF will monitor the impact created by the social enterprise in its sphere of operations as an indication of its potential for scale, the focus on a robust theory of change that is proven is particularly relevant to the early stage social enterprises.
This aims to build the capacity of social enterprises for sustainability and fills the gap between start-up and growth.
In sum
DBSF programmes are designed to support social businesses early-stage needs and growth-stage organizational needs in order to build a pipeline of investment-ready social enterprises which deliver social missions along a proven theory of change.
DBSF is also keen on supporting the growth of the social enterprises by providing them with the holistic financial and non-financial support. For example, DBSF runs incubation programmes and provides grants to social enterprises. For scaling up impact and accelerated growth, DBSF leverages DBS’ corporate resources and financial expertise, particularly in the area of financing as well as grants/loans to fund the development of these social enterprises.[xvi]
[i] http://www.dbs.com/corporate-citizenship/championing-social-entrepreneurship/default.page
Next to Singapore, there are numerous projects in Hong Kong, India, Indonesia and China.
In Hong Kong, DBS was the first bank to provide a step-up fund to support the sustainable development of social enterprises in Hong Kong. In partnership with the Hong Kong Council of Social Service (HKCSS), the HKD 2 million DBS Social Enterprise Advancement Grant was launched in 2013, and renewed in 2014. Beneficiaries have shown great promise and progress, and the impact of the programme has been immense.
In India, DBS works with the Tata Institute of Social Sciences (TISS) for the last 3 years, helping to create successful, award-winning and sustainable social enterprises that address key social needs. These include organic farms, waste- management solutions for cities and higher education for marginalised students amongst many other. According to a presentation at the Tata Institute for Social Sciences (TISS), 1/3 of all enterprises supported by DBS in Asia are in India.
In Indonesia, DBS together with its partner, Provisi Education, works towards generating understanding of social entrepreneurship among high school students through hands-on experiences in a company’s production processes, marketing operations and simple financial management. At the end of a project cycle, students organise a school bazaar displaying the products they have manufactured.
In China, the DBS Seed Fund for Social Enterprises, in partnership with the YouChange Foundation, identifies promising social enterprises and provides them with grants to grow their businesses. This year, the programme expanded its reach, bolstered by an online campaign promoting knowledge of the social enterprise sector. DBS staff regularly serve as mentors and volunteers and work with YouChange to launch online seminars and mini-lectures, in areas such as strategic planning, human resource management and legal management – thereby strengthening the business capabilities of social enterprises.
[ii] http://socialventurechallenge.asia/ , http://www.venturesforchange.com/ and http://www.pactincubator.com/
[iii] https://www.dbs.com/corporate-citizenship/championing-social-entrepreneurship/default.page
[iv] Email conversation with Patsian Low on 29 June 2015.
[v] Conversation with Patsian Low on 20 May 2015.
[vi] DBSF Presentation delivered by Patsian Low at “GSEN: Working with partners to scale impact – building an efficient ecosystem of support in Asia” on 23 April 2015 http://2015.avpn.asia/fringe-events/gsen-event/
[vii] Email conversation with Patsian Low on 29 June 2015.
[viii] Information drawn from Deck on “DBS Foundation: Championing Social Entrepreneurship in Asia”
[ix] Patsian Low at NUS Social Entrepreneurship Symposium on 22 May 2015.
[x] Information drawn from deck on “DBS Grants Programme 2015” April 15 2015.
[xi] Patsian Low at NUS Social Entrepreneurship Symposium on 22 May 2015.
[xii] Information drawn from deck on “DBS Grants Programme 2015” April 15 2015.
[xiii] Conversation with Patsian Low on 20 May 2015.
[xiv] Conversation with Patsian Low on 20 May 2015.
[xv] Conversation with Patsian Low on 20 May 2015.
[xvi] Information drawn from deck on “DBS Grants Programme 2015” April 15 2015, slide 3.
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