At the heart of venture philanthropy is an engaged approach with the funded organisation. 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 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.
In recent years, more corporations are looking beyond monetary donations to give back to society. Individuals are also looking for alternative ways to contribute.[i] In particular, pro bono services have gained popularity because corporations and social organizations are beginning to realise the benefits of engaging in skills-based volunteering (SBV). According to a Landscape Study on the State of Skills-Based Volunteerism in Singapore,[ii] which was supported by UBS and Ministry of Social & Family Development (MSF), the key motivational factors for corporations to engage in SBV include opportunities for staff development (72%), better employee engagement (64%), ensuring the success of community investment partners (33%) and maintaining a positive public image (28%). On the other hand, social organizations that lack money, resources and talent often engage in SBV to receive access to high quality services that they would otherwise not be able to afford (65%), meet current critical organizational skill needs (60%), and build capacity for the company in the long term (46%). Thus, while the popularity of SBV continues to grow, it should be noted that the priorities of these two parties do not necessarily align.
Portrait of Empact
This is where intermediaries such as Empact can play a role in channelling the good intentions and skills of corporates and individuals to increase the capacity of various social enterprises and nonprofit organizations (collectively known as social organizations).
Empact is a Singapore-based social enterprise founded in November 2011[iii] by Peter Yang. It is currently a small company consisting of eleven staff. It provides a range of intermediary and consulting services to social purpose organizations (SPOs, including nonprofit organizations and social enterprises) through pro-bono volunteers and offers advisory services to grant-makers and corporations. However, its mission is first and foremost to assist SPOs in their pursuits of creating social change.
To date, Empact has registered 300 individual volunteers, 150 of whom are currently active. They are given the opportunity for self-development whilst contributing their skills and time to make a positive and sustainable impact on the community. As a result, approximately 60 social organizations have benefitted from the support.[iv]
Stakeholders
Together with its stakeholders, Empact works towards creating a world where individuals are self-actualized and act as active citizens. Empact empowers individuals who wish to contribute by providing a platform for them to channel their skills to SPOs.
Social organizations that champion various social causes benefit from the assistance of these volunteers to fulfil their critical backend operational needs such as accounting, marketing and management review of operations. This support allows the SPO to focus on pursuing their social mission and building their capacity to serve more needy people in the community.
In addition, Empact engages corporations that are looking for opportunities to contribute to society through sustainable processes that involve their staff.
Other stakeholders of Empact include grant-makers such as social venture capitalists, who provide the necessary funding support to SPOs. Empact provides the necessary groundwork to assist these grant makers in comparing causes, measuring social impact and evaluating the soundness of ideas and organizations.[v]
Mapping Capacity building in an intermediary context
Empact acts as the intermediary that brings together capital providers and SPOs. It attempts to understand the objectives of the corporates and the real needs of the social organizations in order to effectively match the volunteers’ skill sets.[vi] As Empact founder Peter Yang comments, “We are the lynchpin between many stakeholders”.[vii] Typically, Empact serves SPOs, corporates and governments.
1/ Assessing the needs of the client
Starting with SPOs, Empact has the following process:
- In general, the engagement begins when SPOs approach Empact expressing need for professional services that are critical to daily operations. These are referred to as shared services (including bookkeeping and accounting services, payroll & HR support, donation tracking, etc.).
- Empact assesses the needs of the SPO by sending its own staff, at times accompanied by the volunteers themselves, to the social organization. Together, the staff and volunteers work out the process to deliver the solutions to the SPO. Throughout the process, the staff ensures accountability to the SPO.
- This helps Empact and its volunteers build their relationship with the SPO, so that when the SPO requires additional services, Empact can go back to their team and see how they can provide these added services, e.g. offering a CFO type role. In this instance, Empact considers the needs of the SPO and then staffs its volunteers or own employees accordingly.
Empact also engages corporates and governments in designing volunteering programs that place volunteers in SPOs. This is the reverse process and can take two similar shapes, depending on the stakeholders:
Corporations
- In this collaborative approach, corporates or government bodies approach Empact to design a program for professionals to volunteer their skills with SPOs. In this case, Empact acts as a consultant to design and implement the program allowing employees to put their skills towards contributing to SPOs whilst concurrently developing their participation in local communities as active and engaged citizens.
- For example, Empact worked with Procter and Gamble (P&G) to create a staff volunteering program. Based on the stipulated community interests of the company, Empact designed and tailored the program according to P&G’s needs and scouted for social organizations that were requiring such assistance.
Third-parties
- Empact was also commissioned by the Ministry of Social & Family Development (MSF) to conceptualise, design and implement the Pilot Social Enterprise Mentoring Program, a platform for C-Suite professionals from various companies to mentor identified social entrepreneurs who were on the brink of bringing their enterprise to full realization.
The full list of services offerings are listed in below:[viii]
| SPO’s baseline services/shared services | Government and Grant providers/donors |
|
|
| SPO’s advisory services | Corporations |
|
|
2/ Recruiting volunteers[ix]
Empact seeks to provide opportunities to as many individuals as possible by customising the Volunteer Development Program to fit volunteers’ needs and interests. This will allow working professionals, retirees and students the opportunity to allocate time to champion their social causes. However, there is a minimum commitment of 4 hours a month; and at least for a period of 6 months. For corporates interested in developing a volunteering program, Empact is able to tailor the Program to their needs and structure the engagement accordingly.
The recruitment process differs depending on the background of the volunteers.
Empact generally reaches out to students through partnerships with universities and student associations. For example, Empact engage students of the Accounting Association at the Singapore Institute of Management (SIM) to participate in the Volunteer Development Program. The student organization will identify interested students and Empact is responsible for the training program.
On the other hand, Empact participates in recruitment and selection directly for professional volunteers from corporations and professional bodies.
Volunteers are categorized as follows according to their experience and expertise, which influences how they contribute:
- Do-ers (basic, hands-on work that is generally completed by student or young professionals volunteers)
- Reviewers (generally volunteers who guide the do-ers in completing tasks, typically more experienced professionals)
- Subject matter experts (generally offers advice as part of the consultancy work or as trainers)
- Mentors (mentors founders and leaders of social enterprises through specialised programmes)
3/ Training volunteers[x]
Empact provides training to the volunteers once they have started and experienced some of the needs and gaps. Training usually works best on middle and junior staff levels. However, since it is assumed that the volunteers are competent in their respective fields and at their level of involvement, the training is largely focused on helping volunteers understand the social sector and contextualise their specialisation to the sector (e.g. gaining an understanding of the charity accounting standards).
On-the-job training is also provided within each volunteering teams, with the Empact staff and Reviewers leading and guiding the Do-ers. Previous batches of volunteer groups are also brought in to share their understandings on how best to manage projects involving social organizations, successes and challenges and personal experiences.
Most of these volunteers are not consultants, but when they volunteer with Empact, they need to act as consultants. Empact plays an important role in helping them change their mind-sets and recognize the differences between corporate and social organizations. Two examples of differences:
- Solutions in corporate environments may not always work for social organizations.
- When P&G volunteers asked the marketing team of an SPO for a budget, the team said $0. In the marketing experience of the volunteers, the budget determines the strategy.
- In SPOs, there’s frequently no budget, yet there remains a need to act creatively to augment the lack of funding. This is the mindset and working approach change that volunteers experience.
- Relationship between volunteers and SPOs are not based on Key Performance Indicators (KPIs).
- Instead, volunteers need to influence and collaborate with each other to work in SPOs.
Sustaining the social enterprise
Initially, Empact was bootstrapped with Peter Yang’s own funds to cover its initial operating expenses. Since then Empact has supported itself through a mix of revenue streams.
By mobilizing individual and corporate staff volunteers who are willing to offer their professional skills to help others, Empact is able to provide SPOs support in areas such as accounting, marketing, advisory services and fund-raising at affordable, discounted rates. Such discounted rates are based on Empact’s operating costs with a slight mark-up and are between 50% and 100% lower than the market rates. Fees received from organizations that use Empact’s services also help to take care of its business costs.
However, the fees received through these avenues are not sufficient to sustain the enterprise. Empact additionally receives grants from the National Volunteer and Philanthropy Centre (in 2012) and the National Youth Council (with disbursement of its National Youth Fund over 1.5 years from October 2013).
Empact also generates its own funds by working with corporates and third parties interested in creating a structured volunteering program. If a company pays Empact to engage its staff as volunteers, the beneficiary organization does not pay for Empact’s service.[xi] Finally, Empact also earns income by providing advisory services. Each of these revenue streams (organization fees, grants and consulting/advisory fees) generate approximately 1/3 of the total income.
The company also recently received a fresh injection of funds by a private investor who now has a minority stake in the company.[xii]
Overcome hurdles
Empact’s strengths lies in volunteer management, as it has developed ways to ensure that volunteers deliver quality service to SPOs. One of the challenges Empact has found in regards to volunteer management is keeping all its volunteers active. Currently, although Empact has registered 300 individual volunteers, only 150 are active.
Also, Empact realised that it is necessary to manage the expectations of volunteers. There needs to be an understanding with the volunteers that apart from availability/ scheduling, the skills that they offer may not be in demand by the social organisations. Furthermore, because Empact must play the role of an intermediary between the social organizations and corporations, Peter Yang acknowledges that there may be inefficiencies in communication between the three levels from SPO to Empact to volunteer. Empact is mindful of this and actively works on improving the process to ensure that important information is not lost along the way. The mutual selection of availability and required skills ensures a continuous focus on maintaining quality.
Continuous challenges
Empact’s challenges however lie in strategy, talent, impact assessment and finally growth capital.
What’s your endgame?[xiii]
Looking towards the future, Peter Yang[xiv] believes that Empact must consider its “endgame”– the role that the social enterprise intends to play in the overall solution to social problems, once it has proven the effectiveness of its core model or intervention. Through many years of experience, Empact has learned the best practices in the field – thus, Peter Yang envisions that Empact may eventually move towards adopting an “open source model” that serves as a knowledge hub for research relating to skill-based volunteerism. Alternatively, government may adopt the role of such a knowledge hub. Neither of these options are necessarily attractive to investors, which then increases Empact’s fourth challenge in finding growth capital. Ideally, Empact’s vision is to move to “sustained service”.
Attracting talent to the sector
It is difficult to attract fresh talent to join the company (and the sector in general) because Empact is competing with large corporations, banks and other firms for graduating university students. The values of Empact may not necessarily resonate with these students, and the company is unable to compensate skilled personnel unless they are willing to take pay cuts. Another challenge is to rally senior management to become involved as mentors for Empact. Through this, Peter hopes that more C-level executives can come forward to offer their invaluable expertise and experience.
Measuring impact versus measuring Empact’s value creation
From a return on investment perspective, a dollar of investment in Empact brings four dollars’ worth of volunteer services.[xv] Yet, that does not necessarily indicate where Empact’s value creation lies. Hence, in order to measure the perceived value creation for volunteers, Empact volunteers fill out a motivational survey before and after the volunteering experience. Yet, since the value of services such as bookkeeping and mentoring can be hard to evaluate, each program requires a separate evaluation method and has different outcome measures. Empact is still exploring different ways to measure its value and impact in a more holistic and standardized way to allow for comparisons.
Growth capital
In the future, Peter expects to see increasing demand for Empact’s services, as capacity-building will become more important with the expected rise in the number of social enterprises. In this sense, then, part of Empact’s core mission has been achieved[xvi]. The company has plans to scale up operations by improving its productivity through the standardization of processes and provision of common tools and training. To serve more beneficiary organizations, more manpower and funding will be needed. Thus, one of the challenges for Empact is the requirement of growth capital to pilot new revenue streams and improve the business model. Peter is seeking capital providers who provide holistic solutions of loans, grants, equity, etc.
Outcome and looking into the future
When Peter Yang founded Empact in 2011, skill-based volunteering was still a novel concept. In recent years, the idea has gained popularity with corporates and many companies now incorporate skill-based volunteerism into their CSR programs. As Peter Yang looks into the future, he envisions Empact acting as a knowledge centre, providing its expertise to companies. [xvii]Ultimately, the key value that Empact brings is awareness of the social organizations of their needs and how individuals and corporations can offer their professional skills to address those needs.
[i] http://beantherecountthat.sg/articles/making-empact/ (Accessed 29 May 2015)
[ii] http://empact.sg/redefiningcommunitygiving (2014)
[iii] Conversation with Peter Yang on 15 June 2015
[iv] Conversation with Peter Yang on 15 June 2015
[v] http://www.empact.sg/ourstakeholders.php
[vi] Asian Venture Philanthropy Network Conference 2014 (Session Report – Human Capital Intermediaries)
[vii] Conversation with Peter Yang on 16 June 2015.
[viii] http://empact.sg/social-organisations.php (Accessed 16 June 2015)
[ix] Conversation with Peter Yang on 15 June 2015
[x] Conversation with Peter Yang on 15 June 2015
[xi] Joachim Sim, 2015, Giving A Helping Hand – Celebrating Singapore Social Enterprises (Page 100), Singapore, Really Good Books Publishing House Pte Ltd
[xii] Joachim Sim, 2015, Giving A Helping Hand – Celebrating Singapore Social Enterprises (Page 104), Singapore, Really Good Books Publishing House Pte Ltd
[xiii] Alice Gugelev and Andrew Stern: what is your end game?, Stanford Social Innovation Review, Winter 2015 available on http://www.ssireview.org/articles/entry/whats_your_endgame, accessed on 30 June 2015
[xiv] Conversation with Peter Yang on 15 June 2015
[xv] Conversation with Peter Yang on 15 June 2015
[xvi] Alice Gugelev and Andrew Stern: what is your end game?, Stanford Social Innovation Review, Winter 2015 available on http://www.ssireview.org/articles/entry/whats_your_endgame, accessed on 30 June 2015
[xvii] Conversation with Peter Yang on 15 June 2015
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