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Why and How to Invest in Capacity Building? Learn About the Asian Funders Leading the Way

08 October 2015

By

Kang Fei Wong

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By Martina Mettgenberg-Lemiere , PhD – Assistant Director, AVPN Knowledge Centre

A hallmark of the venture philanthropy methodology is the engaged approach of funders with social purpose organisations (SPOs) or NGOs they fund. Which funders in Asia and just how and why do these funders engage in building capacity? And how do they measure the outcome of the capacity building? These broad questions led us to talk with and write about AVPN members from India, China, Korea, Japan, Hong Kong and Singapore who are leading the way in capacity building and compare this with existing literature. All case studies can be viewed here.

The engaged approach is often expressed through a board seat (John, 2007) or the number of services, apparently 9.2 per organisation, provided by the funder (Isserman for Inspiring Scotland) . Yet, conversations between the organisation and the board often are tense when it comes to overheads and infrastructure building (Goggins Gregory and Howard, 2009; Shoemaker, 2015) . From the overviews we gained in Asia, examples to highlight are the Japan Venture Philanthropy Fund and Crevisse , who – although being a grant maker with a venture philanthropy approach and equity social investor respectively – have both formal and informal relationships with their members, which are based on a high level of trust and support even during times of ‘failure’.

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The kind of support SPOs/NGOs receive is often fundamental operational assistance services. This can be delivered through volunteers or courses in social entrepreneurship and mentorship as exemplified by such as British Council, China and ETIC . Yet, depending on needs and stage of enterprise development and as the volunteering intermediaries Empact in Singapore and Toolbox Foundation in India exemplify, more individual advisory for strategy, marketing and revenue/fundraising processes are becoming more prevalent. The decision about what is provided appears to be beyond the one-size-fits-all but tends to be customised and made in consultation with the SPOs’ needs.

Delivery models vary across our sample of organisations: Very few, like Social Ventures Hong Kong and Crevisse provide most of their high-touch engagement with their investees mostly through in-house staff. The Korean equity investor Crevisse also pre-negotiates rates for add-on services for its investees before connecting its investees to service providers. Others such as Japan Venture Philanthropy Fund or DBS Foundation provide capacity building by managing the SPO-pro bono services relationship in-house, but negotiate with service providers or tap into corporate volunteers respectively. Intermediaries like Empact and Toolbox Foundation manage the SPO-pro-bono services relationship for funders and offer a host of other services to increase efficiencies as needed.

The reasons funders engage in capacity building vary. Beyond good will, actions can depend on whether the funder expects a financial return or provides a grant, effectively not expecting a financial return. In our sample we found that even grant makers like Japan Venture Philanthropy Fund and DBS Foundation despite not receiving a financial return, engage in capacity building because they see themselves as part of a larger eco-system that develops a pipeline. Others have skin in the game be it by equity, see Social Ventures Hong Kong and Crevisse , or an interest in growing the sector, ETIC and British Council, China . Often it is a mixture of motivations however.

These services create value by building more effective SPOs/NGOs, more aware capacity-builders – be it pro-bono volunteers, in-house project managers or low-bono service providers – and an overall pipeline of SPOs/NGOs. Next to the organisations mentioned above, the UK grantmaker Impetus-PEF is an example for this. Conscious of getting its investees not only investment- but also impact-ready , Impetus-PEF moves beyond the starvation cycle by providing increasing funding for capacity building depending the stage of enterprise development.

We’ll continue to explore this area and the other 4 areas of the CDM. If you want to find out more about the AVPN Knowledge Centre and activities, we invite you to:
• Look out for our Capacity Building workshops in India and Taiwan in November and December
• Explore the 5 practices of venture philanthropy through the Capability Development Model
• Contribute to the Knowledge Centre by reaching out to info@avpn.asia
• Browse the rapidly growing AVPN community and what our members have invested in
• Find and connect with like-minded AVPN community members
• Or join us at an upcoming AVPN event

A big thank you for openly sharing practices to Julia Grant from Impetus, Wonyoung Kim from Crevisse, Nanako Kudo from JVPF, Patsian Low from DBS Foundation, Francis Ngai and Karen Ng from SVhk, Vijaya Balaji from Toolbox India, Peter Yang from Empact and Mavis Meng from British Council China as well as our summer interns Raman Sidhu, Bethany Tang, Jing Zhang, Alex Wong and Mila Devenport.

References

A. Environmental Stewardship
To protect the environment, we organize programmes like mangrove nursery and Reforestation, Coastal and River Clean-Up, Community Based Environmental Solid Waste Management, Environmental IEC Campaign and Eco-Academy

B. Food Security and Sustainable Livelihood
To ensure a sustainable livelihood for the community, eco-tourism include Buhatan River Cruise Visitor Center Buhatan River Mangrove Boardwalk are run by the community. Others include Organic Vegetable and Root crops Farming, Vegetable and Root crops Chips and by-products Processing and establishing a Zero waste store.

C. Empowered Communities
To empower the community, we provide product and Agri-Enterprise Development Training, Immersion and Learnings Exchange Program, Earth Warrior Training and Community Based Social Entrepreneurship Training

Author

Kang Fei Wong

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