Why providing non-financial support to social organisations is key for Asian market

Venture philanthropy organisations (VPO’s) and social purpose organisations (SPO’s) are recognising the value of more engaged approaches in producing better social outcomes. EVPA released a report in December 2015 titled “A Practical Guide To Adding Value Through Non-Financial Support”. The results are derived from several months of research by 24 experts and provide recommendations of the best ways of engaging investees and grantees with non-financial support in order to accelerate their progress towards producing effective social outcomes.

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To get more insight on some examples of non-financial support in Asian projects, we interviewed Dr. Martina Mettgenberg Lemiere, Assistant Director of our Knowledge Centre and a member of the expert group for the report.

 

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What are the current trends for non-financial support to social organisations from funders in Asia?

MML: “The needs for capacity building are very mixed depending on the stage of the eco-system in each country in Asia. Overall though we often see a lot of good-will where funders are available with mentorship and advice even at odd hours. Yet there is little design, support delivery and strategic follow-through for building strong organisations. The goodwill could be more effective if funders would spend more time on strategizing their delivery and funders are starting to embark on this journey.”

 

From your experience, what do the SPOs ask for support with the most? Is there one area of non-financial support that is more popular than the others?

MML: “Fundamentally, SPOs juggle achieving a social mission with the business requirements of any business or a sustainable non-profit. To support this dual mission, most non-financial support in Asia aims to help with basic management skills such as accounting, finance and HR. Then, depending on the sector, stage of and ambition for development, SPOs may need more customised advice on how they can grow either their revenue model or grant funding and achieve a wider or deeper social mission. This is very similar to Europe.”

What would you say are the barriers that SPOs face in accessing non-financial support in Asia?

MML: “The main obstacle is the lack of the services at a price point that works for the SPO. We also found that often SPOs do not want to admit their weaknesses and hence do not get help from funders for fear of losing face (and potentially funding).”

What have you seen being done to overcome these barriers?

MML: “We see funders slowly moving from good will and ad-hoc availability to a more systematic implementation of non-financial support. This also includes hiring the right portfolio managers to assess SPOs, building the right networks to deliver support and setting money and time aside to make this happen. A remaining challenge is the assessment of non-financial support to rejig the entire system depending on outcomes and eventual impact. “

From the Capacity building workshops that AVPN carried out in India last year, one of the recurring points was that measuring the value of such services is difficult.
Why do you think this is the case? What approaches do you think work better?

MML: “One of the difficulties in measuring the value of non-financial support is the design of measuring value. This is similar to impact measurement. Three things are important to get right. One is that there are many different values created in the organisation, the beneficiaries and overall the social impact. Note that you also should consider if the value you create is actually social impact or something different. You need clarity on where the value comes from. Second, value creation often takes time, while outputs are easier to see. So be aware of the horizon of measurement and what is realistic. Thirdly, output, outcome, impact or eventual value looks different across different projects. So you not only need different indicators and measures but also need to think about comparability or aggregation (if that is what you need and want).
One basic approach is to do a baseline measurement before the intervention and then a post-intervention measurement and a follow-up after a few months and roughly helps gauge relevance and value.”

Which elements of non-financial support are more important for the VPO? Should they prioritise?

MML: “There are different approaches to prioritisation depending on the VPOs’ resources. One way is to take a SPO-centric approach by doing a holistic audit to understand which area of the organisation is in the worst shape and then decide what can be done about this in order to foster impact and growth. Another is to think about what skills, networks and resources you can offer beyond the funding and be transparent about these in the due diligence stage, so that the SPO can gauge is that meets their needs. How to hone in on the most critical skills largely depends on the sector, the business model and the stage of growth and requires judgement and responsibility on the side of the VPO”

The EVPA report is available for download on our website.