Member Spotlight: Shell Foundation in Asia

Date

September 8, 2012

The idea for Shell Foundation originated with acknowledgement at the Shell Group that any company that wanted to stay in business and grow, had to find ways to incorporate sustainable development principles into its business practices. In 1997, the company decided to launch an independent global Foundation separate from its ongoing business social investment effort which would work with external partners in an attempt to further sustainable development. That led, in the year 2000, to the establishment of the Shell Foundation, an independent charity operating with a global mandate.Each year, the foundation commits about US$16 million, but leverages several times this amount from strategic partners and investors.The Shell Foundation is a firm believer in an enterprise-based approach to tackling underdevelopment. “Given the scale of development challenges, there is never going to be enough money to give away in this part of the world,” says Anuradha Bhavnani, who leads Shell Foundation’s activities in India, the foundation’s main market in Asia.According to Anuradha, an enterprise-based approach is extremely important. First, it allows any organisation to look at an issue with a long-term perspective and not with a one-time, short-term approach as it allows for sustainability of a venture. Second, the idea is to “try and look at the end consumer as a consumer and not a beneficiary”, she says, adding that it is important to give people a service or product that they need as opposed to anything that someone else thinks is good for them. She equates it to a market-based approach.The Shell Foundation is very focused on developing business models that can be replicated. “One single partner cannot address a particular issue across the region. Hence, developing a business model that can be replicated is critical and lies at the heart of the enterprise-based model,” she says.Source: Shell Foundation in India reportThe foundation does not have a different approach to venture philanthropy in Asia as compared to other regions per se. “We have one philosophy and one way of thinking,” says Anuradha, but is quick to point out that this vision does not overlook the need to look at cultural and local context and needs. For instance, while the approach may still be enterprise-based, a specific product that works in South Asia may not work in Latin America. The model remains the same, says Anuradha, but one needs to tweak it to deliver to local needs. One needs to know how best to tap local distribution channels, how to use existing infrastructure, and existing networks and partnerships across existing geographies.In Asia, the foundation has been focused on India. Given the dynamism, the social diversity and the complexities of the economic challenges, “we have focused on India and our partners in India as a learning ground to create business models for replication elsewhere”. India has offered Shell Foundation a multitude of partners including the likes of Envirofit India, Husk Power Systems, Agrocel, CottonConnect, and EMBARQ India.Partner selection is a critical aspect of the foundation’s activities. Anuradha says the Shell Foundation does not send out requests for proposals, but it goes out and hunts for partners based on the issues it wants to address through its own networks and connections. “We will do a full due diligence process similar to what an investor would do. In terms of the partners, they should be passionate about the work they are doing; should ideally have a structured management team with sufficient people; and should be aligned in terms of our thinking.”Source: Shell Foundation in India reportFinally, the partner should have the ambition to look at scale, says Anuradha. Scale is essential purely because of the sheer magnitude of the development challenges confronting the region. Scale can also be instrumental in bringing about sustainability of the enterprise. Scale for us is cost efficient solutions impacting large numbers in many locations in a way that is sustainable and finally gets to financial viability. Envirofit the improved cookstoves partner has succeed in creating a growing and sustained market for clean cook stoves impacting more than 1.5 million lives alreadyThe foundation’s current success notwithstanding, about 80 percent of the initiatives it supported in its first couple of years failed to achieve scale and sustainability. Anuradha says that while the foundation had multiple partners in those years, it was a classic request-for-proposal methodology that was based on short-term projects and focused on nonprofit organisations. “That thinking has changed to look at more strategic partnerships with organisations which were long-term and more entrepreneur-driven in terms of social entrepreneurship,” she says. “We have put in time, patience and investment there, and through this we have created pioneers.”For an organisation that is just over a decade old, the Shell Foundation has come a long way. It has learnt lessons along the way and it has had the fortitude and the vision to acknowledge that it required a change in approach to meet its objectives and in order to leave a lasting impact on communities it is engaged with. That is something the foundation has done successfully. In a region where so much remains to be done, hopefully the Shell Foundation’s success can be viewed as a blueprint for other venture philanthropy organisations in Asia.Check out Shell Foundation’s report on India in AVPN’s resources section.


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