Lifting all boats with a rising tide: venture philanthropy in Asia

Date

December 16, 2016

The Asian Venture Philanthropy Network covers all of the Asia-Pacific region – nearly half the world’s population. What are the common social problems being tackled by this form of social finance?

When Pioneers Post was asked to be a media partner for the Asian Venture Philanthropy Network (AVPN) earlier this year, we thought it was a good opportunity to find out about the social challenges that were being tackled and the kind of organisations active in this region. We caught up with AVPN’s Head of Insights, Dr. Martina Mettgenberg-Lemiere to get a better sense of this vast area.

After studying anthropology in Manchester and Sussex in the UK, German born Mettgenberg-Lemiere became interested in venture philanthropy whilst helping social entrepreneurs structure their impact reports. As part of her education and subsequent roles, she spent considerable time in Asian countries. “Between impact investing and venture philanthropy, VP appeared to be the more vibrant solution to the social issues I kept seeing in India, Malaysia and Singapore,” she said.

Pioneers Post:  AVPN covers Asia Pacific, which is such a big territory. Is it possible to give an overview of the venture philanthropy landscape of the whole area?

Martina Mettgenberg-Lemiere: In this large and diverse set of countries, some similarities exist due to governance, economic income or social needs. For instance, comparisons have been drawn between South Korea and Japan due to their national income, ageing population and unemployment issues. Others see similarities between India and China.

Overall the venture philanthropy landscape is influenced by social needs, funders, government regulations and the private sector as well as the way these entities work together.

For AVPN, the biggest member countries are Singapore (where we are headquartered), India, Hong Kong, and China in that order. These countries are all very different.

In Singapore for example,  complex social needs, government regulation and millennials’ interest in purpose converge. There’s a vibrant scene of fostering social enterprises and non-profits through government and some corporate initiatives. As in many places, there is too much capital seeking too few good deals, so there’s a large start-up and incubator scene where VP is active..

Hong Kong also has complex needs and some government guidance, but the emphasis is on private solutions. The Social Innovation and Entrepreneurship Fund (SIEF) for instance aims to catalyse new models for social solutions but also tries to take a hands-off approach so as not to get in the way of high net worth individuals (HNWI) and corporates who already support NGOs and social enterprise growth.

India has always been a philanthropic and entrepreneurial hotbed. Social needs are abundant and India’s young demographic is interested in social change. Philanthropy by private individuals has always played a big role and the recently implemented CSR law aims to leverage corporate funds for social causes.

China’s landscape is much more focused on addressing its social needs through local non-profits. The China Charity Law recently launched meant that registration for non-profits became more regulated. The concept of social entrepreneurship is relatively new and beyond the urban areas is still gaining traction. The British Council in Beijing has been instrumental in supporting this development.

PP: In what way do society needs differ according to the wealth of the many countries in this region?

MM-L: It’s more of an intersection of demographic and public provisions coupled with wealth/poverty. For the wealthier yet ageing countries such as South Korea and Japan, you see different needs and solutions around ageing, ensuring the transition of youth to employment (NEETs – young people not in education, employment or training – are a big problem in both countries) and supporting women in the workforce.

Japan is a classic welfare state facing pressure from its ageing population. The recent natural disasters catalysed the social enterprises and non-profits with 50,000 currently registered already. The flow of both philanthropic and venture philanthropic capital tends to spring from corporations via foundations and then to social enterprises. The challenge for the government then lies in introducing regulation and supporting financing.

In other countries such as Cambodia and Myanmar, which are at the other end of the spectrum of wealth to Japan and Korea, there have historically been a lot of development agencies. With private social investment flowing in, some of the non-profits are now converting to social enterprises as evidenced in co-working spaces and incubators. The needs and foci of the non-profits and social enterprises are more in supporting livelihoods, poverty alleviation and building the structures of civil society and business.

PP: What are some of the most notable examples of venture philanthropy organisations in Asia?

MM-L: Social Ventures Hong Kong and RS Group in Hong Kong stand out based on their investment strategy. Japan Venture Philanthropy Fund is one of the most notable organisations in that country. Korea’s social equity investing partner Crevisse continues to do a lot in building a model for social investing that is between incubation, partnership and venture philanthropy. I

In Singapore, the players are more mixed and often inspired by the state. raiSE is a government agency and has made more than 50 investments after a recent grant call. India’s models are diverse, but one is dasra, which has grown from a giving circles organisation to policy influencing social impact connector. In Cambodia and India, the Kamonohashi project stands out in tackling sexual trafficking.

PP: Would you say you have seen an increase in interest in venture philanthropy or social investing? Over how long a period?

MM-L: Interest in venture philanthropy is growing in Asia. Our membership numbers are the strongest indicator. We have grown from 105 members in 2012 to 290 in 2016, so at a rate of 28% over four years. Separately, interest around VP practices has notably increased, as evidenced by many social incubators/accelerators coming into existence over the past three to four years, and increased interest from corporations in skills-based volunteerism.

Philanthropists want to be more involved beyond writing a cheque. Also at times philanthropists are already doing capacity building and/or asking for indications of impact – which resembles venture philanthropy practices. So now these practices are being seen explicitly as venture philanthropy and as such enter people’s imagination.

Beyond specific funding trends and in the face of the abundant social needs which current business models are not fully able to address, we are seeing a collective sentiment for individuals and companies wanting to do well by doing good.  This applies particularly to the next generation who are increasingly looking to leverage their careers to create social value as well as financial value.

PP: Why do you think there is increased interest in venture philanthropy?

MM-L: Globally, there’s a disenchantment with existing models of growth and in Asia, there is a push for ‘inclusive growth’ as a way to finally lift all boats with the rising tide.  This is particularly important for the next generation who may have seen their parents struggle and moreover want to do good while doing well during their entire life and not just at the end.

AVPN’s work is about promoting venture philanthropy (VP) practices to both increase the resources flowing to the social sector and ensure those resources are deployed most effectively. The approach stresses the combined use of financial and non-financial resources to deliver greater social impact. To pull this off effectively requires a thoughtful methodology, which we’ve conceptualized into the Capability Development Model (CDM). The CDM outlines the five practices critical to VP, namely pre-engagement processes, capacity building, impact assessment, portfolio management and multi-sector collaboration.


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