Microsoft and The African Union Create Investment Tool for Africa

The UN and the African Union recently launched an investment monitoring platform to help map investment flows on the continent and provide business information to investors.

According to the UN Industrial Development Organization, the platform will” provide data and information on the characteristics of foreign and domestic investors, as well as their motivations, actions, perceptions, intentions, and impact.”

UNIDO Director-General, Kandeh K. Yumkella, is quoted saying, “The Monitoring Platform will bring a new level of transparency to the investment and business landscape in Africa. It will allow country ranking through investor evaluation and performance. It will also enable investors to conduct analysis and make more informed decisions, better assess business risks, and identify potential counterparts. ”

Google and Grameen Launch Mobile Services for the Poor

Google and the Grameen Foundation have recently launched an SMS-based service to help poor farmers and other underserved communities access information via cell-phone. The service will increase the access to information for the worlds most vulnerable.

7 Ways Social Impact is Measured

1. Cost-Effectiveness Analysis – calculates the ratio of cost to a non-monetary benefit
2. Cost-Benefit Analysis -monetizes the benefits and costs associated with an intervention and then compare them to see which one is greater
3. REDF‘s SROI -demonstrates the social, enterprise, and blended value accrued to society
4. Robin Hood’s Benefit/Cost Ratio- captures the best estimate of the collective benefit to poor individuals that Robin Hood grants create per dollar cost to Robin Hood “measured in part by the boost in income of poor individuals due to the grant”
5. Acumen Fund’s Best Available Charitable Option – ratio that quantifies a potential investment’s social output and compares it to the universe of existing charitable options
6. Hewlett’s Expected Return Equation – (Outcome or Benefit X Probability of Success)
7. Center for High Impact Philanthropy Cost per Impact- provides philanthropists an answer to the question, ―How much does change cost?

Hewlett Foundation’s Expected Return Equation

Summary of Stanford’s Social Impact Talk

• Achieving & Measuring Impact:
• The ultimate goal of a foundation is to create impact
• Impact-making something good happen that would not otherwise happen
• The ideal measurement of impact is to  clearly know what impact your organization plans to achieve and if your organization has contributed to that impact
• Be very clear of outcome you are trying to achieve
• Understand your theory of change, “what process will lead to the change you plan to achieve”
• Without taking financial risk, a huge amount of work in the nonprofit sector would never happen
• All grants will not be successful in creating change and that’s okay
• Set Measurements and Indicators with stakeholders
• 1. Speak with stakeholders
• 2. Set together deliverables
• 3. Set together indicators of success
• 4. Review progress against indicators with stakeholders
• Impact depends on operational integrity
• Standardization of measurement is key to measuring social impact

Social Impact Talk

First Five Years Fund

Barack Obama Promises Social Investment Fund

President Barack Obama said, last year, that if he was elected president he would create a Social Investment Fund Network to invest in innovative nonprofit projects and a Social Entrepreneurship Agency to give small nonprofit groups “the same kind of support that we give small businesses.”

On his website, President Obama said the Social Investment Fund Network would be set up as a government-supported nonprofit corporation, similar to the Corporation for Public Broadcasting. The corporation would receive both government and private money to distribute to charities working on innovative projects dealing with issues that have been identified by their cities as priorities—crime prevention or education, for example—and help expand successful ones to other regions.

President Obama said he wanted to “invest in ideas that can help us meet our common challenges, because more often than not the next great social innovation won’t be generated by the government.”

Video about Impact Investing

Article About the Emerging Domestic Markets

US Emerging Domestic Market (EDM) Overview

The Emerging Domestic Market (EDM) is one of the fastest-growing sectors of the US private equity investment market. “EDM” is a term used to describe the geography and demography of markets traditionally underserved by the financial services industry. These include markets serving individuals of Asian American, African American, Latino, Native American and other ethnic backgrounds as well the businesses they own and the enterprises that primarily serve their communities.

NAIC uses the term to define the asset class targeting businesses that are significantly owned by people of diverse racial and ethnic origins as well as companies that serve ethnic communities.

Shifting population demographics in the United States, combined with rising educational attainment among people of color and increased ethnic and gender diversity among the nation’s business owners, have converged to create a dynamic economic landscape. As compared with investment in emerging markets abroad, EDM investment offers the conveniences of proximity between investors and company managers; political security; no currency conversion issues; and a familiar regulatory and legal environment.

Despite these advantages and the growth of the sector, which has outpaced that of the mainstream business community, the amount of private equity capital targeting to EDM businesses has in the past been limited. Historically, EDM entrepreneurs have relied more heavily on commercial lenders than have entrepreneurs overall to fund their enterprises. Economists and entrepreneurs agree that equity funding is essential to the next stage of EDM firm development. As noted in In Your Own Backyard: Investment Opportunities In Emerging Domestic Markets, “this is because venture capital or ‘smart money’ offers entrepreneurial advantages that debt funding does not.” The study notes that the “strategic partnership and operational benefits of equity funding will allow promising entrepreneurs to stretch into the industry sectors that are ripe for growth in the economy overall.”

An increasing number of institutional investors and investment firms are now looking to explore opportunities within the EDM. What many lack, however, is a familiarity with the nuances of this particular asset class as well as professional relationships that lead to successful investments.

NAIC member firms are among the nation’s pioneers and leading experts of private equity investment in the EDM asset class. With more than $10 billion under management, the majority of which is currently provided by public pension funds, these emerging managers are demonstrating not only their professional competence, but the robust potential for significant returns that the EDM offers to investors who work with them to adopt and pursue an EDM investment strategy.