Blog | SOCAP - Part 11

Unitus Seed Fund: Attracting Elusive HNWIs to Impact Opportunities in India

Posted by David Bank on September 2nd, 2014

ImpactAlpha.com — Just when many fund managers are throwing up their hands in frustration at the reluctance of affluent individuals to write checks comes a sign that it may indeed be possible to get rich folks to actually commit to impact investing.

Unitus Seed Fund, based in Seattle, announced it has closed its $20 million fund for “base of the pyramid” startups in India, raising an additional $7 million in commitments from a range of “high-net-worth individuals,” or HNWIs, in the U.S. and India.

“It took some time to get people comfortable that they would see both a financial and a social return, particularly looking at very early stage businesses that are inherently high-risk,” said Will Poole, co-founder and managing partner of Unitus Seed Fund.

A raft of surveys have suggested that HNW and ultra-HNW individuals would be early adopters of impact investing practices because they are able to commit on their own without cumbersome committees or concerns about fiduciary responsibility over other people’s money. But many impact fund managers report that fundraising from such individuals has been time-intensive and often fruitless, with long courtships resulting in small checks or nothing at all.

Unitus cracked the nut. Many of the fund’s limited partners are first-time impact investors, including Diego Piacentini, a top executive at Amazon.com, and Microsoft executives Soma Somasegar, Bharat Shah, Anoop Gupta and Nagesh Pabbisetty. Poole is himself a former Microsoft executive; his partner at Unitus, Dave Richards, is a former executive of Real Networks, another Seattle tech company.

“I have been looking for investment opportunities that align my entrepreneurial and business passion with driving sustainable and scaled social change,” said Steve Singh, CEO of Concur Technologies Inc. in Bellevue, Washington. “Via Unitus and other impact investments, I expect to receive a competitive rate of financial return and to see millions of lives improved over the coming years.”

Indian American entrepreneurs Gururaj “Desh” Deshpande, a founder of Sycamore Networks, and Romesh Wadhwani, the founder of Aspect Development Inc., who both invested through their philanthropic foundations, are also first-time impact investors. More well-known impact investors also participated in the round, including the Lemelson Foundation, the Sorenson Impact Foundation and the Michael & Susan Dell Foundation.

Significantly, most of the fund’s limited partners agreed to let their names be disclosed publicly, as examples for other would-be investors.

Unitus has been the most active seed-stage impact investor in India over the past year, according to a report from Unitus Capital (the two entitites have common roots but no formal affiliation). In the next 18 months, it plans to double its portfolio of investments to 26 companies, in healthcare, education, agriculture, livelihoods, technology and basic necessities. The fund’s typical investment size is $250,000.

While Unitus’ U.S. fund is closed, Indian nationals and non-resident Indians have a few more months to get into Unitus’ affiliated rupee-denominated seed fund.

“If you are of Indian origin and of some wealth, you are contantly approached for donations,” Poole said. “We offer a new way for those people of Indian origin to make a difference in their country — and to make some money.”

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A Global Health Revolution: Expanding Access to Basic Care

Posted by admin on August 22nd, 2014

A Global Health Revolution: Expanding Access to Basic Care, Pt. 1–
The need for essential surgery to ensure healthy and vibrant communities worldwide

By: Myra Donnelley; @EniwareMyra
Company: Eniware; @Eniware

“Surgery is the neglected stepchild of global health.” ¹
- Paul Farmer, Chairman of the Harvard Medical School Department of Global Health and Social Medicine and co-founder of Partners in Health

What is “essential surgery”?

Essential surgery refers to simple procedures that produce a big “bang for the buck” in regards to the death and disability that can be avoided without a large drain on limited resources. Generally, four basic types of surgeries are considered “essential”: 4

(a) injury care for lacerations/cuts, burns and broken bones to save lives and prevent disability

(b) emergency childbirth care including C-sections and repair of birth-related injuries to preserve maternal health and reduce maternal/neonatal mortality

(d) procedures to correct or prevent disability including repair of birth defects such as cleft palate and clubfoot, removal of tumors and growths, and simple eye and ear surgeries to prevent blindness and deafness²

Surgery as a global public health “solution”

Access to basic surgical care is a human right and an economic necessity. Somewhere between 11 and 25% of the global burden of disease– more than twice the burden of HIV/Aids, Malaria and TB combined – is addressable by these simple, essential procedures. Likewise, “estimates of the disease burden addressable by vaccination are coincidentally similar to current estimates for surgery.”⁴ But while billions of dollars have been spent and laudable gains have been made in the field of global disease prevention through vaccination efforts, global support for surgical treatment of injury and disease has lagged far behind. Now, largely because of successful public health interventions, the global burden of infectious disease is shrinking and the burden of non-communicable disease (NCD) is growing. With surgical conditions comprising a significant proportion of NCDs and the global burden of NCDs growing year by year, access to basic surgical care is now more urgently “essential” than ever.

Access to essential surgery is Extremely Far Behind

In the 2008 Lancet article, “An Estimation of the Global Volume of Surgery”, the authors estimated that 234 million surgeries were performed annually. Of these 73.6% (more than 172 million procedures) were performed for the benefit of the richest third of the world’s population. Only 3.5% were estimated to benefit the poorest third of the world’s people. ³

But isn’t surgery expensive?

Recent studies have helped explode the widely-held, but mistaken belief that surgery is too expensive to be an effective global health strategy. A 2014 review of 26 studies measuring cost-effectiveness for seven categories of basic surgical interventions found that, “nearly all studies showed the same result: surgical interventions are cost-effective or very cost-effective.” For example, the cost-effectiveness of surgical circumcision (for HIV prevention) was similar to that of standard vaccinations and of bed-nets for malaria prevention, both widely regarded as low-cost, high return interventions. Likewise, the C-sections were found to be more cost-effective than multi-drug anti-retroviral treatment of HIV, a similarly well-regarded, public health intervention seen as money well-spent. The article concludes that “data from these studies lend support to the conclusion that a subset of surgical interventions compares very favourably (sic) to accepted health interventions in low-income and middle-income settings.”⁶

How can we make essential surgery more widely available?

Thank you for asking. We will answer that question in Part 2 of our blog under the SOCAP community discussion “Healthcare Innovators”: see “Eniware’s portable, power-free sterilization for medical instruments and other disruptive healthcare solutions igniting healthy and vibrant communities worldwide”

https://www.youtube.com/watch?v=P7P6ecl9N7c

1.http://news.harvard.edu/gazette/story/2010/11/where-surgery-is-lacking/
2.http://www.ncbi.nlm.nih.gov/books/NBK11719/ Debas, Haile T. , Richard Gosselin, Colin McCord, and Amardeep Thindin, “Chapter 67 – Surgery”, Disease Control Priorities in Developing Countries. 2nd edition, Jamison DT, Breman JG, Measham AR, et al., editors. Washington (DC): World Bank; 2006.
3.http://www.thelancet.com/journals/lancet/article/PIIS0140673608608788/abstract Although published in 2008, global surgery figures are for 2004. In 2013, The Centers for Disease Control reported that 51.4 million inpatient surgeries were performed in the US alone. http://www.cdc.gov/nchs/fastats/inpatient-surgery.htm This does not include outpatient, or ambulatory, surgeries; in 2006, the most recent statistical year available, there were reported to be 24.7 million of these outpatient procedures in the US. http://www.cdc.gov/media/pressrel/2009/r090128.htm
4.http://www.who.int/bulletin/volumes/86/8/07-050435/en/ Other experts estimate the global burden of disease treatable by surgery to be as high as 25%, making surgical conditions more than twice as economically and medically impactful globally as HIV/Aids, Malaria and TB combined. (see citation #6)
5.http://www.givewell.org/international/charities/vaccination-organizations
6.http://www.globalsurgery.info/wp-content/uploads/2014/01/Cost-Effectiveness.pdf

Posted in Editorials, Social Capital Spotlight, Uncategorized | No Comments

Multilingual Leadership: Cracking the Code

Posted by admin on August 22nd, 2014

By Cathy Clark, Jed Emerson and Ben Thornley

Last year at SOCAP, we had the privilege of sharing the high-level findings from our Impact Investing 2.0 research project, which included a dozen case studies of outstanding funds and the core elements that enabled them to succeed.

Those elements included the critical role of “Catalytic Capital” (i.e., investors who use their capital to spur others to action), the relatively consistent approach of funds to developing a strong “investment thesis of change” as a top priority before focusing on financial discipline in deployment and tracking impact rigorously throughout (something we called “Mission First and Last”), and the deep engagement of all funds in public policy, which we called “Policy Symbiosis.”

These are all essential ingredients in impact investing; however each and every one of them hinges on our fourth core element – “Multilingual Leadership.” It isn’t enough to deeply understand the needs of people with no access to water in Africa, and it isn’t enough to be a hotshot asset manager with 20 years of Wall Street success, or a connected policymaker who understands how to get things done in Washington. The core practices that lead to success in impact investing are inherently cross-sector and complex. Notwithstanding the many other well-documented barriers to scale in impact investing, like the lack of deal-flow, data, proven performance, intermediation, or market infrastructure, we have come to believe the single biggest barrier to the growth of successful social finance is that we, as people, need to catch up. Our educational systems are siloed and our career paths are as well. To succeed as an impact investor, an innovative entrepreneur or a builder in the new impact economy, you must be a multilingual leader, period.

So, what is Multilingual Leadership and how do you master it?

Multilingual Leadership is the science of concurrently approaching investment (or social entrepreneurship or government for that matter) from a business, non-profit/philanthropic, and public policy perspective at all times, and implementing systems to ensure this is not just an individual but an institutional practice. It is awe-inspiring to witness what is so clearly the way of the future when impact organizations such as Accion Texas, Aavishkaar, Bridges Ventures, Calvert Foundation, Elevar, Microvest, RSF, SEAF and many others seamlessly talk about their work as being unremittingly financially-driven (business speak), but with a clear logic model moving the needle on specific social/environmental challenges (non-profit/philanthropy speak), while addressing systemic market failures (public policy speak).

The individuals who run these funds often have uniquely multilingual experiences. For example, Gil Crawford, the CEO at MicroVest, was trained at Chase Manhattan Bank after working for the Red Cross and the US State Department, founded Seed Capital Development Fund, a US-based nonprofit that created financial instruments and attracted funds to capitalize microfinance institutions, and worked for the Latin American financial markets division at the International Finance Corporation (IFC). These are the four main industry competencies we found again and again in our research: finance; non-profit; government; and international development.

But Multilingual Leadership extends beyond simply individuals to institutions as well. Bridges Ventures in the UK is majority owned by its senior management team, but with the nonprofit Bridges Charitable Trust holding a substantial minority ownership interest, with control over any change to the firm’s founding commitment to raise only funds with both financial and social goals. The Bridges team also donates 10 percent of their own profits to the trust’s philanthropic activities, which are targeted at financial support for social issues that cannot be resolved by market-type investment capital.

It’s one thing to document Multilingual Leadership, however, and another thing entirely to develop and cultivate it – which is the shift in emphasis for the three of us at SOCAP this year.

In our Peer Workshop late Thursday morning, “Becoming a Multilingual Leader,” we will experiment with a live training, with most of our time spent in small group discussions facilitated by a group of expert “coaches”, such as Tina Castro from Avivar Capital (formerly director of mission-related investing at The California Endowment), and Christine Looney, a senior program investment officer from Ford Foundation.

Based on a pre-conference survey of people joining the session, we will assign participants into small groups that illustrate and test the different types of approaches inherent in multilingual leadership, drawing out the need for a reinvigorated emphasis in impact investing on education, stakeholder alignment, communication, and field building. And while our workshop will ask participants to take the point of view of an investor, we are certain that the lessons of Multilingual Leadership will be just as relevant for entrepreneurs, journalists, and others trying to crack the code of impact investing to achieve their ends.

We all have much to learn and should rally to that opportunity if we are to capture the full potential before us—whether we work on the ground, or mobilize and deploy capital, to enable greater impact in the communities and world we each care so much about!

Check out the “Becoming a Multilingual Leader” panel at SOCAP14!

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Remembering Priya Haji

Posted by admin on July 16th, 2014

The SOCAP community is deeply saddened by the passing of entrepreneur Priya Haji. Priya was CEO & co-founder of both SaveUp and World of Good, an online wholesaler of sustainable goods. She was a respected voice in social impact and we have been honored to work with Priya since the first SOCAP conference in 2008.

We know Priya’s great work will continue through the countless lives she touched. A fund has been started by Future of Fish Founder Cheryl Dahle for Priya’s two young children.

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Health Intervention in Public Schools

Posted by admin on June 24th, 2014

By: Stephanie A. Whyte MD, MBA; Chief Health Officer, Chicago Public Schools

Prompt: Given your role in the Chicago Public Schools, the SOCAP community will most benefit from learning about the challenges that face the public school system, and its direct relationship to the health of the students. Specifically, we hope to learn from the successes (and failures, if relevant) of implementing health-based initiatives.

In 2012, Chicago Public Schools (CPS) in collaboration with the Chicago Department of Public Heath hired the district’s first ever-Chief Heath Officer. The primary charge was to build the infrastructure to remove health-related barriers to learning. Research shows and most people will agree “Healthy students are better learners.” But how does one promote and prioritize health and wellness in a system whose main objective is to educate students?

From the onset, it is necessary to make the connection between student health and academic success. For example, students who are more fit perform better academically (Grissom, 2005); students miss 51 million hours of school annually due to dental problems (Surgeon General’s Report 2000); and experts agree that 80% of what children learn is processed through the visual system. Quite simply, if little “Johnny” cannot see the blackboard (or smart board as the case may be) he will certainly struggle with reading and literacy.

The state of Illinois mandates vision and hearing screenings for select grades of students annually as well as a comprehensive vision exam for kindergarten students. Over 30,000 Chicago Public School students failed their vision screening last year. Once a child fails a screening, it is the responsibility of the parent to seek further evaluation. One of the systems of support that Chicago Public Schools has in place is a comprehensive vision exam program in which schools have the option to visit a year-round CPS partner-ran vision clinic or receive school-based services at their school. With the school-based option, optometrists arrive with all equipment in tow to provide services to students’ thereby creating access to care and removing vision as a health obstacle to learning.

The impact of this program on student achievement is heralded in the true story of little “Johnny” (not his actual name) below:

A Chicago Public School opted into the school-based vision exam program and its school nursetargeted students who failed the vision screening, were kindergarten students and/or were recommended by the teacher for evaluation. A visit to the school from a vision service provider ensued and little “Johnny” a kindergartener received his state mandated exam. Prior to this exam, “Johnny” had an individualized education plan (IEP) with a diagnosis of borderline autism. During his comprehensive exam, it was noted that “Johnny” had rapid intermittent eye movements, he was referred for specialty care where it was also noted that he had headaches due to light sensitivity and problems with visual processing and tracking.

“Johnny” was prescribed tinted eyeglasses that “slanted” his world and a visor. The change was almost immediate! After receiving the eyeglasses, “Johnny” performed much better in school. He no longer required an individualized education plan and was perceived to be a completely different student by his teacher. “Johnny” progressed so well that he was subsequently tested for and enrolled into one of the district’s regional gifted centers.

Whereas, the impact of this story is profound; it reinforces that “healthy students are better learners.” Health can be a barrier to learning but once identified and treated, unexpected gains and results can ensue. Of note, the Mayor of Chicago has since expanded this school-based vision model, which is expected to serve 45,000 Chicago Public School students in 2014.

For those of us in the trenches, it is a serves a wonderful reminder that we must treat and teach the entire child and leverage all of resources to ensure their success. As we respect the role of the school as the hub of the community, we must strengthen the relationships and engagement of all stakeholders. And in this age of innovation, we must consider those who are not traditionally seated at the table for inclusion in the discussion.

Tune into conversations with Dr. Whyte at the SOCAP Health Conference, June 25 + 26.
Checkout the free conference livestream sponsored by the CDC.