Seeking a double bottom line
ONE of the hottest buzzwords in philanthropy is impact investing, a form of investment that seeks both financial and social returns. The Rockefeller Foundation coined the term in 2008, and the excited chatter over this concept has started to translate into concrete action around the world.
In Asia, impact investing is still a new concept, and outside of Australia it has yet to take off in a big way.
"Impact investing has indeed become a vogue, frequently discussed in forums like this, but we know there is still much more room for better understanding," said Francesco de Ferrari, Credit Suisse's head of private banking in the Asia-Pacific region, at the bank's annual philanthropy forum in Singapore.
He noted that for over a decade the Swiss bank has been developing investment solutions for clients who wish to achieve a "double bottom line" of making money and doing good.
One of the pioneers in the region is Hong Kong-based David Yeung, who operates his charity like a venture capitalist, focused on the single cause of reducing the consumption of meat in order to help save the environment.
His social enterprise, Green Monday, has set up a platform for restaurants, schools, individuals and government organisations to adopt vegetarianism, food rescue and other green and sustainable practices. Its premise is that the livestock industry is one of the main sources of greenhouse gases.
Mr Yeung's enterprise is split into three entities: the Foundation is a not-for-profit enterprise that focuses on advocacy and education; Solutions is a consulting arm which helps companies that want to turn green but do not know how to; and Ventures is an incubator for green entrepreneurs to start businesses and find investors.
"NGOs are handicapped not by the lack of capital but the lack of other resources, namely human resource in innovation and creativity. In the last 10 years, I have been applying my business know-how to social issues and environmental issues - on how, with limited input, do we maximise the social return," he said at a panel session on impact investing.
Mr Yeung represents a growing trend of young philanthropists who are keen to give back through impact investing.
"The biggest driver of impact investing is the next generation. It is amazing how early and strong the drive to make an impact is. The main difference with these people is they are no longer satisfied with making a lot of money; they are also concerned about how this money is made," said Julia Balandina-Jacquier, author of the book Guide to Impact Investing for Family Offices and High Net Worth Individuals.
Dr Balandina-Jacquier is a seasoned impact investor and a trusted adviser to some of the largest European families, private foundations, international banks and the Swiss government. She worked with 45 affluent families around the world in the course of writing her book.
Speaking on the panel, she noted that for younger or next-generation entrepreneurs, starting a social enterprise or investment vehicle allows them to be successful in business as well as satisfy a need to give back to society. Despite this growing enthusiasm, however, she said that there is still a "gap between desire and implementation" in Asia.
One country that has taken the lead in the area of impact investing is Australia, where investments in social enterprises and instruments such as social impact bonds and funds are gaining in currency, said Ian Learmonth, executive director, impact investing, Social Ventures Australia (SVA).
"Not only have we achieved a lot in impact investing, but capital in the world is a lot more socially conscious compared to 10 years ago. People have started to question the single- mindedness of capitalism," said Mr Learmonth, a veteran banker who joined SVA in 2011.
Another former banker who has made the jump to impact investing is Philo Alto, who founded Asia Value Advisors, based in Hong Kong, in 2011 to create positive social impact. "What can I do to leverage my banking skills to help give back? I looked at how I could deploy the banking mindset to address philanthropic challenges," he said at the panel session.
Regardless of whether you choose to give back through impact investing or in some other way, the most important thing is to choose a cause that resonates with you, advised Mr Alto. "It is important to think about your philanthropic intent from your perspective - what does it mean to me personally and how do I move on from here."
