A sustainable business is one that is concerned about the social, environmental, and economic impacts associated with its current and future operations and the ability of the business to meet present needs while ensuring its and others’ long-term survival.

Ideally, the sustainable business seeks to have a positive social impact, environmental impact, and economic impact.

Taken together, a business’s contribution to social justice, environmental quality, and economic prosperity is collectively referred to as the triple bottom line.Elkington (1997).

The triple bottom line (social, environmental, economic) is sometimes referred to as people, planet, profit.

Once considered the purview of governments and nonprofit organisations, businesses are increasingly being called upon to address social, environmental, and economic issues.

Rethinking the business in terms of its triple bottom line impact and performance (social, environmental, and economic) is critical in establishing the foundation for sustainable business.

This requires a shift away from thinking of a business only in terms of its financial profit to shareholders.

While financial profit is necessary for survival, the sustainable business applies a broader view of the business, its responsibilities, and its performance.

Therefore, the sustainability of business is discussed in terms of three interrelated and interconnected dimensions: social, environment, and economic.

Social Impact

The first dimension of a sustainable business is its performance relative to societies and social justice, often referred to as social impact:

The performance of a sustainable business relative to societies and social justice. Internally, the social impact of a business refers to practices related to employees and employment within the business; externally, social impact practices include participating in Fair Trade practices.

While there is no easy solution for reducing social costs while improving corporate performance and profitability, social impact should not be overlooked. The social impact of a business’s operations is viewed both internally and externally and ensures that the business’s entire operations across the supply chain are socially responsible and ethical.

Internally, the social impact of a business often refers to practices related to employees and employment with the business. The sustainable business’s social impact would include such items as the business’s practices and policies related to working conditions, diversity in hiring, opportunities for advancement for women and minorities, lack of discrimination, and the provision of affordable health care and other necessary benefits. In addition, social impact includes wages, breaks, adherence to employment laws, safety, training, and numerous other specific labor practices. Finally, social impact includes the impact on the local public and social services sector as a result of the business’s activities. These are only a sample of the many items considered within the social impact of a business’s operations. Many of these internal social impacts are discussed in greater detail in Chapter 3 "Human Resources".

The sustainable business is not only expected to treat its employees in a responsible manner but also ensure that it is engaged with suppliers that share similar values. That is, a sustainable business is also concerned for the labor practices and working conditions of companies within its supply chain to ensure that the supplies and products it purchases were produced responsibly and ethically. Sustainable businesses will make reasonable efforts to ensure they are not purchasing from suppliers engaged in the use of sweatshops, child labor, or other human rights abuses. In some cases, businesses have worked diligently with suppliers to correct these problems, while in other cases businesses have chosen to change suppliers.

When sourcing products from outside an industrialized country, some sustainable businesses will seek Fair Trade products. Fair Trade certification verifies that living wages were paid to producers and that fair and ethical employment practices were used in the creation of products. Many agricultural goods and handicraft items are Fair Trade certified.

In addition to employment practices, social impact refers to respect of others. This entails the respect of individuals and other businesses encountered locally and around the world. A sustainable business will make reasonable efforts to ensure its policies, practices, products, advertising, logo or mascot, and other aspects of the business are not offensive or disrespectful to clients in the global market.

Case Study: TOMS Shoes

TOMS Shoes is an example of a company making a commitment to maximize its social impact.

In 2006, Blake Mycoskie founded TOMS Shoes with the singular mission of improving the lives of children by providing shoes to those in need.

Shoes are produced in Argentina and China following fair labor practices while creating minimal environmental impact.  Factories are monitored by TOMS and third-party independent auditors.

TOMS Shoes are sold online and in retail locations around the world with the promise that for each pair purchased, TOMS will donate a second pair to a child in need in Argentina, South Africa, and other locations around the world.

The public is invited to participate in “shoe drops” around the world and to experience firsthand the social contribution of TOMS Shoes.

Environmental Impact

The second dimension of a sustainable business is its contribution to preserving environmental quality; commonly referred to as environmental impact:

The performance of a sustainable business relative to preserving environmental quality; this performance is viewed both internally and externally.

Numerous examples exist of companies reducing environmental costs while simultaneously improving company performance and profitability. The environmental impact of a business’s operations is viewed both internally and externally. The business that focuses exclusively on its environmental impact, rather than focusing on the triple bottom line emphasis of a sustainable business, is referred to as a green business.

Internally, the environmental impact of a business often refers to practices related to use of natural resources, waste, toxicity, and pollution. For manufacturing companies, the environmental impact can be large and efforts are generally made to reduce waste, toxicity, and pollution within the manufacturing process. International Organization for Standardization (ISO) 14000 is one example of guidelines for firms on environmental practices and reduced impact.

For service companies, the environmental impact is smaller but should not be overlooked. Consider, for example, the amount of waste the company pays to have removed; chemicals used that eventually find their way into the air, water, or ground (such as cleaning compounds, fertilizers, weed killers, and many others); and pollution created by energy usage, employee commutes, or business travel.

Green building - building that is done with the goal of reducing the environmental impact in the design, construction, and its ongoing life - is a fast growing trend among businesses that wish to be more sustainable. Green building refers to the reduction of environmental impact in the design, construction, and ongoing life of the building. The most frequently utilized standards for green building are the Leadership in Energy and Environmental Design (LEED) of the U.S. Green Building Council.

Recycling programs are often part of a sustainable business’s efforts to reduce waste and toxicity. Sustainable companies consider both the purchase of recycled items for office supplies, furniture, and other needs, as well as recycling or donating its own unwanted items. While most companies or offices may already recycle paper, aluminum cans, and plastic bottles, there is little that cannot be recycled today. For example, clever artists and designers make purses and handbags from recycled soda pop tabs, newspapers, tires, potato chip bags, barcodes, candy wrappers, juice pouches, rice bags, and more. As another example of recycling, Caracalla, a salon and day spa in Little Rock, Arkansas, recycles cut hair by sending it to the nonprofit Matter of Trust to be woven into hair mats capable of absorbing chemical oil spills. Many restaurants recycle used grease through companies that purchase “yellow grease.” Companies can also recycle office furniture and equipment through donations to charitable giving programs at schools and other nonprofits. Numerous options exist to recycle or donate electronics. If you cannot find a suitable place to recycle or donate your company’s unwanted items, consider turning to The Freecycle Network, an online site to give away unwanted items. Many organizations, such as the Zero Waste Alliance, help businesses minimize waste and toxicity. Before discarding anything, the sustainable business will exhaust all possibilities in identifying a second life for the product.

Externally, the sustainable business also considers the environmental impact of suppliers in terms of services and products as well as transportation of goods. A sustainable business will seek out suppliers of services and products that are environmentally friendly. This results in the purchase of products that produce less waste, are less toxic, and generated the least amount of pollution in manufacturing and transportation. Sustainable businesses opt for local suppliers, when possible, in order to reduce the environmental impact caused through the transportation of goods.

Additionally, many sustainable businesses create a green procurement policy, or environmentally preferred purchasing policy, as an integral part of their operations to give preferential purchasing to products and services that are most environmentally friendly. An environmentally preferred purchasing policy would cover all types of products and services purchased by the organization. For example, this policy would give preference to green cleaning products that are less harmful to employees and the environment; or preference to Forest Stewardship Council (FSC) certified wood products that come from sustainably managed forests. As with other attempts to reduce environmental impact, a move toward green procurement can offer cost savings for the sustainable business. For example, Little Rock Athletic Club discovered that if it made the switch to recycled copy paper, the company could achieve a 10% cost savings, 13% fewer carbon dioxide emissions, and 35% fewer trees used when compared to the previous paper products.

There are two additional considerations in determining a company (and supplier’s) environmental impact: water efficiency and energy efficiency. When a sustainable business considers water usage—often referred to as a water footprint—it is seeking ways to become more efficient by reducing its use of fresh water or increasing its recycle rate for water. For example, some businesses have collected water from sink, water fountain, shower, dishwasher, and washing machine drains (collectively referred to as greywater systems) or installed rainwater collection systems to recycle water for use in landscaping, decorative water features, and to flush toilets.

When a sustainable business considers energy usage (often referred to as a carbon footprint or energy audit), it is seeking ways to become more efficient and reduce its energy usage. Through an energy audit, many companies have identified sources of wasted energy and accompanying opportunities to become more energy efficient. For example, in the past, landfills often burned off methane generated from decaying waste. Technologies now allow landfills to cap the methane and use it as a renewable energy source.

The generation and consumption of electricity creates emissions of carbon dioxide (CO₂), or carbon emissions. Within industrialized countries, a business emits a significant amount of carbon emissions. CO₂ is one type of greenhouse gas (GHG) that contributes to climate change (for an objective source of scientific information related to climate change, please visit the Web site of the 2007 Nobel Peace Prize winner, Intergovernmental Panel on Climate Change: http://www.ipcc-wg2.org). All other types of greenhouse gases are measured in their CO₂ equivalents; thus reference to carbon is the standard metric. As a result of the large energy usage and subsequently large carbon emissions (or carbon footprints), many businesses are actively engaged in finding ways to reduce carbon emissions by becoming more energy efficient.

The reduction of carbon emissions, or a reduction of the business’s carbon footprint, is particularly appealing to businesses today partly because of the possibility of a future carbon tax and the growing carbon trade market (see Chapter 4 "Finance"). A carbon tax is enacted and regulated by the government and would add a tax to businesses based on the amount of carbon they emit in their daily operations. A carbon emissions trading system allows businesses to trade “credits” for carbon emissions. Emissions trading, sometimes referred to as a cap-and-trade system, is enacted and regulated by the government, which determines a maximum amount (or cap) of carbon emissions permitted by businesses. Businesses with emissions in excess of the cap will be required to purchase carbon credits (or carbon allowances) from businesses with emissions less than the cap and that have excess carbon credits to sell. There are already several cap-and-trade systems in place.

European Union Emissions Trading Scheme. The European Union has had a mandatory cap-and-trade system since 2005, the European Union Emissions Trading Scheme. It is the largest multinational, multisector system in the world.

New South Wales Greenhouse Gas Reduction Scheme. The New South Wales Greenhouse Gas Reduction Scheme began in 2003 and is a voluntary regional initiative in Australia. The prime minister of Australia will be expanding this system into a mandatory national market by 2010. New mandatory systems are also being considered by leaders in Japan and Canada.

New Zealand Emissions Trading Scheme. The New Zealand Emissions Trading Scheme began in 2009. The scheme is an important component of the country’s goal to be carbon neutral by 2020.

Kyoto Protocol. The Kyoto Protocol is a voluntary multinational, multisector cap-and-trade system. According to the cap-and-trade system, companies from 39 Kyoto Protocol participating industrial nations have a cap on the amount of greenhouse gases to be emitted. Companies are issued carbon permits for their portion of the allocated emissions. The system also allows for emissions trading between member countries. Under the Protocol, industrialized nations can earn emissions credits (or carbon credits) for investing in clean technology projects in emerging economies.

In the United States, the only industrialized country in the world that has not ratified the Kyoto Protocol, there is an emerging infrastructure of voluntary cap-and-trade systems and emissions trading markets. These have arisen in response to the growing awareness of the impact of business activities on the environment as well as in anticipation of a forthcoming mandatory system. For example, as part of the solution to global warming, U.S. President Barack Obama supports the creation of a market value in ecosystem sustainability.Obama for America (2007). His plan would put forth a goal to reduce carbon emissions to 80% below 1990 levels by 2050, although there is no current mandatory mechanism in place to support or enforce this goal.

Chicago Climate Exchange. The Chicago Climate Exchange (CCX) is the most well-established North American voluntary cap-and-trade program. Although voluntary, the CCX becomes legally binding and provides third-party independent verification. The CCX also trades carbon futures through the Chicago Climate Futures Exchange.

Regional Greenhouse Gas Initiative. The Regional Greenhouse Gas Initiative (RGGI) is the first regional mandatory system in the United States. The initiative is administered by 10 Northeastern and Mid-Atlantic states to cap emissions and trade carbon permits. Rather than allocating carbon permits to businesses for free, the RGGI held its first auction of permits in September 2008 and raised $39 million to allow the participating states to invest in energy efficiency and renewable energy technologies.Gardner (2008). RGGI futures are traded on the Chicago Climate Futures Exchange as part of New York Mercantile Exchange’s new Green Exchange.

Western Climate Initiative. The Western Climate Initiative is an initiative of several Western states and Canadian provinces. Although this partnership initiative was created in 2007, a cap-and-trade system is being explored but has not yet been implemented.

Midwestern Greenhouse Gas Reduction Accord. The Midwestern Greenhouse Gas Reduction Accord is an initiative of many Midwestern states and the Canadian province of Manitoba. It is a joint agreement established in 2007 to make efforts to reduce greenhouse gas emissions, although no cap-and-trade system is in place.

At this time, reduction of carbon emissions is voluntary in the United States and none of the aforementioned cap-and-trade systems is binding for U.S. businesses. Nonetheless, as mentioned, the possibility of mandatory carbon reductions has led businesses to analyze energy usage and carbon emissions and seek ways to reduce usage and emissions.

The first step to becoming more energy efficient is to conduct an energy audit (of the company’s energy usage) or carbon footprint analysis (of the company’s full range of operations) to gather baseline data reflecting current energy usage and subsequent carbon emissions from operations. The business can determine the scope of the analysis to be conducted. In a carbon footprint analysis, Scope 1 emissions will measure the direct emissions from energy created on-site through facilities owned by the company. Scope 2 emissions will measure the indirect emissions that result from the company’s purchase of off-site energy through facilities it does not own. Scope 3 emissions will measure other indirect emissions from sources the company does not own and which are created through business activities required to keep the physical facility in operation, such as employee and customer commutes. Scope 3 emissions also consider indirect emissions throughout the company’s supply chain as a result of the purchase of services and goods required for the business.

The analysis will help the business pinpoint areas in which energy usage and carbon emissions are high. Depending on the scope of the analysis, businesses often find that the carbon footprint is highest in the areas of energy consumption, waste, and travel and transportation. The business will then explore alternatives for reducing energy usage and reducing its carbon emissions. Within the area of energy consumption, companies may invest in energy efficiency improvements or purchase (or generate its own) energy from renewable sources (as detailed below in the discussion of renewable energy projects). Within the area of waste, companies will actively seek ways to reduce their own waste as well as purchase supplies with minimal packaging. Within the area of travel and transportation, the sustainable business will encourage the use of public transportation, telecommuting, ride sharing, flexible work schedules, and fuel-efficient cars for employees. Additional considerations are environmentally friendly alternatives for product and supply transport, such as increased fleet efficiency, the use of second-generation biofuels (or fuel created from waste), and local sourcing to reduce the number of miles products and supplies travel to reach their final destination.

Once the company has explored alternatives for carbon emissions reductions, the company will develop a plan for reducing energy usage and carbon emissions. The carbon reduction strategy (sometimes referred to as a climate change strategy, climate mitigation strategy, or climate abatement strategy) is a detailed plan of measurable specific goals with specific actions that will be taken and deadlines for achievement. Progress is then measured regularly (often annually or biannually) to determine progress toward the goals of reduced energy usage and carbon emissions.

After a business has done all it can to become energy efficient, it often seeks to compensate for the remaining unavoidable carbon emissions it is creating through its operations. This step is important in the plan if the business’s goal is to become carbon neutral (sometimes referred to as zero carbon emissions), which is the elimination of all negative environmental impacts from carbon emissions created through the business’s operations. To become carbon neutral and achieve zero carbon emissions, a business may purchase carbon offsets equivalent to the amount of greenhouse gases it is emitting through daily operations. Carbon offsets (sometimes called renewable energy certificates or credits [REC], green certificates, green tags, or tradable renewable certificates) are investments in renewable energy projects that would not be possible without the business’s investment in the offset project. Renewable energy projects are projects that create energy from sources other than fossil fuels, such as wind, solar, geothermal, methane, kinetic, hydropower, ocean waves, biomass, or other renewable sources. For example, zoos are capturing methane from animal waste and converting it to energy; subway systems are capturing kinetic energy from passengers to generate power; and nightclub dance floors capture kinetic energy to generate power.

Carbon offset projects are not currently regulated; therefore, third-party independent verification of the project should be a part of any investment made in carbon offsets by sustainable businesses. Additionally, the type of project should be carefully scrutinized before purchasing carbon offsets. For example, there is controversy over the value of planting trees as a carbon offset since actual carbon removed from the air is dependent on many factors, such as climate, soil, type of tree, age of tree, survival rate of saplings, and so on. It is worthwhile to read third-party independent research comparing carbon offset projects and companies, such as those provided by Kollmuss and Bowell,Kollmuss and Bowell (2007). Clean Air-Cool Planet,Clean Air-Cool Planet (2006). and others. The state of Colorado and the city of San Francisco have both created local carbon offset programs to ensure any business’s (or individual’s) purchase of carbon offsets goes to fund local projects.

Case Study: Wal-Mart

One of the leading examples of corporate environmental impact can be documented through Wal-Mart. In 2005, CEO Lee Scott created a sustainability vision for Wal-Mart and set forth three ambitious goals: to be supplied 100% by renewable energy, to create zero waste, and to sell sustainable products. According to the company’s latest progress report, Wal-Mart continues to experiment with the design of stores and its fifth-generation prototype store uses up to 45% less energy than a typical Supercenter.Wal-Mart Stores, Inc. (2008a). In 2007, the company purchased enough solar power for 22 facilities,Wal-Mart Stores, Inc. (2008a). and in 2008 the company purchased enough wind power for 360 stores and facilities,Wal-Mart Stores, Inc. (2008b). both of which will reduce greenhouse gas emissions. The company has achieved a 25% efficiency improvement in its trucking fleet and has recently installed small efficient diesel engines that allow parked truckers to turn off the motor engine and use the smaller engine for heating and cooling. This is expected to save the company $25 million, 100,000 metric tons of carbon emissions, and 10 million gallons of diesel fuel annually.Wal-Mart Stores, Inc. (2008a). The company is working with its trucking suppliers to manufacture more aerodynamic and fuel-efficient trucks. The company has also introduced a sustainability scorecard in working with product suppliers to make products with less packaging waste. These few examples represent only a fraction of the environmental improvements made by Wal-Mart over the past 4 years.

Economic Impact

The third dimension of a sustainable business is economic impact, the economic effect on a community from the actions of a business. The economic impact of a business’s operations is viewed internally and externally. The sustainable business will consider its own economic impact on the communities in which it operates, such as job creation, impact on local wages, impact on real estate in close proximity to the business, tax flows, investment in disadvantaged areas, impact on public works and social services systems, and other indicators that the business has positively contributed to local economic growth while maintaining corporate profitability. Economic impact does not refer to the profitability of the business as indicated on the financial statements, although profitability is critical for survival. The sustainable business will also look externally at suppliers to ensure they are engaged across the supply chain with other companies that share similar values and practices. It is assumed that the sustainable business’s contribution to a strong and healthy local economy will lead to a strong and healthy future for the business.

Case Study: Murphy Oil

The El Dorado Promise, a strategic philanthropy initiative of Murphy Oil Corporation, is an inspired example of corporate economic impact.Landrum (2008). Murphy Oil Corporation, a Fortune 500 company, is headquartered in El Dorado, Arkansas, a small, rural township with an estimated population of 20,341.U.S. Census Bureau (2007). In order to address the interrelated problems of declining industry, population, school enrollment, and talent pool from which to draw, Murphy Oil Corporation announced that it would donate $50 million to a scholarship program for local students, creating the El Dorado Promise program. The program is expected to provide scholarships to students for the next 20 years.

One year after announcing the Promise program, there was an 18% increase in college-bound seniors.Hillen (2007). After 2 years, the community has seen a 4% increase in school enrollment, the local community college has seen a 16% increase in enrollment, and families from more than 28 states and 10 foreign countries have moved to El Dorado.El Dorado Promise (2008).

The inspiring examples of TOMS Shoes, Wal-Mart, and Murphy Oil Corporation demonstrate the significant impact a company can have in pursuing any of the dimensions of sustainable business. In each of these examples, we see how the social, environmental, or economic commitment has become central to the way in which the business conducts its operations.

This text was adapted by Saylor Academy under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor.

This text was adapted under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor.

Social investment, like social enterprise, has a double bottom-line. It combines financial with social objectives and targets.

Social investment is a form of socially responsible investment. This is an umbrella term used to describe any form of investment that combines investors' financial objectives with their commitment to social concerns such as social justice, economic development, peace or a healthy environment.

Social investment typically uses non-conventional investment vehicles and seeks to make investment available to individuals or communities unable to access loans and other financial services from mainstream banks.

Social investment for the voluntary and community sector

Banks can be reluctant to lend money to organisations that lack the assets or security needed to secure a loan. Many finance initiatives for the sector aim to fill this gap by providing a range of financial products akin to those currently available to support private business.

Funders are also interested in exploring loans as a way of supporting organisations since this can be a way of stretching funds further. Making a loan rather than a grant means that funds become available again later down the line to support additional organisations.

How can social investment be useful?

Amongst other benefits social investment can

• Provide the injection of cash that makes things happen now
• Encourage thinking beyond the short-term psychology promoted by time-limited grant funding
• Promote business planning
• In some cases, offer more favourable terms than traditional high street banks
• Bridge the gap between delivering services under contract and payment by the commissioner
• Be money to use as you choose.

Is social investment an appropriate option for what we want to do?

As organisations develop alternative income streams, such as contractual income through service delivery or earned income through trading goods and services, they may also need substantial investment to build the services they wish to provide.

Where investment is needed to help drive organisations forward , as in purchasing a building, providing new equipment, or starting a social enterprise, social investment may well be an appropriate option.

Social investment also has a place in helping organisations to manage cash flow or even cover ongoing running costs.

Do we have the right skills to manage social investment?

You need to have strong planning, financial and cash management skills. Staff and trustees need to support the idea of social investment by understanding why it is being used and how it will benefit the organisation and its beneficiaries.

Some providers will give support to help organisations work through the finance need and develop skills to manage loans. This can include advisers discussing requirements, provision of loan calculators or providing grants for development.

You will need to ensure that your governing document gives you the power to borrow and potentially, to pledge assets as security.

Are there specialist voluntary and community social investors?

Banks can be reluctant to lend money to organisations that lack the assets or security needed to secure a loan. Many loan finance initiatives for voluntary and community organisations aim to fill this gap by providing a range of financial products akin to those currently available to support private business.

Funders are also interested in exploring loans as a way of supporting organisations since this can be a way of stretching funds further. Making a loan rather than a grant means that funds become available again later down the line to support additional organisations.

Many voluntary and community organisations are new to loan finance so many providers also provide support to help organisations work through the finance they need and to develop the financial management necessary to manage a loan.

What are the potential risks?

When agreeing to any form of social investment trustees are legally binding the organisation to an agreed repayment schedule; terms and conditions; and possibly, security in the form of a charge on the organisation’s assets. Trustees must understand the terms and conditions associated with a loan. Non-compliance can result in demands for immediate repayment.

When trustees act prudently, they are not held personally liable for the loan. However, they should be aware that ultimately the lender may have a charge on the organisation’s assets and require them to be disposed of to make repayments due.

Provide good project management, abide by the terms and conditions, and always communicate clearly with the lender. Remember, if a provider is willing to finance an organisation’s project, they believe it will work. Providers work to understand an organisation’s needs and undertake due diligence before agreeing to any loan.

Understanding the options in social investment

Whether your organisation needs money to temporarily cover cash flow, fund a project or innovate with new services there are types of social investment that could work for you. Your legal structure will impact on the types of investment you can access.

Social investment can broadly be separated into three types: debt finance, equity finance and quasi-equity finance.

Debt finance

A fixed sum of money is borrowed for an amount of time with an agreed level of interest. All of the money is paid back plus interest and/ or charges.

Equity finance

Money is permanently invested in an organisation with shares issued to an investor in exchange for capital. There is no legal obligation to repay the amount invested or to pay interest. The legal structure of many voluntary and community organisations means that equity finance is not currently widely used in the sector.

Quasi-equity finance

Money is permanently invested in the organisation with no fixed amount of interest. This kind of arrangement is often capped, time limited and with 0% return if there is no future revenue.

Debt finance

Secured loan

A loan is given against the security of an asset, such as property or equipment. If the organisation fails to repay the loan then the lender can take possession of the asset. As the lender is guaranteed not to lose anything with a secured loan the interest rates are often lower than other types of loan.

Stand by/ underwriting facility

A lender will commit to provide funding for a specific project and for a set period of time if other funds don't materialise. Interest will only be paid if the loan is drawn down.

Overdraft

An overdraft is activated when an organisation's bank balance reaches zero. If the overdraft is agreed in advance then there will be a set rate of interest. If the overdraft is not authorised then there is likely to be higher interest rates and charges.

Bridging loan

A bridging loan can be used to temporarily cover financial costs brought about by the mismatch in delivery of work/ services and the payment of contracts or grants. A bridging loan is repaid when the payment is received by the organisation. Interest rates tend to be low because the lender is guaranteed to get their money back.

Pre-funding with fundraising

When fundraising for a specific project, the last bit is often the most difficult. With a pre-funding loan organisations can start work, taking advantage of low-cost building terms. The loan will be repaid when the fundraising is complete.

Patient capital

This type of loan typically has low (or no) rates of interest and will be made over a long period of time. Funders of this kind will often forgo returns on their investment in exchange for high social and/ or environmental impact.

Growth/ development capital

This is investment that can help organisations to grow, perhaps to develop new services or products. Growth capital can be a mixture of loans that will be repaid and equity that will repay on future income.  

Equity finance

Community investment

An organisation can sell shares in their enterprise to members of the community in return for their investment. The return on this type of investment will be minimal, just enough to encourage people to invest.

Venture philanthropy

This type of investment can be thought of as investment-plus. A philanthropy specialist will provide investment to an organisation (could also be a loan) along with some form of management support.

Equity investment

Here if an organisation's governing document allows, they can sell shares to individuals or institutions. Investors will be paid dividends at an agreed rate.

Social impact

These are a form of outcomes based contract between the public and private sectors. A private sector organisation involved in a social impact bond will partner with – and fund – a voluntary and community organisation – to achieve the desired outcome.

Charitable bonds

Organisations can raise money for projects or development by issuing bonds. These are a form of long-term debt that must be backed up with the ability to repay the bonds plus any interest at an agreed time. Repayment of bonds may also take the form of goods or services from the organisation.

Quasi-equity finance

Quasi-equity/ revenue participation

If the issuing of shares is against an organisation's legal structure then quasi-equity could be an option. Unlike a loan, this investment is dependent on the financial performance of the organisation. If future expected financial performance is not achieved, a lower or possibly zero financial return is paid to the investor. If performance is better than expected, then a higher financial return may be payable. This kind of arrangement is often capped and time limited. Quasi-equity provides a more equal sharing of risk and reward between investor and investee.

Philanthropic capital

A broad range of financial arrangements which have no expectation of a financial return. This type of investment is often used as a financial guarantee for funds and as a way to encourage other investors. Philanthropic capital allows organisations to develop high risk, but potentially high impact, products and services.

Picking the right social investment for your needs

The types of social investment that your organisation chooses to investigate will depend on many factors.

Some forms of social investment lend themselves to different organisational needs; from managing cash flow to building a community hall, from developing a new service to covering ongoing staff costs.

Your organisation's legal structure will also play a part in deciding what social investment you can access. For many voluntary and community organisations equity won't be an option as it will be against their governing document.

Here's rough a rough guide to which types of social investment suit different needs. This is not a definitive list and other types of social investment might still work for your project.

Working capital

Organisations sometimes need to raise funds to cover their every day staff and operation costs. The following types of social investment might be appropriate:

• Secured loan
• Equity investment
• Charitable bonds.

Specific projects

If you need to raise money for a specific project then these types of social investment might be worth investigating:

• Secured loan
• Community investment
• Equity investment
• Social impact bonds
• Charitable bonds.

Manage cash flow fluctuations

You may find that there's a mismatch between the delivery of goods and services and the payment of grants or contracts. There are types of social investment that can help to temporarily cover cash flow:

• Secured loan
• Standby loan
• Overdraft
• Bridging loan
• Pre-funding of fundraising

Growth

Growing your organisation, such as innovating with new ways to deliver your service, can be high risk but can also be high impact if successful. The following types of social investment are more appropriate for this kind of activity:

• Secured loan
• Patient capital
• Growth/ development capital
• Venture philanthropy
• Equity investment
• Charitable bonds
• Quasi-equity/ revenue participation
• Philanthropic capital.

What are you going to do if you’ve got a digital project you want to get off the ground but no budget?

You need to find support and this often takes time, connections, and the ability to do some serious research. Or in this case, it means just scrolling down through the rest of this piece.

The amazing team at The Developer Society have put together a list of grants of the best upcoming funds and grants that we’ve seen out there.

As a fully not for profit co-op digital agency who believe that a lack of budget shouldn’t get in the way of amazing charities and NGOs from doing better digital work, it's fantastic to see them put together this list of funding for social impact startups and charity digital work in the UK.

We'll also be adding each of the organisations mentioned below to Good Here, so look out for links to those profiles added soon!

Community Foundations

More info: https://www.ukcommunityfoundations.org/list-of-46-community-foundations

More info: https://www.tnlcommunityfund.org.uk/funding/covid-19

A number of community foundations are providing support for small charities and community groups helping people in their area. You can find a full list of community foundations here.

Coronavirus Relief Grants

More info: https://coronavirustechhandbook.com/funding

More info: List of COVID funding

More info: https://www.charityexcellence.co.uk/Home/FundingFindersResources

More info: https://www.corona-funding.org

More info: https://britishmuslimcovid19fund.co.uk

Lists of resources and funding for coronavirus relief.

Coronavirus Pro-Bono Support

More info: Sometime Creative Industry support

More info: Digital Candle

More info: Catalyst Covid-19 Network

More info: The Catalyst

Organisations and initiatives providing support for digital projects during the pandemic.

DEV Support

Design Support

Deadline: Ongoing

More info: https://www.dev.ngo/design-support/

Great for: We're offering pro-bono support for charities and nonprofits looking for design support for digital projects. Register for more information.

Upcoming Deadlines

OCTOBER

EUROPEAN YOUTH FOUNDATION - VARIOUS GRANTS

Deadline: 1 October 2020

More info: https://www.coe.int/en/web/european-youth-foundation/deadlines

Great for: Youth organisation NGOs working across Europe, funding for international activities

GETTY FOUNDATION SCHOLAR GRANTS 2021/2022 FOR RESEARCHERS (FULLY-FUNDED)

Deadline: 1 October 2020

More info: https://www.getty.edu/foundation/initiatives/residential/getty_scholars.html

Great for: Getty Scholar Grants are for established scholars, or individuals who have attained distinction in their fields. Recipients are in residence at the Getty Research Institute or Getty Villa, where they pursue their own projects free from work-related obligations, make use of Getty collections, join their colleagues in a weekly meeting devoted to an annual research theme or the African American Art History Initiative, and participate in the intellectual life of the Getty.

EU PRIZE FOR CULTURAL HERITAGE

Deadline: 1 October 2020

More info: http://www.europeanheritageawards.eu/apply/

Great for: These annual Awards seek to identify and promote best practices in the conservation of tangible and intangible cultural heritage, to stimulate the trans-frontier exchange of knowledge and experience throughout Europe, to enhance public awareness and appreciation of Europe's cultural heritage, and to encourage further excellent initiatives through the power of example. Entries can be related to tangible, intangible or digital heritage . They can be ranging on a scale from small to large, from local to European and international.

HOSPITAL SANCTUARY FUND (MEDICAL CHARITIES IN UK AND IRELAND)

Deadline: 5 October 2020

More info: https://hospitalsaturdayfund.org/apply-for-a-grant/

Great for: The Hospital Saturday Fund considers giving grants towards medical capital projects, medical care or research and in support of medical training. The Hospital Saturday Fund will also consider grants for running costs, and make some grants to individuals requiring medical care.

PRS FOUNDATION - UK MUSIC FUND

Deadline: 5 October 2020

More info: https://prsfoundation.com/funding-support/funding-for-organisations/the-open-fund-for-organisations/

Great for: The Open Fund for Organisations supports new music projects led by promoters, talent development organisations, venues, festivals, curators and large performance groups*.

Projects must involve the creation, performance and promotion of new music and enable songwriters, composers, or solo artists, bands, producers and performers of all backgrounds to develop creatively and professionally.

AVIVA COMMUNITY FUND

Deadline: 13 October 2020

More info: https://www.avivacommunityfund.co.uk/start-crowdfunding

Great for: Small charities that need funding and support. Aviva have partnered with Crowdfunder, to provide support to organisations looking to build their fundraising capacity.

GSMA INNOVATION FUND

Deadline: 16 October 2020

More info:https://www.gsma.com/mobilefordevelopment/gsma-innovation-fund-for-assistive-tech/

Great for: Start ups and SMEs working in Africa and Asia that are driving the digital inclusion of people with disabilities. Successful projects will receive an equity-free grant of between £100,000 and £250,000 to scale their innovation over a 15- to 18-month period.

Ongoing

ANGLO-AMERICAN FOUNDATION

Deadline: Ongoing

More info: https://www.angloamericangroupfoundation.org

Great for: Registered charities working on community development, education and training, environmental initiatives or HIV/AIDS and welfare projects

ARCHITECTURAL HERITAGE FUND

Deadline: Ongoing

More info: http://ahfund.org.uk

Great for: The Architectural Heritage Fund supports communities across the UK find enterprising new ways to revitalise old buildings. They provide advice, grants and loans to support sustainable heritage projects.

ASHWORTH CHARITABLE TRUST

Deadline: Ongoing

More info: http://www.ashworthtrust.org

Great for: Humanitarian causes operating locally, nationally and internationally. For the most part, the Trust looks to fund projects and not core funding.

ASDA FOUNDATION

Deadline: Ongoing

More info: https://www.asdafoundation.org/what-we-fund

Great for: Local charities and community groups

BARING FOUNDATION - STRENGTHENING CIVIL SOCIETY

More info: https://baringfoundation.org.uk/news-story/strengthening-civil-society-programme-new-funding-to-support-civil-society-through-the-pandemic/

The Strengthening Civil Society programme, which supports civil society to use the law to achieve social change, is launching three new funding streams to support grantholders and civil society to tackle the challenges posed by the Covid-19 pandemic.

BIG LOTTERY FUND, AWARDS FOR ALL

Deadline: Ongoing

More info: https://www.tnlcommunityfund.org.uk/funding/under10k

Great for: Community organisations, charities and social enterprises working in the UK.

CITY BRIDGE TRUST

Deadline: Ongoing

More info: https://www.citybridgetrust.org.uk/what-we-do/grant-making/

Great for: Charitable organisations and projects with an emphasis on reducing inequality and enabling voice and representation for disadvantaged groups. Applicants must be based in London.

COVENTRY, WARWICKSHIRE AND SOLIHULL COMMUNITIES FUND

Deadline: Ongoing

More info: https://www.heartofenglandcf.co.uk/coventry-solihull-warwickshire-communities-fund/

Great for: Up to £2,000 in funding available for community organisations in Coventry, Warwickshire and Solihull. The Fund aims to help people who face some form of disadvantage or social exclusion.

DIGITAL FREEDOM FUND

Deadline: Ongoing

More info: https://digitalfreedomfund.org/grants/

Great for: The Digital Freedom Fund supports strategic litigation on digital rights in Europe that contributes to advancing human rights in the digital sphere.

DM THOMAS FOUNDATION FOR YOUNG PEOPLE CENTRAL GRANTS

Deadline: Ongoing, quarterly deadlines

More info: https://dmthomasfoundation.org/what-we-do/grants/dmtf-central-grants/

Great for: UK charities working with babies and young people up to the age of 25 can apply to the central grant scheme. The foundation is particularly interested in supporting projects that aim to help young people who have disabilities, are sick in hospital, or have a pre-existing life limiting condition. Grants of up to £30,000 per year are available.

ESMÉE FAIRBAIRN FOUNDATION

Deadline: Ongoing

More info: https://www.esmeefairbairn.org.uk/what-we-fund

Great for: Esmée Fairbairn Foundation funds charities and social enterprises, and supports work that focuses on The Arts, Children and Young People, Environment, Food and Social Change. Funding is targeted at larger organisations, with a turnover of over £50,000.

FRONTLINE AIDS

Deadline: Ongoing

More info: https://frontlineaids.org/our-work-includes/rapid-response-fund/

Great for: Urgent situations where lesbian, gay, bisexual and transgender people (LGBT) and men who have sex with men (MSM) struggle to access HIV services because of stigma and discrimination – often leading to threats and violence.

GARFIELD WESTON

Deadline: Ongoing

More info: https://garfieldweston.org

Great for: UK charities, regardless of size.

GET UP RISE UP DIRECT ACTION FUND

Deadline: Ongoing, rolling basis

More info: http://directaction.beautifultrouble.org

Great for: The Get Up Rise Up direct action fund seeks to make resources available to local groups (both registered and unregistered) that often find themselves underfunded or under-resourced for a myriad of reasons, and who are planning creative direct actions as part of an ongoing campaign.

THE GIRL GENERATION

Deadline: Ongoing

More info: https://www.thegirlgeneration.org

Great for: Groups campaigning to end FGM

GREEN HALL FOUNDATION

Deadline: Ongoing

More info: https://greenhallfoundation.org/how-to-apply/

Great for: The Green Hall Foundation makes around 100 grants per year to registered charities. Unlike most Trusts the Green Hall Foundation changes it priorities on an annual basis, with specific sectors invited to apply at two annual application periods. Also fairly uniquely each application period closes as soon as the Foundation has received 100 applications. The Foundation usually awards grants of between £1,000 and £10,000.

HERITAGE EMERGENCY FUND

More info: https://www.heritagefund.org.uk/news/coronavirus-update

The fund will be investing the £50m as short-term funding for organisations delivering heritage projects or running previously funded projects, and safeguarding heritage sites to ensure they are not lost to the public.

ISLAMIC BANK TRANSFORM FUND 2020

More info: https://www.isdb-engage.org/en/challenge/call-for-innovation-via-transform-fund-2020

Through Transform, innovative ideas will be translated into real development solutions that will address development challenges and empower the communities and youth in particular to realize their full potential.

THE JOSEPH ROWNTREE CHARITABLE TRUST

Deadline: Ongoing, several deadlines throughout the year

More info: https://www.jrct.org.uk/what-we-fund

Great for: JRCT fund projects across five priority areas: Peace and Security, Power and Accountability, Rights and Justice, Sustainable Future and the ongoing transformation of the Northern Ireland conflict. Their funding priorities reflect the organisation's Quaker values of equality, human rights, justice and environmental sustainability. Funding applications are reviewed four times a year.

LUSH CHARITY POT

Deadline: Ongoing

More info: https://uk.lush.com/tag/charity-pot

Great for: Grassroots orgs working in environmental, animal and human rights. Selected organisations will be featured on Charity Pot body lotion & sold in Lush stores - so it’s a great opportunity to showcase the work you do!

MOZILLA COVID-19 SOLUTIONS FUND

More info: https://blog.mozilla.org/blog/2020/03/31/moss-launches-covid-19-solutions-fund/

Providing awards of up to $50,000 each to open source technology projects which are responding to the COVID-19 pandemic in some way.

THE NATIONAL LOTTERY HERITAGE FUND

Deadline: Ongoing/multiple

More info: https://www.heritagefund.org.uk

Great for: The National Lottery Heritage Fund provide grant funding for heritage projects from £3,000 upwards.

NEIGHBOURLY

More info:https://www.neighbourly.com/NeighbourlyCommunityFund

Grants are awarded to good causes in UK and Ireland whose work involves supporting members of the community suffering economically, socially or from ill health as a result of the outbreak. This may include, but not be limited to, elderly people, those on low incomes and people at risk of food insecurity. They are unrestricted and can go towards food provision, emergency supplies, practical support, running costs, transport and other essentials.

NOEL BUXTON TRUST

Deadline: Ongoing

More info: http://www.noelbuxtontrust.org.uk

Great for: The Trust supports voluntary and community based organisations in Great Britain and in some of the most vulnerable parts of Africa. UK grants have a focus on the welfare of both families and prisoners.

PEOPLE’S POSTCODE TRUST

Deadline: Annual

More info: http://www.postcodetrust.org.uk/applying-for-a-grant

Great for: Non-profit and community organisations working to eliminate poverty, combat discrimination or protect human rights.

PRINCE'S TRUST CORONAVIRUS RESPONSE

More info: https://www.princes-trust.org.uk/about-the-trust/coronavirus-response

Support for young people aged 18-30 with a focus on young business owners and the self-employed.

SEA CHANGERS

Deadline: Ongoing

More info:https://www.sea-changers.org.uk/grants

Great for: Sea-Changers gives grants to a range of UK-based, marine conservation charities and not-for-profit organisations. They are particularly interested in grassroots projects which galvanise community action and projects which increase the number of people taking action for marine conservation. A number of grants are available, including a rolling small-grants programme.

SCHRODER CHARITY TRUST

Deadline: Ongoing

More info: https://schrodercharitytrust.org/

Great for: UK registered charities seeking grants of up to £5,000.

WESLEYAN FOUNDATION

Deadline: Ongoing

More info: http://www.heartofenglandcf.co.uk/wesleyan-foundation-grants/

Great for: Small, community-based organisations and charities working in the West Midlands and Warwickshire. Funding up to £10,000 is available.

WOODWARD CHARITABLE TRUST

Deadline: March, May, October

More info: http://woodwardcharitabletrust.org.uk

Great for: The Trust fund a huge range of activities, but they focus on small charities with an income under £300,000 who meet the trust’s criteria.

WOLFSON FOUNDATION - FUNDING FOR PLACES

Deadline: Ongoing/Multiple

More info: https://www.wolfson.org.uk/funding/funding-for-places/

Great for: Capital initiatives (e.g. buildings) and equipment. Wolfson fund a broad range of organisations and sectors including education, science, health & disability, arts & humanities.

The Global Entrepreneurship Monitor’s (GEM) social impact startups and social entrepreneurship activity research is based on interviews with 167,793 adults in 58 economies, and is thus the largest comparative study of social impact startups and social entrepreneurship in the world.

The report presented a broad measure of social entrepreneurship activity, as well as a narrow measure.

The broad measure considers individuals who are starting or currently leading any kind of activity, organisation or initiative that has a particularly social, environmental or community objective.

The narrow measure imposes the following restrictions: that this activity, organisation or initiative (i) prioritises social and environmental value over financial value; and (ii) operates in the market by producing goods and services.

Here are the main findings from the report :

1. The average prevalence rate of broad social entrepreneurial activity among nascent entrepreneurs in the start-up phase (SEA-SU-BRD) – that is, individuals who are currently trying to start social entrepreneurial activity – across all 58 GEM economies is 3.2%, but ranges from 0.3% (South Korea) to 10.1% (Peru). By comparison, the rate of start-up commercial entrepreneurship averages 7.6% in the world, and ranges from 13.7% in Vietnam to a high of 22.2% in Peru.
2. The average prevalence rate of individuals who are currently leading an operating social entrepreneurial activity (SEA-OP-BRD) across all 58 GEM economies is 3.7%, but ranges from 0.4% in Iran to 14.0% in Senegal.
3. Narrowing down the definition of social entrepreneurship makes a considerable difference to the prevalence of social entrepreneurial activity. In terms of the narrow definition, organisations must be driven by social value creation rather than value capture, and be market- rather than non-market based. The average prevalence rate of narrow social entrepreneurial activity among nascent entrepreneurs in the start-up phase (SEA-SU-NRW) across 31 GEM economies is 1.1%. The average prevalence rate of narrow currently operating social entrepreneurial activity (SEA-OP-NRW) is 1.2%.
4. One of the emerging themes in social entrepreneurship is measuring social impact. About half of those individuals who fi t the broad definition of social entrepreneurs (SEA-OP-BRD) report that they put substantial effort into measuring the social and environmental impact of their social venturing activities.
5. About five in every 10 individuals involved in broad social entrepreneurship activity that is currently operational (SEA-OP-BRD) reinvest profits towards the social goals set by the activity, organisation or initiative.
6. Of the world’s social entrepreneurs, an estimated 55% are male and 45% are female. The gender gap in social entrepreneurial activity is significantly smaller than the roughly 2:1 gender gap in commercial entrepreneurial activity found in some economies. For the Middle East and North Africa (MENA), the difference between women’s involvement in social versus commercial entrepreneurship is particularly striking. Female representation is high, regardless of the type or phase of entrepreneurship in Southern and Eastern Asia, Latin America and the Caribbean.
7. Social entrepreneurship is often associated with young change-makers who are idealistic in nature. The GEM results show that this to be partly true. Among 18- to 34-year-olds, there is a greater representation of nascent social entrepreneurs than nascent commercial entrepreneurs in three of the world’s regions – namely the Middle East and North Africa, sub-Saharan Africa and Western Europe. However, in Eastern Europe, Latin America and the Caribbean, South-East Asia, Australia, and the United States of America (US), there are more nascent commercial entrepreneurs than nascent social entrepreneurs in this age range. With respect to operating initiatives, organisations, or activities, there are more social entrepreneurs than commercial entrepreneurs in every global region, except for Latin America and the Caribbean.
8. Social entrepreneurs’ education levels differ substantially across regions. Sub-Saharan Africa’s social entrepreneurs and commercial entrepreneurs are far less often highly educated than in other global regions. The US and Australia report notably higher proportions of operational social entrepreneurs with a high level of education (62%), while in MENA, Eastern Europe and Western Europe around half of operational social entrepreneurs are highly educated.
9. Although most of the world’s social entrepreneurs use personal funds, the average rate of own investment (expected own investment as a share of total required investment) ranges more widely. Social entrepreneurs who start in Southern and Eastern Asia and MENA commit the highest levels (estimated over 60%), while the share of own investment is lowest in sub-Saharan Africa (roughly 30%). More than a third of the world’s social entrepreneurial ventures rely on government funding, while family and banks are also important sources of funding for social entrepreneurs.
10. In general, social entrepreneurs tend to be quite optimistic in terms of growth aspirations. Patterns of size, use of volunteers and job expectations are fairly mixed across the globe.
11. Social entrepreneurs are visible to the wider population, with an average of 32% of the adult (age 18 to 64) population agreeing that they are often aware of enterprises that aim to solve social problems. For some economies, however, there appears to be a mismatch between visibility and reported activity.

What is tech for good and what is tech for good entrepreneurship?

Tech for good is the intentional use of technology to try and have a positive, measurable impact on the world. It's about using technology to solve big social and environmental challenges.

One of the reasons why technology is so valuable in solving those problems is that it can do it at scale. You can reach scale quickly using technology. And that's something that's never really been possible before.

Tech for good entrepreneurship

Tech for good entrepreneurship is about building mission-led organisations that are using technology to try and achieve those kinds of social and environmental goals.

It's about really having a passion for the problem that you're trying to solve and trying to build businesses that are going to be profitable as well as impactful. And that's what tech for good businesses, tech for good entrepreneurship is all about.

Tech for good solutions

Tech for good solutions have better unit economics and, if done responsibly, have massive potential to drive positive impact at scale.

If we look at the Sustainable Development Goals that have been in place since 2015, there's still massive need to accelerate progress towards achieving the SDGs, with no country actually being on track to achieving them.

The past couple of years, more social and environmental challenges have occurred: climate emergency, social injustices, especially when it comes to Black Lives Matter. More diverse voices coming to the forefront to actually shaping tech policies as well.

There is still massive human need and massive, sort of, potential for digital solutions to accelerate progress towards achieving the SDGs and to ensure that we maintain a sustainable planet, live healthier lives and build a better society.

Tech for good investment

There's growing interest in tech for good at the moment, especially amongst investors, and actually some quite mainstream investors are getting involved in tech for good.

But that means we have to be really clear about what is tech for good and what isn't tech for good, and what the relationship between the companies that are being backed and the investors is in terms of are they aligned.

We have to be clear that tech for good is about more than just avoiding harm. It's not just neutral. It's got to be intentionally positive for people and for the planet.

That's really important because if you take money from an investor, that's a relationship probably for the life of that company, of your company. You really need to be aligned with them to make sure that what you want to do, what you want to achieve is what they believe in as well.

Tech for good movement

Tech for good has developed as a movement. We've seen that it's important to differentiate between tech for good startups and non tech for good startups.

One of the most important things alongside that intentionality and that ability to have a positive impact is that you've also got to be able to make money.

You've got to have a business model built into the startup as well.

It's not just about doing good. It's about doing well as well.

That's something that sets apart tech for good startups perhaps from some of the not-for-profit things that are out there at the moment.

Sometimes those tech for good businesses can  grow very fast. But with that comes some responsibilities as well. With tech for good, as well as being about intentional, about the positive impact that you want to have, it's also about acting responsibly as you scale.

What could be the unintended consequences of what you're doing? Are you treating your people well? Are you treating your suppliers as well? All of those kinds of issues are part of being a tech for good startup.

Tech for good support

So it's about what you do, but also about how you do it. As tech for good has grown, so has all the support and things that you can expect from investors and so on over the last few years.

When we look at the wider impact investing landscape, that's been gaining a lot of traction in the past couple of years. The tech for good investor ecosystem in particular is still very nascent. But in the UK and globally, there’s more and more actors and stakeholders getting involved and driving different aspects of the entire ecosystem.

There are funders who provide investment grant funding. There gareot particular agencies who provide technical services to build better, meaningful and purposeful products and services. There are  policy stakeholders, governments getting involved in shaping tech good agendas to integrate better policies into communities locally as well.

The beauty of the tech for good ecosystem is really that there are so many various aspects of it and so many different players that combined together, it just prints a beautiful, sort of, landscape of different stakeholders collaborating and working effectively together.

Tech for good diversity

If tech for good is not diverse by design, it will be unequal by outcome, which is why it's very important that there is a particular emphasis on ensuring that you are actually addressing the needs of the users you're trying to serve.

With regards to the lean principles, being agile, being fast but not breaking things and really ensuring that whatever process you do and whatever approach you take is done responsibly, is hugely important to tech for good founders.

There are loads and loads of examples of great organisations that are driving tech for good.

Climate change, social division, fallout from the digital revolution – we are facing challenges that can only be tackled with innovative solutions. The open movement seeks to work towards solutions to many of the world’s most pressing problems in a spirit of transparency, collaboration, re-use and free access. It encompasses open data, open government, open development, open science and much more.

Participatory processes, sharing of knowledge and outputs and open source software are among its key tools. The specific definition of “open” as applied to data, knowledge and content, is set out by the Open Definition. Digital social innovations exhibit many overlaps and synergies with the open movement. For them, open represents one of the main drivers for participation and collaboration and innovative potential.

Therefore, a threat to the open movement means a threat to the innovative character of Digital Social Innovations. This is why we call for effort, coordination and political and public will to fight for an open internet.

Know how to use open data

Very often a challenge for open data is a lack of skills among citizens and civil society. Here are some projects you should know about when you are facing similar issues in your work with civil actors.

Open4Citizens, a EU-funded project, seeks to address the gap between the opportunities offered by the abundance of open data and citizens’ capabilities to imagine new ways of using such data.

Open Knowledge’s School of Data, meanwhile, offers online courses to civil society organisations, journalists and professionals covering (open) data analysis, management and publishing.

Another organisation helping to make open data more accessible is Dyntra, which develops indices to measure public information from governments, public authorities, political parties and elected representatives.

Share open data

If you and your organization are more aware of the potential of data for good, and you also have the tools to take more control over your personal data, you are more likely to share your data. This is the central hypothesis behind the DECODE project, another EU-funded project.

DECODE is developing blockchain-enabled open-source technology which will provide tools for individuals to choose whether to keep their personal data private or share it for the public good.

You should have a look at DECODE, which seeks to create new data commons, which will enable new research and new digital approaches to understanding and tackling social challenges.

Know your open data options

There are so many tools using open-source, peer-topeer and decentralised technologies but you don’t know which one to use? Take this little overview: In the field of social media, for example, Mastodon is a small but growing alternative to Twitter, which puts privacy first and lets people host their own instances of the service on their own servers.

Diaspora is another opensource, federated social platform which allows users to register with any hosting “pod” around the world. It does not force its users to use their real identity (like Twitter does), and gives users ownership over their own data.

Mozilla Firefox, Europe’s third-most widely used browser, is open-source, while other non-proprietary browser technologies are emerging such as the P2Pbased Beaker Browser. More broadly, there are hundreds of open-source alternatives to proprietary software for everything from document editing to graphic design, with platforms such as osalt.com collating these in searchable databases.

Become financially innovative

We know that for DSI such as yours, financial sustainability continues to be a struggle, particularly for socially-oriented open-source projects whose funding

tends to be project-based and reliant on volunteers. This is particularly difficult for collaborative DSI initiatives, as funding mechanisms often lack the patience needed for critical mass - and the consequent realisation of network effects - to be achieved. In comparison to classic business models or investments (such as VC funding), only a minority of DSI like Avaaz have reached significant scale. It needs a more advanced, even holistic finance model that takes into account that the principles of the free market do not apply to open DSI as they had never applied to environment protection or social justice either. Moving forward, we must move towards a new model of finance, such as governmental or philanthropic funding.

Develop one message

The global open movement has often tended toward fragmentation, which can stand in the way of advancing its agenda and gaining more widespread support among the public and policymakers. There is a strong case that the movement will be better able to further its aims if it’s able to come together more.

We need a coherent, structured open movement - a broad church with a unifying goal but which can shelter the diverse interests and demands of different trends within the movement.

Without a shared message, a unifying call to action and a collaborative vision for the future, we will not be able to create the digital world we want. Openness needs to be protected.

A thriving open movement is likely to have positive spillover effects on DSI. But the movement also faces grave challenges, to which it urgently needs to find answers: the rise of web censorship and internet shutdowns, government blocks on mobile apps and websites and monopolisation of data.

However, we see the potential for a bright future in which openness becomes the default paradigm for the digital world.

This article originally appeared on DigitalSocial.eu and is published under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

]]>https://blog.goodhere.org/funding-for-social-impact-startups/Ghost__Post__5f5c6b905708e1003c775636Sat, 12 Sep 2020 06:39:47 GMT

The intersection of social impact and finance occurs on many fronts. For example, social impact affects various activities associated with the finance function, such as investments, banking, trading, insurance, and more.

We'll start with capital investments, which are long-term corporate finance decisions related to fixed assets and capital structure. The discussion of the valuation techniques centers on the inclusion of sustainability measures in the analysis.

Green and socially responsible investment opportunities, such as green bonds and emissions trading, are explored in the financial investment section. We then turn to financial services, such as banking and insurance.

Capital Investments

Prior to the acceptance of sustainable projects, social impact startups have to evaluate the feasibility and sustainability of capital investments.

Common financial methods historically employed in capital budgeting decisions include return on investment, payback period, unit cost of service, cost–benefit ratio, internal rate of return, and net present value.

These methods are not always the best choices in sustainable finance since these methods do not explicitly account for cash flows associated with social, environmental, and economic impacts. These methods tend to externalize rather than internalize sustainable costs imposed on the society.

Sustainability Valuation

Valuation determines a company’s worth. Sustainability valuation shows how sustainability adds value to the business. Currently, no existing methodology is considered adequate for sustainability valuation. This has led to much debate surrounding the best way to measure sustainability valuation within the firm.

A recent McKinsey & Company survey shows that executives believe that improvements in social, environmental, and governance performance create value; however, they do not agree on how much or how to measure it.

Respondents agree that it would be helpful if companies reporting on sustainability performance would quantify financial impact, measure business opportunities as well as risks, and be transparent about methodology.

Research has shown that nonfinancial measures are the leading indicators of a firm’s future financial performance. Research shows that firms listed on the Dow Jones Sustainability Index consistently outperform firms not listed on the Index. Determining appropriate sustainability valuation metrics is particularly critical in this time of increasing emphasis on sustainability.

Given the importance of sustainability valuation but the lack of standardized approaches, several efforts have been made to identify or develop appropriate valuation metrics. In a recent effort to valuate sustainability performance, qualitative reports of progress were analyzed and converted to five common financial metrics: ratio analysis, discounted cash flow analysis, rules of thumb valuation, economic value-added analysis, and option pricing.Yachnin & Associates and Sustainable Investment Group Ltd. (2006). Other traditional financial approaches used include cost–benefit ratios and net present value.

Yet it is commonly agreed that existing financial metrics are insufficient to capture the real value of sustainability. As a result, a number of new approaches and methods have been proposed: deliberative monetary valuation, social multicriteria evaluation, three-stage multicriteria analysis, multicriteria mapping, deliberative mapping, and stakeholder decision/dialogue analysis.Stagl (2007); International Finance Corporation CommDev (2009). Yet another approach, the Financial Valuation Tool for Sustainability Investments,International Finance Corporation CommDev (2009). has been developed specifically for the extractive industries (mining, gas and oil exploration, etc.) and could serve as an example for other industries. Until appropriate methods are developed and widely adopted, businesses are left to use common financial metrics.

Capital Budgeting Investment

Capital budgeting decisions allow companies to use financial metrics to compare and prioritize investments in sustainability projects. Return on investment, payback period, and unit cost of service can be utilized in cases that have explicit costs and revenues related to sustainable investment. The use of basic capital budgeting tools, such as internal rate of return, net present value, and cost–benefit ratio, will require some adjustments and cautious use in order to accommodate sustainability analysis. Total cost accounting and life cycle costing analysis are excellent tools for a comprehensive analysis of sustainability-related investments (see Chapter 8 "Accounting" for a full discussion).

Once capital budgeting projects are analyzed, selected, and prioritized, there may exist various outside financing options for sustainability-related projects. The Database of State Incentives for Renewables and Efficiency (DSIRE)Retrieved March 23, 2009, from http:///www.dsireusa.org is a good starting point. State and federal regulations related to renewable energy have resulted in state and federal rebates, performance-based incentives, tax credits, tax incentives, power-purchasing agreements, revolving loan funds, and grants. Among some of the incentives you may find at the DSIRE Web site are tax rebates of up to $350,000 per entity to governmental agencies that purchase alternative fuel vehicles for business and official activities. Manufacturers of vehicles designed to operate on alternative fuels or hybrid diesel/electric may get financing assistance from the Alternative Fuels Conversion Program (AFCP). The AFCP will generally fund up to 50% of the additional cost of purchasing hybrid diesel or electric vehicles instead of a regular vehicle. As a result of the American Recovery and Reinvestment Act of 2009, additional sources of financing for investments in sustainability projects will become available.

Another option is performance contracting. Performance contracting is considered a remodeling or construction financing method whereby the business does not pay up front for energy efficiency projects to be integrated into the current project budget but rather finances projects through guaranteed energy savings expected in the future.

Socially Responsible Investments

Socially responsible investing (SRI) refers to the evaluation of investment options in light of its social, economical, and environmental impacts on the globe in the future. This is an ethical investment strategy that focuses on maximizing both an investor’s financial return and an investment’s sustainability impact. Green investing refers to the investment in securities that focus solely on financing to environmentally conscious businesses.

The Social Investment Forum (SIF) and other SRI publications provide good sources of information about social investing. SIF is a national nonprofit trade association that provides programs and resources to its members to assist them with integrating social, economic, environmental, and governance factors into their investment decisions. The European nonprofit Ethical Investment Research Service also provides a source of research on the social, environmental, and economic performance of various companies as does the Investor Responsibility Research Center and the Sustainable Investment Research International network. Other sources for consumer SRI education can also be obtained from the GreenMoney JournalRetrieved March 23, 2009, from http://www.greenmoneyjournal.com and Clear Profit Publishing.Retrieved March 23, 2009, from http://www.clear-profit.com Both organizations promote SRI and corporate social responsibility through news and research.

SRI is estimated to be a $2.7 trillion industry in the United States.Social Investment Forum (2008). The Interfaith Center of Corporate Responsibility represents the largest association of faith-based institutions making socially responsible investments. Common screens or criteria used to eliminate companies for SRI investments are animal testing, product and worker safety, industry focus (such as gambling, mining, or weapons systems), and product focus (such as alcohol or tobacco).

The proliferation of SRI products and services, such as mutual funds, equity indexes, and investments in individual stocks and bonds, is a reflection of the growing trend in SRI.

Mutual Funds

As a $200 billion business, SRI-focused mutual funds perform competitively with non-SRI funds over time despite concerns for the higher risk levels.Social Investment Forum (2007). Some of the largest families of socially responsible mutual funds are managed by AHA, Calvert, Domini, MMA Praxis, Parnassus, and Pax World. Selection of companies for these funds are generally screened based on governance, ethics, diversity and women, indigenous people’s rights, transparency, equitable and affordable access to water, climate change, stakeholder engagement, weaponry, nuclear power, and other factors.

SRI Indexes

The risk of investing in SRI indexes is lower than investing in individual socially responsible investments. The proliferation of SRI indexes is a reflection of the growing trend for sustainable investment.

Dow Jones Sustainability Indexes (DJSI). The DJSI are comprised of global, European, Eurozone, North American, and U.S. benchmarks. Launched in 1999, DJSI are the first global index tracking the financial performance of leading sustainability companies. The companies are screened based on environmental attributes (climate change strategies, energy consumption), social attributes (human resources development, knowledge management, stakeholder relations), and economic attributes (corporate governance, risk management) in 57 industry sectors.

KLD Indexes. KLD Research & Analytics has developed 19 socially or environmentally related domestic and global indexes.Retrieved March 23, 2009, from http://www.kld.com/indexes KLD’s Domini 400 Social Index was the first benchmark index based on environmental, social, and governance (ESG) factors and has been in use since 1990. It is a value-weighted stock index of 400 publicly traded American companies that are screened based on rankings in employee and human relations, product safety, environmental safety, and corporate governance. The index includes companies not in the S&P 500.

KLD’s Global Sustainability Index (GSI) is a broadly diversified global benchmark based on ESG rankings. The GSI lists companies with the highest sustainability rankings. The ranking takes into consideration the environment, community and society, employees and supply chain customers, and governance and ethics. The index tries to limit the financial risk associated with sector bias.

FTSE4Good Index. The FTSE4Good Index Series measures the performance of companies that meet FTSE’s globally recognized corporate responsibility standards on their environmental record, development of positive relationships with their stakeholders, and support for universal human rights. Member companies are primarily from the United Kingdom, United States, and Japan.

Opportunities for the Majority (OM) Index. The OM Index represents publicly traded firms operating in base of the pyramid markets (see Chapter 9 "Next Steps: Sustainability Strategy") in Latin America and the Caribbean.

Australian Sam Sustainability Index (AuSSI). The AuSSI was launched in Australia in 2005. The AuSSI represents sustainability leaders in 21 industry clusters.

Green Investment

Green investing refers to the investment in organizations that are committed to environmentally conscious business practices, such as the conservation of natural resources, the production and discovery of alternative energy sources, and the implementation of clean air and water projects.

Despite the fact that investing in green companies is riskier than other investment vehicles due to the life cycle of the companies, 64% of respondents identified the environment as the most desirable investment opportunity.Allianz Global Investors (2009). Green bonds, carbon trading, and renewable energy credits (REC) are notable examples of green investments.

Green Bonds, or Qualified Green Building and Sustainable Design Project Bonds, are tax-exempt bonds issued by federal or municipal qualified agencies to businesses to provide financing for green design, green buildings, investment in other projects intended to mitigate climate change, as well as for the development of brownfield sites (underdeveloped or abandoned areas often containing trace amounts of industrial pollution).

Measuring Corporate Performance

As we discuss capital investments and socially responsible investments, it is appropriate that we discuss how to measure corporate performance. Whereas businesses have traditionally assessed corporate performance through financial measures, there is growing emphasis to adopt a long-range and broader perspective that includes nonfinancial measures. There is much support for adopting more comprehensive strategic corporate performance measurement systems. Research has shown that nonfinancial measures are often the leading indicators that drive lagging financial performance.Frigo (2002). Furthermore, nonfinancial indicators can provide a link between current activities and future financial performance of the firm.Frigo (2002). Indeed, a triple bottom line orientation requires the inclusion of nonfinancial indicators of company performance.

The balanced scorecard Kaplan and Norton (1992). is the most popular performance measurement system currently used that incorporates both financial and nonfinancial measures in evaluating overall firm performance. The most recent biennial survey of management tool usage among corporations worldwide shows that 66% of respondents report their company uses the balanced scorecard.Rigby and Bilodeau (2007). The balanced scorecard provides a comprehensive measure of corporate performance.

The balanced scorecard is comprised of four categories of indicators in the areas of innovation, learning and growth, internal business processes, customer value, and financial performance. Organizations select unique indicators within each area that are directly linked to the organization’s strategic goals. Indicators often selected include employee training and corporate culture attitudes, internal business processes, customer requirement conformance and satisfaction, and risk assessment and cost–benefit data. As a management system, it helps identify measures to be taken by providing feedback concerning external outcomes related to internal processes. This allows for the alignment of daily business activities with long-term organizational goals and performance.

There has been an effort by some researchers to show how the balanced scorecard can be used for the sustainability-focused organization.Figge, Hahn, Schaltegger, and Wagner (2002); Moller and Schaltegger (2005); Radcliffe (1999). Balanced scorecards that incorporate sustainability considerations are referred to as Sustainability Balanced Scorecards.

Carbon Finance

In general, carbon finance refers to applying a financial management system, models, and tools to manage a company’s carbon dioxide and other greenhouse gas (GHG) emissions. Companies currently voluntarily attempt to reduce carbon dioxide and GHG emissions (air pollution associated with climate change), yet many believe regulations will soon emerge in this area, thus, the field of carbon finance is poised for growth. Carbon finance encompasses various topics, such as cap-and-trade, carbon emissions trading, carbon tax, renewable energy certificates, and more.

Cap-and-Trade and Emissions Trading

A cap-and-trade system is an attempt to set a limit (a cap) on the amount of allowable carbon emissions from an industry, a geographic region, or a country. Companies are issued carbon permits for their share of allowable emissions. A company’s goal would be to reduce emissions so as not to exceed its permits. Companies with fewer emissions than its permits can make money by selling their excess permits or carbon credits to another company; conversely, companies with more emissions than their permits allow must purchase additional permits. This gives rise to carbon trading, the buying and selling of company rights to emit carbon dioxide into the air. Carbon trading is a market-based mechanism to allocate carbon emissions allowances within the emissions trading system. It is speculated that the rise of a cap-and-trade system could also give rise to the creation of an economically viable carbon capture and storage industry. Carbon capture and storage involves removing carbon dioxide from fossil fuels before or after they are burned for energy. There are already a number of cap-and-trade systems in place that provide the mechanism for emissions trading markets (see Chapter 2 "Operations Management").

Carbon Tax

Levying a carbon pollution tax, or carbon tax, is one of the many options to lower carbon emissions. The tax is enacted upon the amount of carbon emissions and is reflective of the societal costs of carbon pollution. In a carbon tax, the government translates the price per ton of carbon into a tax on nonrenewable fuels, such as natural gas or oil. Rather than externalizing the costs of emissions from these energy sources, the carbon tax is an attempt to internalize costs and make consumers pay for the ultimate environmental damage resulting from the choice to use nonrenewable energy sources.

Sustainable Financing

Banks, credit unions, independent credit agencies, venture capitalists, and insurance companies are financial intermediaries that raise capital from investors and provide financing to operations with public and personal borrowing. Along with the wave of positive economic, social, and environment impact projects, government and financial institutions’ attention has been drawn to the integration of green policies and practices for the financial services industry’s operations, product offerings, distribution, and customer access to services. The insurance industry provides an excellent example of a proactive approach to ecologically friendly sustainability by offering green insurance to manage and reduce climate change risks.

Industry Principles and Standards

As a steward of the global economy, credit managers of financial institutions can base lending decisions on social, economical, and environmental guidelines that support sustainable businesses and their operations. There are two primary industry standards: the Equator Principles and the Wolfsberg Principles.

The Equator Principles. The Equator Principles promote social and environmental policies to increase the positive impacts on ecosystems and communities, offering a consistent approach to environmental sustainability and social management. Equator Principles relate to the management of social and environmental issues in project financing. An Equator Principles Financial Institution (EPFI) is a financial institution that has adopted and integrated all 10 Equator Principles. For any project financing deals above $10 million, EPFIs only provide financing to projects that are socially responsible and environmentally sound. The Equator Principles are used for establishing procedures and standards related to an EPFI’s project financing activities. Currently, 65 international banks have become signatories to the Equator Principles.

The Wolfsberg Principles. With the concerted effort of 11 of the world’s largest private banks and the anticorruption organization Transparency International, the Wolfsberg Anti-Money Laundering Principles for Private Banking (Wolfsberg Principles for short) were established in 2000. The Wolfsberg Principles provide guidelines specifically dealing with antimoney laundering, antiterrorism funding, and the identification and examination of unusual or suspicious activities. The principles also cover diverse policies that pertain to knowing your customers, especially for relationships between high net worth individuals and the financial institutions. So far, they are the best set of nonbinding guidelines concerning appropriate dealing between private bankers and global clients. Wolfsberg Principles deal primarily with appropriate monetary dealings between bankers and their customers.

A sustainability development program in banking would involve the adoption and incorporation of the Wolfsberg Principles and the Equator Principles into the banking business practices. The adoption of both of those principles by financial institutions gives rise to the opportunity for the provision of funding to ecologically friendly, socially disadvantaged, and economically underserved communities and sectors.

Sustainable Development Labeling Project. Significant progress has also been made to improve the quality of investment information provided by financial institutions. For example, French bank Caisse d’Epargne has recently launched a sustainable development labeling system, Bénéfices Futur, to rate savings, loan, and insurance products based on the impacts of financial risk, social responsibility, and ecological changes.Groupe Caisse d’Epargne (2008). The labeling system ranks bank products based on green marketing of products, accessibility of products, and the bank’s investments in and donations to socially responsible sectors and projects that support public interest causes. The labeling system also rates financial products that help to identify gaps between actual and perceived coverage and specify deductibles and effective time periods. Caisse d’Epargne’s sharing of the labeling system with other banks facilitates the spread of sustainability efforts in the banking industry.

Categories of Sustainable Financing

Green financing. Sustainable financing can be classified as either green financing or social financing. Greenfinancing enables investors to finance green projects less expensively, by offering attractive financing, a lower interest rate or tax incentives, and rebates for environmentally friendly investments and investment in green funds or bonds. An energy-efficient mortgage (EEM) is an example of a green finance opportunity. In the EEM case, lenders can make an adjustment to the loan-to-value and stretch debt-to-income qualifying ratios for borrowers with energy-efficient houses because of the projected monthly energy savings. For widespread adoption of green projects, financial institutions, residents, builders, and local government need to be equipped with affordable sustainability knowledge and practical information on how to finance those projects.

Social finance. Apart from being green, sustainable finance also involves social finance activities that enhance local communities and social development. Social finance enables the channeling of investment capital to deliver positive social, economic, and environmental returns for the long run and for a global community. These channels include, but are not limited to, community investing, social enterprise lending, sustainable business, philanthropic grant making, and program-related investments. The Center for the Development of Social Finance is a nonprofit education and research organization that strives to expand awareness of social finance.

Microfinancing has gained great exposure recently as a special variety of social financing. Microfinancing is access to capital for women, minorities, and low-income borrowers who are not able to access loans from traditional resources. Microfinancing provides smaller loans with favorable terms and, for some programs, requires no or little collateral. Microfinancing seeks to aid in the revitalization of urban and rural communities.

Some states have sustainable microloan fund programs for underserved sectors, low-income communities, small businesses, and farmers. For example, the Strolling of the Heifer’s microloan fund offers loans anywhere from $1,000 to $10,000 for terms up to 3 to 5 years. Despite the relatively low budget, such programs are a good investment in the future health of the entire serviced region.Strolling of the Heifers (2009).

Microfinancing also involves making small loans (or microloans) to low-income businesses to stimulate economic growth in less developed countries. Grameen Bank, Kiva, and Prosper are examples of successful microfinance enterprises. Grameen Bank offers no-collateral microloans to 7.5 million women in Bangladesh. Dr. Muhammad Yunus, founder of Grameen Bank, won the Nobel Peace Prize in 2006 for this nonprofit microfinancing concept.

Both Kiva and Prosper provide Internet microcredit to support sustainable causes. Kiva enables quick access to funds for small entrepreneurs especially in Indonesia and India. The average loan from Kiva is around $110 to be repaid in 6 to 12 months with no interest charged. Fifty percent of those borrowers in India were able to graduate out of poverty with the help of Kiva.Malhotra (2008). Prosper links suppliers and demanders of funds in the developed and developing world.

Community Development Financial Institutions

As an integral member of communities, financial institutions provide support for sustainable community social and economic development and ecological conservation. Specializing in promoting economic and community development, Community Development Financial Institutions provide financing to small businesses and housing and community facilities projects that revitalize economically distressed communities. There are four types of community development financial institutions: community development banks, community development credit unions, community development loan funds, and community development venture capital companies.

Community Development Banks. Community development banks are for-profit banks committed to socially, economically, and environmentally sustainable community development. ShoreBank is the largest and most well-known community development bank in the United States and is the only one that takes into consideration all three dimensions of sustainability (social, economic, and environmental). ShoreBank opened in 1973 in Chicago and currently boasts $2.4 billion in assets and $4.2 million in net income with offices and businesses around the country and internationally; it is the nation’s first community development and environmental banking corporation. ShoreBank defines its triple bottom line mission as profitability, community development impact, and conservation. Community development banks exist around the world, the most notable of which is Grameen Bank, as discussed under the topic of social finance.

Community Development Credit Unions. Community development credit unions (CDCU) are nonprofit, cooperatively owned, government-regulated, tax-exempt and insured financial institutions specializing in social financing. They serve low- and moderate-income people and communities by providing below-market-rate small loans to imperfect or no credit history borrowers and by offering financial education for its members. Major funding for CDCU institutions comes from banks, foundations, and other investors for deposits to support their work. Through partnerships with the private sector and participation in outreach and government programs, CDCU institutions are able to leverage community revitalization efforts. Federally chartered CDCU institutions are state regulated.

Community Development Loan Funds. Community development loan funds provide loan funds for businesses, nonprofits, and underserved areas for the purpose of economic development. Loan funds provide financing to traditionally unqualified borrowers who would use the funds for advancing sustainable actions. These loan funds require collateral, but they have flexible payment schedules. The government’s sustainable development loan fund offers low interest loans up to $500,000 to businesses for green projects like utilizing sustainable resources, producing recyclable finished products, and installing pollution prevention procedures.

Community Development Venture Capital. Community development venture capital (CDVC) funds provide equity capital to entrepreneurial companies that will ultimately benefit low-income people and distressed communities. The amount of the investment funding from CDVC funds is generally less than that of their traditional counterparts. The average CDVC fund investment for small businesses was about $331,000 per company in 2000.Ward and Patterson (2003). Kentucky Highlands Investment Corporation (KHIC) runs a very successful rural economic development program. KHIC’s ventures contribute at least 68% of the net growth of manufacturing jobs in Kentucky Highland’s nine target counties from 1970 to 1990. The positive entrepreneurial capitalism spurs from the enhanced availability of community venture financing.Ward and Patterson (2003).

Sustainable Insurance

The insurance industry is particularly interested in sustainability, given the impact that climate change has had on this industry’s profitability. In fact, climate change is the number one risk to the insurance industry.Ernst & Young (2008). According to an Ernst & Young study,Ernst & Young (2008). climate change could result in increased mortality and health problems, increased environmentally related litigation, increased conflicts over control of resources, and negative impacts on capital markets.

According to a 2005 study by the Association of British Insurers, if carbon dioxide emission levels are doubled, the capital requirement for insurers could increase by $76 billion, which is an 80%–90% increase due to the increased risk of tropical cyclones in the United States and Japan.Association of British Insurers (2005). Allianz, Europe’s largest insurer, estimated that losses due to climate change could be as high as $400 billion. In addition to property loss, insured companies may face carbon-regulatory risks governing its investment and insurance policies on green projects. Given these challenges, the industry is addressing the concept of sustainability and is taking notice of social, environmental, and economic impacts.

Many insurers have increased their focus on financial risk management. Yet proactive insurers are making progress in developing both investment strategies to “participate in the ‘green’ revolution in the financial markets” and in creating new climate-friendly products to address climate change risk.Mills (2007). Many of these financial products deal with green building, hurricane-resistant design, promotion of alternate fuels, and sustainable driving practices to reduce carbon emissions. Proactive insurers encourage the insured to participate in the insurance sustainability effort.

Insurance companies play an important role in social, economic, and ecologically friendly sustainability. Swiss Re has sold weather-risk products to 320,000 small farmers in India. For renewable energy-related insurance products, Willis Holdings covers potential power underproduction of wind farms. As a pioneer in offering green-building policies, Lexington Insurance Company’s new policies will pay the insured to rebuild a home using environmentally friendly and energy-efficient materials after it is destroyed by natural disasters.Tergesen (2008).

In Japan, Sompo Japan Insurance and Tokio Marine Nichido Fire Insurance Co., Ltd. have given premium discounts to 10 million policyholders who drive low-emitting cars. Travelers and Farmers cut 10% off the policy premium for hybrid cars. Progressive and GMAC insurance companies offer pay-as-you-drive (PAYD) policies in parts of the United States. In the U.S., automobiles account for 25% of all GHG emissions and it is anticipated that implementing PAYD policies and hybrid vehicle incentives could reduce emissions by 10%.Bordoff (2008).

Increasingly, insurance companies have utilized exclusion clauses—tightened conditions to foster the right decisions by customers. Some insurance companies limit liabilities for emitters of greenhouse gases and for companies that do not have a climate mitigation plan in place. “Development and establishment of business-continuity management (BCM) procedures [is used as] a prerequisite for adding on business interruption coverage to a company’s property insurance.”Ross, Mills, and Hecht (2007). As one of the world’s largest re-insurers, Swiss Re, Munich Re requires disclosure of a company’s climate strategy in their directors and officers insurance application.Makower (2005).

The finance function, as well as the finance industry, is greatly impacted by sustainability considerations. Every aspect of finance, from investments to banking and from trading to insurance and risk, requires new thinking when we consider the social, economic, and environmental impact of business.

This text was adapted by Good Here under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 License without attribution as requested by the work's original creator or licensor.

]]>https://blog.goodhere.org/digital-wellbeing/Ghost__Post__5ecbab3172a8d5003c313e96Sat, 05 Sep 2020 11:30:00 GMT

As our personal, networked devices have become ubiquitous in all parts of our lives, our anxiety about what they might do to our individual as well as collective wellbeing has grown. But there is no way to – and also no sense in – turning back.

Instead we must strike a balance between remaining critical and responsible when considering technology and at the same time being open to new possibilities for growth and power which technology has to offer. Here are some steps to consider.

Know yourself

Wellbeing can be defined as a measure of freedom to spend one’s time in a way that aligns with values. So, an introspection about your wishes, needs and values is ultimately the only way to understand, and then shape, your relationship with your digital devices for your own wellbeing. So, what’s important to you? It might be focus, in the sense of having time and space to deeply concentrate on a task or topic. Or, perhaps what you cherish most is reliability, meaning that you prioritise responding to people within a certain time. Or, if curiosity is a core value, frequent change and exploring new software might really resonate.

Know your tech use

There are tools that give us transparency about how much time we’re spending on our devices or on various websites. Some of the first such initiatives were developed by the open-source community, such as browser plug-ins Mind The Time and RescueTime, or by campaigners for digital wellbeing, such as Common Sense’s tool Moment. Interestingly, in recent months Apple and Google have both launched their own suite of tools to offer this kind of transparency. At this point, it’s not necessarily simply about reducing overall intake, it means becoming more conscious of your tech use, as a first step toward bringing it in line with your priorities.

Gain focus

Digital devices make it so easy to jump between different tasks and platforms, that our attention becomes more and more fragmented. This keeps us not only from real productivity, but can also leave us feeling confused, exhausted, and overwhelmed. Some applications offer help by mediating the information users receive in order to sustain focus. Isolator is a programme that blocks out all the windows except the one the user is currently working on, preventing them from seeing other activity such as email notifications. Other applications (like the browser plug-in LeechBlock) disable functionality within devices, based on the logic of “saving” users from themselves by curtailing options. Taking a more blanket approach, Freedom blocks internet access completely for a specified period of focus.

Clarify shared expectations in your organisation

We experience a shift towards instantaneous communication. Starting with email and compounded further by the adoption of instant messaging tools within organisations, the fact that messages are delivered instantly has created the additional pressure to read and reply immediately. But is this always necessary? It can be valuable to have  a conversation among your colleagues about when everybody is expected to be on call – and when not. If you work decentrally and communicate digitally with each other for the most part, you might want to create regular occasions to meet in person – for your own wellbeing as well as a sense of belonging in the team.

Let’s change the system

It’s extremely common for websites and apps to make money not by charging people to use them, but instead letting them use it for free and selling advertising and/or monetising user data. This naturally creates a strong incentive to keep users fixed to their screens for as long as possible, whether this is actually good for them or not. More and more organisations are working to move beyond this paradigm, explicitly rejecting the conventional financing model, instead typically depending on crowdfunding, volunteered time or other sustainability models. You can not only use the hardware and software developed by them, but also help drawing people’s attention to matters of digital wellbeing, and demonstrating the plausibility of other routes we might collectively take. Hence the impact of DSI in this sphere can extend way beyond the users of a specific product – it can also help to shift an entire system.

All in all, there are no quick fixes. Yes, there are some strategies and even digital tools (see below) that can help us on our way, but rather than diving straight into those, there are a couple of important steps first. It’s not about accepting a set of prescribed ideas, the important part lies in the process of reflection. We have to be conscious about our digital diet.  When are we online, why and which effect has it to be always connected, to feel always “switched on”?

Resources for further information

ٚOur trend analysis “Wellbeing for Social Innovators” focuses on the question what new technologies have done to our wellbeing, and what we can do about it in the near future.

ٚThe website humanetech.com contains not only their own information and analysis, but also practical tips and links to apps that can help people manage their relationship with tech.

ٚLearn more about how digital technologies can enable us to tackle social challenges in areas ranging from healthcare and education to democracy and the environment.

This article originally appeared on DigitalSocial.eu and is published under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

]]>https://blog.goodhere.org/catalyst-and-the-national-lottery-community-fund-covid-19-digital-response/Ghost__Post__5f508f497bc377003c06ab18Sat, 05 Sep 2020 06:40:00 GMT

The Catalyst and The National Lottery Community Fund COVID-19 Digital Response was launched this week.

The fund is open to charities and other civil society organisations based in England whose operations have been affected by COVID-19 and who need emergency funding to deliver essential digital services.

Opportunities for charities and other civil society organisations

The current programme comprises two funding avenues: a short Discovery phase for charities nearer the start of their digital journey, and a longer Development phase for those at a more advanced stage. Funding will be given as a mix of grants and expert support, ranging from £5,000 up to £60,000.

Applicants must be part of a formal or informal network of ten or more other charities, and must be working with one of nine key groups facing disproportionate challenges as a result of COVID-19.

Full details and a link to the application form are available on the Catalyst website.
DEADLINE FOR THE DISCOVERY STAGE IS 7th SEPTEMBER!

Opportunities for digital, data and design agencies

Catalyst are keen to hear from experienced digital partners to work directly with charities and help deliver the support programme.

They are looking for six experienced training partners to teach charities Discovery over a 4-week learning programme in October, and tens of digital agencies to carry out 10-week Development projects starting in November with charities that have a validated problem area to explore. Contracts of up to £28,000 per organisation will be available.

Full details are available on the Open Projects tendering page of our website, where more tenders will be added over the coming weeks.

If you have additional queries, please contact the Catalyst team.

]]>https://blog.goodhere.org/ethical-platforms/Ghost__Post__5f34dd5829704f003c7c20a4Sat, 05 Sep 2020 06:31:00 GMT

Humans are a social species and almost everything we do, both in our working lives and personal lives, involves the linking up of two or more parties for a mutually beneficial exchange.

Nowadays online platforms often do the job of creating these matches, whereby they’ve quickly transformed and disrupted many industries.

Meanwhile, it has become increasingly clear that these platform behemoths are causing real damage to the social fabric through value extraction, exploitation of workers, rampant collection and monetisation of user data and negative effects on whole markets and the environment.

As social organisations we have a special responsibility, but also a huge need for the services these platforms offer, e.g. social media for communication or crowdfunding for financing.

That leaves us with the question under what circumstances we should still use online platforms after all.

Who runs the platform?

Many of the platforms that dominate today’s digital landscape are built by private companies, which sub- ordinate social issues to their unconditional quest for profit.

But there are alternatives – created by social entrepreneurs, hackers and activists (and also national governments) who have the use of digital technology for social causes at their core.

One example is the search engine Ecosia which uses the ad revenue from the searches to plant trees where they are needed the most.

What about business practices?

Platforms could distinguish themselves through a commitment to ethical business practices, for instance:

• fighting exploitation by ensuring fair payment to workers and providers of services through the platform
• a rejection of surveillance by refraining from collecting and monetising user data
• or pledging a significant portion of generated revenue to pro- social causes.

Over the years, alternatives have been created on the model of already successful platforms, differing only by their ethical principles.

FairBnB, for example, offers a similar service to AirBnB but with a commitment to the principles of platform cooperativism with the vision of a more community- centred kind of tourism.

Is it for a tangibly “good cause”?

Some platform functions – for instance donations to charitable causes (e.g. betterplace.org), matching volunteers to projects (e.g. All for Good), or the sale of fairtrade or sustainable versions of consumer products (e.g. Toms) – have an especially clear pro- social purpose.

And even if these are operated by for profit companies, they are characterised by a strong propensity for ethical business practices.

Could you build your own platform instead?

There are scenarios where the market doesn’t offer an ethical platform for your organisation to use.

Disillusionment with the capitalist giants could create a demand for more ethical alternatives. As indicated above, social organisations may attempt to compete with corporate platforms and use their ethical credentials as a competitive advantage, to lure away ethically conscious consumers.

But beware, ethical platforms will not have access to resources that are remotely comparable. In other cases they may be able to thrive free from competition from
profit-driven alternatives if there is no clear business case to the platform. If, to put it another way, it’s not possible to extract monetary value from the platform’s interactions (or at least not enough to finance the platform’s operations).

There might be a need of such a platform nevertheless, so that funding and cross-
financing could be worth considering. In any case the simultaneous development of the same idea for a platform by different organisations should be avoided.

Instead, this could be an opportunity for cooperation. Public Spaces (internet for the common good) for example claims to build and support a software ecosystem that takes care of the users instead of the stakeholders.

The emergence and increasing monopolisation of online platforms comes at a significant social cost. This has less to do with the nature of platforms per se, but rather the way that platforms are run and by whom.

As a user and organisation, we have the choice to whom we give our money, our attention and our data – as long as we are willing to make compromises in our pursuit of efficiency.

Resources for further information:

Our trend analysis “Ethical Platforms” is about efforts to use the power of the platform model, but in ways that are maximally socially beneficial and ethical, working to cure some of the pathologies we are currently witnessing in “platform capitalism”.

The biggest repository of resources on Ethical Platforms comes from the global “Platform Cooperativism” community, whose intellectual leading light is Professor Trebor Scholz. The organisation’s website contains not only articles and information about events, but also a directory of currently active platforms globally.

Learn more about how digital technologies can enable us to tackle social challenges in areas ranging from healthcare and education to democracy and the environment at DSI4EU.

This article originally appeared on DigitalSocial.eu and is published under the Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

]]>https://blog.goodhere.org/introducing-good-here-find-social-impact-startups-and-funding/Ghost__Post__5f49cc7670afe4003cb448ddSat, 05 Sep 2020 04:11:00 GMT

There is a tremendous amount of doom and gloom surrounding our modern way of living as a result of dramatic media coverage, heated political movements, and the bleak reality of challenges like the climate crisis and rising political extremism.

Here is just a snapshot of just some of the issues the world is facing at the beginning of September 2020:

• There have been 28 million cases of COVID-19 worldwide, with 875,000 recorded deaths
• The climate crisis is accelerating, with the five warmest years since records began have all occurred since 2015
• Approximately 27 million people are currently enslaved in the human trafficking trade around the world
• More than 300,000 children under the age of 18 are being exploited as child soldiers in armed conflicts worldwide
• Millions of people are displaced in regions where ethnic cleansing and violent conflict occurs
• Throughout history, women have been denied the knowledge, means, and freedom to act in the best interest of themselves and their children
• There is significant bias in the killing of unarmed black Americans relative to unarmed white Americans by police, which sparked the 2020 Black Lives Matter protests, one of the largest movements in U.S. history.

Painting a picture of what we're experiencing as a result of these monumental societal shifts is important, but it doesn't do enough to inspire hope or motivate people to actually do something to reverse these trends and improve their local, national and international outlook.

Since the COVID-19 pandemic began, there have been unbelievable stories of courage, community and togetherness as people came together to support each other through the crisis. During lockdown, many found the time and space to create the social impact startups that they've been dreaming of - or desperately needed.

There are countless efforts across every industry to reverse the trend and get us out of this mess. Yet our most talented workers are building social apps, advertising platforms, and superfluous consumer products.

The vast majority of private and philanthropic capital isn't being directed toward the biggest threats humanity has ever faced. We must change this if we expect to mitigate the worst impacts of the challenges we currently face.

Since the start of the century, a growing movement of social entrepreneurs are building inspiring startups  for a variety of social issues in areas such as healthcare, education, climate change, human rights and more.

The Global Entrepreneurship Monitor (GEM), a multi-country study, calculated that 3.2 per cent of the world’s population was engaged in starting a social venture (compared with 7.6 per cent starting commercial ventures) and 3.7 per cent running an established one. And those numbers are growing.

To meet this demand and to helps scale the most successful social impact startups, there are a growing number of social innovation funders, impact investors and government organisations who offer capital through a range of vehicles, including venture capital, grants, crowdfunding, social impact accelerators and more.

In fact, the current size of the global impact investing market is estimated to be $502 billion.

Enabling skilled individuals to work on social impact solutions is critical, as well as making sure the funding opportunities are in place for the best startups to scale.

But there are lots of questions we need to answer in order to make this happen:

• How do we discover new social impact startups so we can contribute to their success?
• How can we avoid duplication in startups tackling the same areas?
• How can we find social startups that work in one location and see if it can work in other places?
• How can social impact startups find funding and access to capital to scale their ambitions?

That's where Good Here comes in.

What is Good Here?

Good Here helps you discover social impact startups, connect with the social impact community, and find social impact funding.

Our mission is to highlight the organisations working to solve social issue, focus more attention on progress, directing support to teams on the front lines, and connect the social impact community.

Why did you decide to create Good Here?

We decided to create Good Here after seeing dozens of people go through a similar process of cataloging interesting social impact-focused companies in spreadsheets, blog posts, notes, and elsewhere.

Other projects, such as SI-Drive and Digital Social Innovation, appear dormant or limited in scope. AngelList does have a range of social impact startups listed, but their platform focuses a lot more on for-profit enterprises.

The goal is to unify these efforts and provide the content free to anyone who might find it useful.

What can you do on Good Here?

Using Good Here, the social impact community can:

• showcase social impact startups through organisation profiles
• tag their organisations as part of networks like research alliances or membership bodies;
• explore other social profiles in  through our open database
• identify social impact funding opportunities,
• find inspiration and stories of social impact through case studies, blogs and research.

At launch, Good Here is tracking 1,417 startups and 453 funders. Our ambition is to become the central place to find, launch and connect with social impact startups and the social entrepreneurs behind them.

What is on the roadmap for Good Here?

This is really just the beginning of what we’d like to see the Good Here become.

We want to go deeper by including key organisational attributes like headcount, location, investments, and more.

There are also plans to increase the breadth of the database by including books, podcasts, events, data sets, and other important resources related to social impact.

Upcoming features on the Good Here roadmap include:

• bookmark your favourite social impact startups
• input your location to find social impacts near you
• connect with other social entrepreneurs
• see which social impact investors have invested in which startups
• activity streams with updates on the progress organisations are making

Take a look at our product roadmap for an idea of the platform we want to create - and give your ideas too.

Where does the data come from?

Our database is an accumulation of contributions curated by a team of volunteer editors.

We supplement contributions with publicly available data, allowing us to provide key facts about about each organisation.

Why is X category or Y organisation included?

The topic of what does and doesn't qualify as "creating social impact" is filled with differing opinions. The reality is there is not a single right way to create social change, just a myriad of opportunities to have a social impact.

As a result we specifically avoid playing the role of arbiter and have a liberal acceptance policy. In the future, we will provide ways for our users to weigh in on the impact of specific organisations.

For now, join the discussion on our community for how we categorise social impact startups.

How can I support Good Here?

We're grateful to have the support of anyone who believes in what we're doing.

Check out the Contribute page on our website for more information on how you can help.

We also have an open community that you can join and help shape the future of the Good Here project.

How can you get involved?

It's a laborious process to collect good data, images descriptions for each project, which is why some profiles are better than others and many key data missing.

Apply to join our editorial team if you want to help add and update social impact profiles.

Got an in idea for the Good Here platform? Leave your suggestion in our community.

How can I contact the Good Here team?

Have a question that you can't find the answer to? Tweet us at @goodhereorg or email us at hello@goodhere.org.

Here's to making good happen here, there and everywhere!

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