NB Financial Innovation
Impact Investment and Beyond: Mapping support for social enterprises
There is a lot of excitement about the potential of social enterprise to deliver innovative solutions to development problems. There also is a lot of interest from a wide range of actors – donors, commercial banks, NGOs and business schools – to understand, finance and provide support to social enterprises. For example, impact investors have committed a significant amount of capital to the space.
However, no comprehensive data is available so far to establish the actual amount of capital investment in social enterprises and development of the social enterprise market infrastructure, and what quantifiable non-financial support (technical assistance, pro bono work) has been provided.
Who invests where? And how? Comprehensive data on the range of support to social enterprises could allow investments to target underrepresented geographies and sectors. Mapping of financial and non-financial instruments by actor type could inform best practices and facilitate partnerships. Also, levels of support to different components of the market infrastructure could inform donor programs, national and regional social enterprise networks, and enterprise incubators. Data can help establish opportunities, overcome gaps and identify the need for more detailed research and analysis.
With support from the Shell Foundation, ODI undertook a study to establish existing data gaps and to see if it was both feasible and useful to compile data on the range of support to social enterprises in emerging markets (Upper Middle, Lower Middle and Low Income countries). Based on a mapping of existing data sources and literature, alongside stakeholder interviews, we developed a pilot survey tool and collected data from a small sample of actors, across actor types.
Our pilot survey asked for backward-looking data on support to social enterprises along their growth path, and support to market infrastructure development. The survey also disaggregates information on key characteristics of support – geographic and sector focus, expected returns and duration, and instruments used to deliver support.
The study revealed two main findings: first, it was possible to collect and present useful information on support to social enterprises in emerging markets; and second, stakeholders would value the development of regular surveys that capture the full range of support.
The interviews and workshops we held revealed interest in the research aims and approach, and echoed our findings – that there is a need for data which could be generated through the ODI survey approach.
Our pilot sample was small, but the 10 organizations that completed the survey recorded more than US$500 million support for 2010-2012. Several other issues were identified. These include the fact that commercial entities tend to see confidentiality as a restriction to their provision of data, donors find it difficult to quantify the wide-ranging support provided to social enterprise through different means and across different programs, and interpretations of the definitions and structures ODI used varied by actor type.
Said one stakeholder during an interview:
“There isn’t a lot of data out there to show what’s happening in this space – we still don’t know where the white spaces are…it would be a great service to the industry to have the kind of data you’re intending to collect. This is a very ambitious research project, but there is a gap here. Not many are looking at the ecosystem more broadly.”
So, what now?
A wider survey will provide comprehensive data that would allow robust analysis of where money and efforts are being directed. The pilot survey process provided clear lessons for how best to scale the survey.
These lessons are:
- Actor identification – Ensuring that all relevant actor categories are covered, and disaggregated into categories relevant for survey respondents and users of the data.
- Response rate – To achieve a robust response rate, considerable energy needs to be given to outreach. That is, identifying actors and engaging them in the process. This will be achieved, at least in part, by working in partnership with organizations that already compile datasets that overlap with parts of ODI’s data points, and that have established networks of members.
- Survey structure and data points – A more advanced survey tool and system for data analysis is needed, with possible variations in survey questions by actor type, plus further evidence for the data points to be collected and the degree of disaggregation. The aim is to balance the demand for useful data with the time required by busy organizations to complete the survey.
- Dissemination of results – ODI intends that survey data would be publicly available and disseminated through a dedicated website, which would allow for data to be communicated and searched through an interactive online tool. This would also permit other researchers and stakeholders to access survey data directly in order to undertake their own analysis.
Please find out more about our study here:
And please get in touch! We’d be very interested to hear from you if you see opportunities to partner or collaborate on future work. Please email me at email@example.com
Emily Darko is a research officer in the Private Sector and Markets program at the Overseas Development Institute (ODI) in London. She works on a range of issues relating to how the private sector interacts with, promotes or constrains development.