Francisco Noguera

Latin America in the Spotlight, Part 4: Jimena Betancourt from NESsT, in Chile

Part 4 of Latin America in the Spotlight features Jimena Betancourt, Enterprise Development Manager at NESsT. Make sure t cath up on Parts 1, 2, 3, and stay tuned for updates from the Miami Social Enterprise conference, which starts this afternoon. Please describe your organization and the partners you work with:

Jimena Betancourt: NESsT is an international nonprofit organization working to solve critical social problems in emerging markets through the development of social enterprises.

We take an engaged approach to developing social enterprises. Our main initiative, the NESsT Venture Fund, is a philanthropic investment fund providing long-term capacity building, technical assistance, and financial support to social enterprises instart-up and expansion phases. The Fund has adapted tools and process of private equity funds to the development of social enterprises in emerging markets. Our portfolio currently consists of more than 50 social enterprises to which we have provided long-term (5-7 years) capacity and grant investments. In Latin America alone we have a portfolio of more than 20 social enterprises, including a pipeline of more than 70 organizations. The NESsT Venture Fund operates in Argentina, Brazil, Chile, Ecuador and Peru.

NESsT also operates a consulting arm, NESsT Consulting, that provides professional training and consulting services in social enterprise development to clients worldwide. We work with foundations, nonprofit organizations, international organizations and corporations offering training and technical assistance on a variety of social enterprise topics, as well as in organizational sustainability and venture philanthropy.

Lastly, we involve hundreds of emerging market business professionals each year to provide volunteer advice and expertise to our portfolio of social enterprises. The NESsT International Business Advisory Network (IBAN), for example, is a group of individuals — many with personal and/or professional ties to the regions in which NESsT operates — that provides pro bono advice and assistance to NESsT on a strategic level. In your opinion, what sets Latin America apart in the social enterprise space? What makes this market unique?

Jimena Betancourt: There are interesting contradictions related to social enterprise in Latin America. On the one hand, there are no regulatory or legal frameworks recognizing social enterprises, and social enterprise is generally not part of any public policy debate. Although civil society organizations can sell products and services, they often have to pay income tax and there is no recognition of the many positive effects brought by them

Furthermore, social enterprise lacks visibility and is generally not well known or understood.

However, there are great demands on the part of Latin American civil society organizations for social enterprise development support. They recognize the need for training, technical assistance and financial support to develop enterprises and ensure that they enhance their social mission. This fact is evidenced in the results of social enterprise competitions announced by NESsT which draw hundreds of applicants at a regional level.

Another interesting element of LA is the diversity among countries. Colombia and Brazil have sophisticated social enterprise sectors, while other countries less. In countries like Ecuador, social enterprise is not generally widespread among CSOs. In Central America it is a new concept that NESst is working to develop. Could you share sha one or two examples of social enterprises supported by NESsT and the impact they’re having?

Jimena Betancourt: Examples of two social enterprises in Chile that are supported by NESsT, under the NESsT Venture Fund later-stage portfolio are:

ONG Forestales, for instance, promotes the conservation sustainable management of native forests in Chile. Their social enterprise Ingenieros Forestales, which developed a firewood certification program and buys certified firewood from small producers for a fair price and resells it to customers in the southern city of Valdivia. The enterprise, currently being replicated in 5 other Chilean cities, contributes to the local economy and helps to improve air quality and educate consumers about damage caused by illegally harvested wood. Looking forward, what do you see as the biggest challenge for social enterprise to take off in the region?

Jimena Betancourt: I see three mayor challenges: The first and biggest one is the lack of support and awareness of social enterprise as a financially sustainable tool. The lack of education among the CSO community of social enterprises as self-financing alternatives is something that needs to be seriously addressed.

There is also very little donor funding available for social enterprises in Latin America. Unlike Europe, where the European Union is actively promoting and supporting social enterprises, funding for Latin America seems to be totally off the radar screen of international cooperation assistance and national governments.

Lastly, a major road block is that social enterprise is not integrated into the region’s public policy agenda. Are there any exciting new projects that you’re working on and can tell our readers about?

Jimena Betancourt: We continue to work with the social enterprises we support under the NESsT Venture Fund initiative.

We’re currently running Social Enterprise competitions in five countries simultaneously,expanding the Fund to the Brasilian State of Bahiaand also advancing RAMP in Peru.

Also, in response to the tragic events following the earthquake in Chile, NESsT has established the Levantando Chile Fund to support local Chilean organizations that are channeling assistance to communities on the ground. Levantando Chile will support both immediate assistance and long-term reconstruction efforts in Chile.

Through NESsT Consulting we’re developing consultancy in venture philanthropy for donors and corporations; we’re also developing social enterprises to serve BoP markets and to support the financial sustainability of environmental conservation efforts. We also work on several capacity building projects that have a focus on social enterprise development as self sustainability strategy.

And although NESsT is growing in an organic manner, we don’t to spread our resources too thinly when it comes to broadening our horizons beyond Central and Eastern Europe and Latin America.

In 2007 we added Romania, which is now our biggest program, and we added Brazil and Argentina last year. The goal now will be consolidating and growing our existing markets.