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A Call for Philanthropic Risk Capital for Refugees: Lessons Learned from the Social Entrepreneurship at the Margins Accelerator

A Call for Philanthropic Risk Capital for Refugees: Lessons Learned from the Social Entrepreneurship at the Margins Accelerator

SEM Cohort with Thane Kreiner and Marie Haller

SEM Cohort with Thane Kreiner and Marie Haller

Miller Center’s Social Entrepreneurship at the Margins (SEM) accelerator program graduated a cohort of 18 organizations in December 2018 that are all serving and/or led by refugees, migrants, and human trafficking survivors. As we accompanied the entrepreneurs leading these organizations over the past year, we learned more about the needs of social enterprises serving these marginalized communities that were formerly supported solely through humanitarian aid. In order to share our learnings and encourage other stakeholders to join us in this work, Miller Center convened and facilitated a panel at SOCAP 2018, presented at the December 2018 ANDE Network Update, and is now publishing a report, “SOCIAL ENTREPRENEURSHIP AT THE MARGINS Helping Refugees, Migrants, and Human Trafficking Survivors Reclaim Their Futures”.

An important tension that surfaced throughout the SEM accelerator program is the gap between the funding needed by each enterprise to grow its impact and the minimum investment current refugee-focused funders are able to deploy. This disconnect emerged onstage at our SOCAP panel discussion featuring 4 SEM program alumni and 3 funders including Omidyar Network, Open Society Foundation, and KOIS Invest. Experiences of the SEM accelerator social enterprises confirm a gap between what social enterprises in the emergent sector need and what funders seek.

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Impact funds for refugee-focused entrepreneurship are seeking organizations with earned revenue in excess of US$1 million. Our panelists shared that typically seed-stage funding for start-ups comes from friends and family. Many refugee-focused social enterprises haven’t yet attained $1 million in earned income, however, in order to implement their growth strategies, need more funding than can reasonably come from friends and family.

I wondered: how would an entrepreneur who is also a refugee have a network of friends and family with money to fund her start-up? How can entrepreneurs looking to fill in the large gaps left by humanitarian aid change a broken system with only donations from friends and family?

The ideas put forth by Anand Giridharadas in his book Winners Take All, and referenced in his own talk at SOCAP resonate, “I once heard a quote attributed to Archbishop Desmond Tutu addressing a room full of philanthropists, ‘Your job’ he said, ‘is not to make the poor more comfortable in their chains. Your job is to break the chains.’ The question I would ask those of you who seek to change the world through capitalism [...] is whether you are really breaking the chains or making them more comfy?”

This is an essential question for those pledging to fund the creation of new systems that can better support our world’s most vulnerable communities. Is reserving both philanthropic and impact investment capital for only those enterprises that are able to scale to US$1 million of earned revenue really helping change the broken system that is leaving millions of people in refugee camps for decades? Is it even making refugees more comfortable?

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In this same speech, Giridharadas calls on philanthropists to provide the capital to “serve as the start-up incubator for government action [...] test things in the quiet of philanthropy and then seek to mainstream them into our laws and institutions and systems.” Using philanthropic capital to propagate emerging, more socially responsible systems, is not a new idea. Monitor Group and Acumen Fund’s “From Blueprint to Scale - the case for philanthropy in impact investing” talks explicitly about the idea of “enterprise philanthropy” and how, “philanthropy is the essential but often overlooked catalyst that unlocks the impact potential of inclusive business and impact investing.” The urgency and scale of the refugee crisis demands impact capital solutions across the entire spectrum of available options. Philanthropic capital is a key part of the equation, and could be the vehicle that ensures the nascent social enterprise solutions that support refugees are able to flourish and exceed  that magical–some might argue arbitrary–million dollar revenue mark. Natasha Freidus, co-founder of Needslist and a Miller Center SEM program alumni, agrees, “I find it disappointing that philanthropic institutions who frankly, can afford to take the risk, are not investing in early-stage startups or providing philanthropic capital to help cover the 'pioneer gap'."

Miller Center and other stakeholders, such as the Refugee Investment Network, are working diligently to try to connect the seemingly disparate needs of entrepreneurs whose passion is to change a broken system and impact investors who are averse to risking capital in new and untested ways. There is no impact without risk. You can read more about our findings from working with our initial Social Entrepreneurship at the Margins cohort in our report: SOCIAL ENTREPRENEURSHIP AT THE MARGINS Helping Refugees, Migrants, and Human Trafficking Survivors Reclaim Their Futures. We look forward to hearing from you about how we can work together to build new and better systems that allow everyone in our human family to thrive.

 
Social Entrepreneurship at the Margins: Helping Refugees, Migrants, and Human Trafficking Survivors Reclaim Their Futures

Social Entrepreneurship at the Margins: Helping Refugees, Migrants, and Human Trafficking Survivors Reclaim Their Futures

 
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Marie has been working as an educator for 10 years. After discovering the concept of social enterprise in 2012, she has been focused on learning about and supporting the growth of the ecosystem through running various education programs at Impact Hub San Francisco and more recently with Miller Center for Social Entrepreneurship. Inspired by her Miller Center work with maternal and child health organizations in east Africa, Marie has also recently trained and now practices as a birth doula through the SF General Hospital volunteer doula program.

Miller Center’s Top 10 List of 2018

Miller Center’s Top 10 List of 2018

As the end of the year quickly approaches, I look back over these past twelve months and am humbled by our community’s progress and accomplishments. The urgency to advance and accompany the social enterprises that our Global Social Benefit Institute (GSBI®) programs serve was undeniably powerful this year.

I start each day scanning streams of social media and news outlets. This routine has unsuspectingly become my daily dose of hope. There is an abundance of stories that are at once poignant and energizing. One morning I’ll come across an approach developed by a Miller Center GSBI alum to help refugees earn respectable livelihoods, the next day I’ll read a fiery piece from a female-led enterprise that invokes my personal commitment to social impact. One of my favorite parts of my day is sharing these updates across our channels and amplifying the work of our Global Social Benefit Fellows, GSBI alumni, partners, mentors, and my Miller Center colleagues.

As a marketer, I appreciate that these stories–all this “content”–also offers context about you, our readers. With the help of Marketing Associate Alexis Tong, we collected and analyzed a year’s worth of media mentions, website analytics, click-throughs from our bi-monthly newsletters, and social media engagement across Facebook, Twitter, Instagram, and LinkedIn to inform the composition of this Top 10 list. We generated an algorithm that ranked each news story, blog, and social media post to discover which were most engaging.

Serendipitously, this data-derived list authentically aligns with what the team agrees as our 2018 highlights. Here are the results:

10. #MeToo at SOCAP

In October Miller Center joined 20,000 participants at SOCAP (Social Capital Markets)–a gathering of impact investors, entrepreneurs, and cross-sector practitioners focused on increasing the flow of capital toward social good. Our staff and Global Social Benefit Institute (GSBI®) alumni participated on a variety of panels, including Tools for Scaling Social Ventures, Pioneering Social Enterprise Solutions for Refugees and Trafficking Survivors, and Creative Tensions: Investment & Impact. Yet, it was Senior Program Manager Karen Runde’s submission of Collective Voices Beyond #MeToo that was granted both a panel session and a workshop to explore the topic within the social impact ecosystem. The sessions at SOCAP explored restorative justice, the paradox of power, and even inspired this post-event blog by Avary Kent, Founding Executive Director of Conveners.org.

Senior Program Manager Karen Runde introduces panelists participating on Collective Voices Beyond #MeToo Part 2. (Santa Clara University)

Senior Program Manager Karen Runde introduces panelists participating on Collective Voices Beyond #MeToo Part 2. (Santa Clara University)

9. Social Entrepreneurs, Mentors, Impact Investors… Oh My!

In August we welcomed 25 social business leaders, 63 executive mentors, and 18 social enterprises to the Santa Clara University Campus for our GSBI In-Residence accelerator. The gathering is an intensive 10-day convening of changemakers focused on scaling their innovative solutions that address the United Nations Sustainable Development Goals.  Journalist Catherine Cheney of Devex met with a number of entrepreneurs in the cohort at the Investor Showcase and reported [h]ow grants can help for-profits and nonprofits alike fund pathways to scale. Visit our YouTube channel to view the pitches from the showcase.

Miller Center Chief Operating Officer Cassandra Staff hosts the 2018 GSBI In-Residence Accelerator Investor Showcase. (Chuck Barry)

Miller Center Chief Operating Officer Cassandra Staff hosts the 2018 GSBI In-Residence Accelerator Investor Showcase. (Chuck Barry)

8. Mastering Scale Out

Replication can significantly decrease the time and resources spent on getting a social enterprise up and running. In fact, replicated enterprises present reduced risks for impact investors. Associate Director of Replication Neal Harrison’s Scale and Adaption: The Two Sides of Replication and Global Social Benefit Fellow Lauren Oliver’s 5 Lessons Learned from Creating a Sector-Specific Accelerator Program make Miller Center’s Replication Initiative #8 in our Top 10 List of 2018.

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7. From Fellows to Fulbrights and Beyond

The accolades abound in 2018 for Miller Center’s Global Social Benefit Fellows (GSBF). Poets & Quants recognized Haley Harada as one of 2018’s Best & Brightest. Nithya Vemireddy received a William J. Clinton Fellowship for Service in India from the American Indian Foundation. Five of the fellows were awarded Fulbright scholarships, one of whom, Erika Francks was also named a Rhodes Scholar Finalist. However, the GSBF story that took top honors in 2018 was the announcement that Athena Nguyen was not only awarded a Fulbright but was also named Valedictorian for the Class of 2018.

Santa Clara University Undergraduate Commencement, Class of 2018. (Santa Clara University)

6. Alumni in the Headlines

There was an abundance of news and updates from the social enterprises that make up our GSBI alumni network. For the first time, two GSBI alumni made a pivot to partner, forging a stronger path to scale. Vava Coffee, Neopenda, 734 Coffee, and Good Nature Agro were named by Conscious Company as Social Entrepreneurs to Watch in 2018. KadAfrica was one of four winners of the 2018 Roddenberry Prize. Of note, the alumni story that had the greatest reach in 2018 took place just over one week ago on stage in Johannesburg at the Mandela 100 Global Citizen Festival. Recording artist Usher and Cisco CEO Chuck Robbins presented GSBI alumna Wawira Njiru, Founder of Food for Education, with the Youth Leadership Prize and $250,000!

 

5. Bay Area Boost

This summer Miller Center joined forces with Catholic Charities of Santa Clara County to offer a three-day capacity building workshop specifically for social entrepreneurs that are impacting the lives of those in need in the Bay Area. Journalist Heather Adams of the National Catholic Reporter covered the collaboration and Miller Center’s Chief Innovation Officer Pamela Roussos and Catholic Charities of Santa Clara County’s CEO Greg Kepferle wrote this op-ed. "The university brings intellectual capital; Catholic Charities brings social capital," Kepferle said. "Marrying them both helps us address the reality of poverty in innovative ways."

 

4. The Power of Partnership: Addressing Maternal and Child Health

In partnership with GE, Miller Center ran its second cohort of the Healthymagination Mother and Child Program. Eleven social enterprises participated in the program and in March presented to impact investors in Nairobi. One of the eleven cohort participants, doctHERs, connects female doctors in Pakistan to underserved communities such as refugees. doctHERs was in Rome last week as one of the top 13 companies to be recognized by the Laudato Si’ Challenge.  

 
Robert Wells, Executive Director, New Growth Markets and Business Innovations at GE featured on CNBC Africa.

Robert Wells, Executive Director, New Growth Markets and Business Innovations at GE featured on CNBC Africa.

 


3. Ending Poverty Takes Energy

There are 1.2 billion people worldwide who have little or no access to electricity. This lack of access perpetuates a poverty trap and that’s why we are so focused on accompanying social entrepreneurs who make clean energy affordable and available.  Energy Access India was a program run by Miller Center and New Ventures from 2015 to 2018, with the support of USAID, which helped 30 renewable energy companies raise $40 million of investment and provide clean energy to over 2.5 million Indians through a customized capacity development and investment facilitation program. Andrew Lieberman, Miller Center’s Senior Director of New Programs, together with Colm Fay of William Davidson Institute at the University of Michigan, and Mark Correnti of Shine Campaign, published the research paper Closing the Circuit: Accelerating Clean Energy Investment in India.

The report analyzes business models and strategies, identifies barriers, and offers actionable recommendations.

The report analyzes business models and strategies, identifies barriers, and offers actionable recommendations.


2. Impact Investing: Positioned to Accelerate Impact

It may come as no surprise that the blog most read in 2018 was The Justifiable Ask: Realities of Raising Impact Capital written by GSBI Funding Facilitation Lead Anastasiya Litvinova. Lack of capital can be the biggest obstacle to growth. Bringing on the right investors can be course defining. Case in point is Miller Center GSBI alum Husk Power Systems–raising $20 million in equity investment in January, making it one of the largest investments in the mini-grid sector.

GSBI alum Husk Power Systems closed $20 million in funding in January 2018. (Husk Power Systems)

GSBI alum Husk Power Systems closed $20 million in funding in January 2018. (Husk Power Systems)

1. Accelerating Solutions At The Margins

Miller Center launched an experimental cohort named Social Entrepreneurship at the Margins (SEM) in January: could the lives of refugees, migrants, or human trafficking survivors be improved at scale through social entrepreneurship? In his blog Mobilizing for Migrants, Refugees, and Slaves, Miller Center Executive Director Thane Kreiner wrote about the third Vatican impact investing conference that convened in July. It sought to mobilize capital to address pressing, interconnected, global problems, including migrants and refugees. Of the final 13 winners of the 2018 Laudato Si’ Challenge, four are Miller Center alumni, three of which are from the SEM cohort (Five One Labs, Leaf Global Fintech, and Workaround).  From the accolades and media coverage surrounding the cohort to growing commitment to unlock the power of refugees, the 18 social enterprises that made up the SEM cohort captured our attention throughout the year and tops our list for 2018.

 

ABOUT THE AUTHOR

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Karen Paculba had the privilege of serving Miller Center in 2018 as its Senior Marketing Manager. With an eye for the nitty gritty and a natural curiosity for the big picture, Karen enjoyed the breadth of programs and sectors supported by Miller Center accelerator programs. Karen is continuing her career at Santa Clara University and will kick off 2019 as the University’s Director of Social and Digital Strategy.

Banner/thumbnail image photo credit: Instagram/Wawira Njiru

Seeking innovators supporting the marginalized 

Seeking innovators supporting the marginalized 

a message from Mark Correnti, Director of Impact Investing at Miller Center for Social Entrepreneurship

I am writing to you from Cebu in the Philippines. I was invited to give a talk entitled, Leading the Innovation Challenge to Address the Needs of the Marginalized Through Social Entrepreneurship and Impact Investing for a business conference sponsored by the University of San Carlos. The trip afforded me air time to finish reading two books by Alexander Betts from the Refugee Studies Centre at Oxford University entitled Refuge: Rethinking Refugee Policy in a Changing World and Refugee Economies: Forced Displacement and Development. Last month, Miller Center for Social Entrepreneurship announced a new accelerator cohort, Social Entrepreneurship at the Margins (SEM) focusing on migrants, refugees, and survivors of trafficking. In short, from Betts’s writings and our experiences at Miller Center, a solution set emerges to address the challenges and needs of the most marginalized and vulnerable.

This enterprise-level, bottom-up approach includes:

1. incorporating newer development practices to compliment a historically humanitarian-only lens

2. shared space for both refugees and citizens of host (haven) countries

3. the potential for private investment in special economic zones, and

4. the building blocks for all of the above, the social enterprise

Per Betts, “Gradually, UNHCR’s view of the roles of the private sector has become increasingly nuanced. It has started to recognize a range of ways in which business can play a role in humanitarian assistance, including through social enterprise….”

Less than 1% of forcible displaced people (refugees and internally displaced populations) obtain resettlement. While each emergency context is different, the vast majority of refugees don’t remain in camps but migrate to nearby peri-urban slums and forego further international assistance. Of those who do remain in settlements, 50% live there protractedly, as defined as 5 years or more. Most countries either do not allow or heavily restrict refugee employment and freedom of movement. Per UNHCR, the UN Refugee Agency, “In such [protracted] situations refugees, in particular women and children, become more vulnerable to various forms of exploitation such as trafficking and forced recruitment...which can lead to security and stability problems for the host state....”

Just 10 countries host 60% of the world’s unsettled refugees. Most of these haven countries are in the developing world, lack the necessary resources to support large population influxes, and in many cases, have not signed on to the 1951 Convention Relating to the Status of Refugees. $75 billion a year is spent on the 1% that are resettled (or asylum seekers), versus just $15 billion on the unsettled. For every $135 dollars spent on a resettled refugee in Europe, $1 dollar is spent per refugee in the developing world. Resettled refugees also receive the vast majority of media coverage. Therefore, it is imperative that we support social enterprises and restore autonomy and dignity to those so marginalized.

Let’s take a brief look at the Syrian situation. A total of 11 million people are displaced, of which 4 million are refugees. Of these 4 million, less than 3% have been resettled and only 9% live in camps receiving international assistance. The remaining have moved to peri-urban slums seeking informal employment in informal markets to start enterprises. Found within the resettled 3% are half of all Syrians (in-country or refugee) with university degrees and about a quarter of those with secondary education. According to UNHCR, refugee education is a host country’s responsibility. At Miller Center, we have worked with a number of social enterprises whose impact models (energy access, last mile distribution, healthcare, artisanal and education) target individuals living within some of the world’s largest slums.

The benefits of our new accelerator cohort, Social Entrepreneurship at the Margins (SEM), include

All of the above is at no cost to the social entrepreneur. Applications are due by March 16th.

SEM has two primary goals. First and foremost, acceleration of individual enterprises and their respective impacts. This acceleration can be attributed to Miller Center’s theory of change and framework that includes improving an enterprise’s impact model, business model, operations, scalability, and, finally, “justifiable ask” to help acquire the appropriate capital to fuel impact. Second, assisting in the building of an ecosphere at the base of the pyramid for support of social enterprises by bringing together key stakeholders, funders and investors.

Most refugees face displacement due to conflict. But climate change is becoming an ever-increasing factor. It is important that we improve climate resilience within vulnerable populations. In 2017 alone, 1 million Somalians were displaced due to severe draught.

When taking into account restrictions on employment and movement, the quality of living conditions within camps and peri-urban slums, actual money and resources spent on unsettled refugees, and most importantly, security for women and children, a bottom-up enterprise-level approach is required. For those who have considered funding investments within these highly marginalized settings but have yet to identify specific opportunities, we hope this cohort of deserving social enterprises is the beginning of your support.

You can join us in this collaborative effort by sharing this information with social enterprises serving the marginalized and encourage them to take a look at our program. We will keep you updated on our progress.