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An edited presentation to GIBS (Gordon Institute of Business Science on Heart's model of social enterprise incubation and blended value proposition funds.
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Heart and the Blended Value Proposition
04 June 2009
INTRODUCTION | Today’s discussion
Introduction The Heart space from a SE perspective Blended value
What is Heart Fund Management Incubation Consulting Advisory Activation
Case Studies
Questions
INTRODUCTION | The Heart Space
Social ValueFinancial Value
CorporatesNGOs
INTRODUCTION | The Heart Space
Financial Value
Social ValueSocial Value
Financial Value
High
High
Low
Low
Social Capital Investments(Social Returns)
Social Capital Investments(Social Returns)
Financial Investments (Numeric returns)
Financial Investments (Numeric returns)
TRADITIONAL MODEL
INTRODUCTION | The Heart Space
TRADITIONAL MODEL
CauseCauseDonorDonor
Public Donations:
R17 billion in 2007
CSI R4.3 billion
Outcome: Maintenance
Outcome: Maintenance
Donors give money
Charities spend it & come back for more
Never Ending CycleNever Ending Cycle
INTRODUCTION | The Heart Space
DonorDonorSocial EnterpriseSocial Enterprise
Redirect a portion of charitable
contributions to Social Enterprise
Outcome: Sustainability
Outcome: Sustainability
Donors invest money
Funding problem eliminated
permanently
CauseCause
HEART MODEL
INTRODUCTION | The Heart Space
Social Value Financial Value
NGOs CorporatesSocial Enterprise
Do-gooder, whole wheat sandal, hippy, bunny huggers
Money grabbing, bottom line junky, capitalist, evil doers
A gap in the market and a market in the gap
HEART MODEL
INTRODUCTION | Blended Value
Economic Value
Social ValueSocial Value
Economic Value
High
High
Low
Low
Maximized Social & Financial
Returns
Maximized Social & Financial
Returns
INTRODUCTION | Blended Value
Seed FundingSeed Funding
Start Up FundingStart Up Funding
Secondary FundingSecondary Funding
Mainstream Funding
Mainstream Funding
Traditional phases of Entrepreneurship
Traditional phases of Social Entrepreneurship
?
INTRODUCTION | Blended Value
The social enterprise spectrum: philanthropy to commerce – Harvard business school
What is Heart?
04 June 2009
WHAT IS HEART | Intro
Heart,
transforming quality of life by creating,
incubating and
establishing
social enterprises that work long term.
WHAT IS HEART | Intro
It is our vision and vocation to bring about social transformation by creating
sustainable social enterprises
market-based solutions to
social problems
We are the nexus between social entrepreneurs needing capital and support
to develop their social enterprises, and social investors seeking financial and social returns.
WHAT IS HEART | Fund Management
1. Originate Heart Seed Fund
Features:
•Money Back Plus
•2 Year deferred loan capital
•2 year investment term for 50 investors maximum (purchased in lots)
•R20 000 per lot
•R1 million cap
•Employed to establish market readiness of 6 SEs (maximum) = 135K per project
•Venture Funds repay loan
WHAT IS HEART | Fund Management
1. Originate
2. Incubate
Heart Seed Fund
Heart Venture Fund
Features:
•Money Back Plus
•3 Year deferred loan capital
•4 year investment term for 50 investors maximum (purchased in lots)
•R50 000 per lot per annum for 2 years
•R5 million cap
•Employed to incubate 8 SEs (minimum)
•Heart Capital Fund repays loan
WHAT IS HEART | Fund Management
1. Originate
2. Incubate
3. Capacitate
Heart Seed Fund
Heart Venture Fund
Heart Capital Fund
Features:
•Money Back Plus
•3 Year deferred loan capital
•7 year investment term for 200 investors
•R50 000 per lot per annum for 3 years
•R30 million cap
•Employed to capacitate 8 SEs (maximum) for 3 years
•SEs repay loan
WHAT IS HEART | Incubation
Social Value Financial Value
1. Originate
2. Incubate
3. Activate
4. Replicate
WHAT IS HEART | Consulting
Intervention •Social Enterprise development
•Leader brand strategy
•CSI strategy, training, outsourcing
•Staff volunteering programmes
•Transformation strategy alignment and benchmark tracking
•Social communications strategy Pam Golding Properties
Media24
Lewis GroupSmit Marine
Bio Oil
Earthchild Clothing
FrikaPlatypus
Productions
WHAT IS HEART | Advisory
Cause –Related Funds Heart Venture Clubs
Engaged Philanthropy Venture Philanthropy
Charitable Contributions Fund, Heart Seed Fund; Heart Venture Fund; Heart Capital Fund
Charity Wines Venture Club; FoodTent Venture Club; Adrenalize Venture Club, etc
Case Studies
04 June 2009
CASE STUDIES | Second Harvest
Sponsors: Lewis
Roll Out: Based in Langa & Bellville – replicable model
Sustainability: R8 per packet
Projected Income: 30 000 packets per month = R240,000
Second HarvestSecond Harvest
Farmers plough about 20% of their crops back into the ground because the vegetables are not market quality. We approach farmers to let us harvest this produce – a second harvest. These vegetables
are cooked into nutritious stews, which are packaged into 1,2kg plastic bags and frozen. 1 bag feeds 8 - 12 children
CASE STUDIES | Wines with Heart
Sponsors: KWV, Distell + 52 wine farms
Roll Out: Based in Stellenbosch, provides national delivery
Sustainability: R250 per box
Every month more than 50 of South Africa’s leading wine farms donate their products to Charity Wines. These wines are packaged into a Mystery Box and sold to consumers for R250. Proceeds from sales are invested into
NGOs with a Fetal Alcohol Syndrome or Severe Learning Disability focus. Our goal is to eliminate their need to fund raise within 3 years.
CASE STUDIES | Wines with Heart
THANK YOU!!
