The Critical Role of Impact Ventures in Achieving the SDGs by 2030
by Marielle Bordado
“The social enterprise model is a key driver in achieving the goals by 2030 because we’re really far [from achieving them]. ”
The Innovation for Social Impact Partnership (ISIP) project employs three key strategies to support social enterprises in the Philippines and to collectively contribute to the achievement of the Sustainable Development Goals (SDGs). Education is a key component in achieving ISIP’s goal. Through the Education strategy, ISIP aims to build a sustainable stream of social enterprises (SEs) in the country by developing the entrepreneurship capacities of students and faculty in universities and higher education institutions (HEIs).
Aside from training and other capacity building activities that support faculty and students in the classroom teaching such as Technopreneurship 101, ISIP recognizes the crucial role of university-based incubators in producing innovations and supporting budding social enterprises. These incubators are venues for social enterprises to build and grow their business, so it is essential that they are provided relevant support and guidance.
In 2018, ISIP conducted a training for HEIs which aims to provide participants a deeper understanding of the entrepreneurship journey, enhancing their capacity to better plan and manage their respective Incubators and manage their startup incubatees. However, a gap has been identified in terms of impact awareness among incubator personnel and the enterprises they incubate. There is also no clear way of measuring and linking the incubator’s direct contribution to the university’s mission.
On January 29 to 31, ISIP brought together the managers of university-based incubators from all over the Philippines. The ISIP Social Impact Management Workshop aims to provide support and training to incubators on social impact management, enabling universities to better identify and measure their impact. The activity was in partnership with Business Call to Action (BCtA) which provided the impact management tools and frameworks that the participants can use. Launched at the United Nations in 2008, Business Call to Action (BCtA) aims to accelerate progress towards the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that engage people at the base of the economic pyramid (BoP). Pedro Cortez, BCtA’s Impact Specialist, facilitated the three-day workshop.
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Incubator Managers from 17 university-based incubators worked with the SE Founders of the ISIP Social Impact Accelerator Batch 2 in creating an Impact Value Chain and an Impact Management framework for their respective social enterprises. An Impact Value Chain is a tool used by an organization to illustrate how their activities lead and contribute to their desired impact, allowing them to manage and track their impact properly. On the last day, the SE Founders had a one-on-one consultation with Pedro Cortez to present their outputs and discuss other aspects in their business that are related to Impact Management and Measurement.
“It’s good to see how the notion of impact or the idea of creating impact is something that is cross border. From what I perceived before, this idea was coming more from high income countries where they develop their own operations. But I like to see coming to the Southeast Asia (SEA) context that some organizations start by thinking that they want to tackle a social need and create impact, then eventually they develop a business that guarantees that, ” shared Pedro Cortez.
The main challenge to the Incubator Managers was to create an appreciation on how they can apply Impact Management in their incubator operations and on how they support SEs. ISIP capitalized on diversity and collaboration to help participants gain an in-depth understanding of how the Impact Management Framework functions in helping SEs.
“In the previous ISIP training, we were all from the academic community. It’s different when there is diversity. Participants bring in different experiences and knowledge, so you learn more”
“The Impact Value Chain, particularly identifying indicators for each [of our] goals as an organization, really helped. It became easier to identify what activities social enterprises need to conduct in order to meet their goals. It became clear when we created the Impact Value Chain”
The participating SE Founders also shared their experiences working with people outside their organization in crafting their impact value chain and identifying goals of their organizations.
Tom Graham of MAD Travel shared how working with the Incubator Managers helped MAD in terms of identifying SDGs to prioritize. “It was quite eye-opening for me. Discussing the impact value chain with other people enabled me to get more clarity on which SDGs we should be addressing and in what order. I think it was a combination of getting other people’s insights and being forced to reflect to be able to have that clarity that we didn’t have coming into this workshop,” he said.
On the other hand, SEs like Magwayen and HiGi Energy really found it helpful that their co-participants had various strengths to contribute. They also highlighted the added value of feedback coming from different viewpoints.
“Mixing us with incubator managers from different universities was very helpful. It was eye- opening for us because of the input and new perspective from fresh eyes since we’ve been doing this for a long time already,” said Maffy Tamayo of Magwayen.
“Each of them has different expertise, like Ms. Gladys of Saint Louis University (SLU) is an expert on policy. She told us about her plans in terms of sustainability. We are thinking of a possible long-term collaboration with them,” adds Hazel Pajotagana of HiGi.
The Importance of Impact Measurement
“There is nothing wrong with generating profit or revenue while tackling a social need.” During the workshop, Pedro highlights the essence of tracking the social impact of SEs. For him, the advantage that SEs offer is that it provides organizations and local communities to have ownership of their business and tackle community needs that they know better than anyone else.
Incubator Managers also viewed this opportunity to use Impact Measurement as leverage to encourage and support their startups to become social enterprises creating impact in the community. Other universities also identified other applications for the framework beyond their incubators.
“It’s good to know how to manage and monitor impact as an incubator because we also want to know if we are effective as an incubator. If our incubatees are able to achieve their impact goals during their period of incubation or acceleration, then maybe we can also say that we are effective and we’re happy that we are able to support them”
“The training that we have will be very helpful to us, even in our other activities for example in [classroom] instruction. In outcomes-based education, we are also into impact so it’s not only in the TechHub that we will be applying this but we are also going to apply this in other activities like instruction which is trying to evaluate the impact to the lives of our students”
“From a pedagogical perspective, I am learning from looking at the Impact Value Chain from the lens of the SE. For me, I cannot see it yet in the incubator but in the long run, when you really understand the Impact Value Chain, you can always translate it in terms of evaluating also you Impact Value Chains as a TBI. If you look at all the processes in the world, it’s impossible not to be part of a supply chain”
One of ISIP’s main goal is to address the investment gap for SEs in the Philippines, providing channels for SEs to access financing from funders including impact investors. SEs of the ISIP Social Impact Accelerator Batch 2 shared how they think Impact Measurement will help get them funded.
“We are [currently] talking to impact investors and they have posed [us] that question. We had difficulty answering it. But right now, with the tools and the framework, we’ll be able to answer their questions more confidently,” said Czar Carbonel of Magwayen.
“Impact investors look at the impact side, so they want to see the concrete impact we are making. If we are able to map out our impact clearly then we can better present this to them and they will see the value of it,” added Hazel Pajotagana of HiGi.
Tech and Social Linkage
With most of the participants coming from incubators and TechHubs, certain gaps were identified in terms of integrating social impact into the startups they are currently incubating. This is one of the things that the workshop aims to address, to provide a clear distinction on what it means to be an impact venture and how this can apply even to technology-based startups emerging in their universities.
“It’s quite interesting with our university because we are a Catholic university, so there is always the social engagement arm. It’s an interesting tool [impact management tool] to bridge us working in the technology side and the social engagement side. It creates that bridge so that we can work together and have a common goal”
“Sometimes you think that tech-based startups are not SEs, but it’s just how you frame the startup. Maybe there is just no emphasis, but it actually has a social impact. They need to understand what they are doing and the impact of their startup so that we will see that it is a social enterprise,” said Richard Esguerra of BatStateU
For Dr. Gladys Navarro, technology justice means addressing injustices like poverty with the use of technology “The gap that I see in terms of moving forward with meaningful research and making lives better, is they do not have a good grasp of the SDGs. I talk to the students about the SDGs and connect it with Engineering. They have that eureka feeling resulting in a research agenda which is technology justice,” she said.
However, there are also pain points and challenges inherent to running a social business, Pedro Cortez points out, “Investors are still quite afraid of the word social because social means no money being made and that’s exactly what social enterprises are trying to prove wrong.”
Dr. Gladys Navarro added that SEs also experience challenges even as it grows based on her experience working with HiGi during the workshop. “One of the lessons that really stroked me based on my observation is that eventually an SE will have to make difficult choices. This actually happened to HiGi since they make use of hyacinth as major input for the [charcoal] briquettes then they suddenly shifted to coconut because they were trying to minimize cost. This is where you see the shift in mindset from being an SE to an enterprise. This is the dilemma of the SE, how do you address that shifting mindset when it comes to crunch time?”
For some SEs, the challenges can also become potential opportunities “One surprising thing we learned from FHMoms is that they were able to establish a social enterprise with the use of Facebook groups and with the tools available. Even if they are just in the Minimum Viable Product stage, you can really see that there is a market for it. They may be small, but they are already making an impact, using less resources,” shared Richard Esguerra.
The Role of SEs in the Decade of Action
As we welcome the Decade of Action, we reflect on how far we’ve come along and if we are closer to the goal of empowering SEs to collectively contribute to the achievement of the SDGs. While the 2019 UN Development Goals report shows significant progress in critical areas, there are still areas that need urgent collective action if we are to achieve these goals by 2030. This means that there is a need to accelerate action being made to meet the scale and speed required.
The Decade of Action calls for accelerating sustainable solutions to all the world’s biggest challenges — ranging from poverty and gender to climate change, inequality and closing the finance gap.-UN
“Integrating the SDGs is essential because it’s not only the goal of the UN, or the goal of our country in further developing the nation. It’s everyone’s responsibility. I think being aware of these goals and aligning to them gives us a definite pathway so that we can target what needs to be done and we can set our priorities straight”
So how do SEs contribute in accelerating the achievement of the SDGs?
Pedro Cortez explains “Social enterprises are still a relatively new model, at least in the development perspective, so things haven’t been really working out as much as we wanted since we launched the SDGs almost 5 years ago. So why not test this model that has plenty of evidence that proves that they can be successful. There should be a big contribution that comes from the private sector in terms of achieving the SDGs and I think the last couple of years, different stakeholders have been realizing that in terms of tracking investment from the private sector to the achievement of the SDGs. The SDGs were built with many different types of stakeholders and everyone should be accountable to them.”
Social enterprises play a key role in achieving inclusive economic growth while at the same time effecting social change. Aside from providing opportunities, the primary impact goals of SEs align to the SDGS. Therefore, enabling these SES to achieve their impact goals means enabling the achievement of the SDGS. Scaling the impact of these SEs will benefit multitudes of stakeholders from various groups and levels.
“I think going through the workshop and the measurement tools we were introduced to enabled us to refine what impacts we’re trying to have and be able to present to investors a clearer vision of the change we want to see in the world through the business model that we have,” shared Tom Graham of MAD Travel.
“We adopted a new SDG No. 13: Climate Action, which is highly valuable to professional investors,” added Dan Layug of PeoplePods.This is in addition to the current SDGs they are trying to achieve which are SDG 11: Sustainable Cities and Communities and SDG 5: Gender Equality.
“If you're really serious about helping your market, it's not enough to know that you are helping hundreds of thousands of people. It has to be documented for it to be valid and measurable,” said MK Bertulfo of FHMoms.
“Of course, this is a very small sample of what the Philippine Social Enterprise ecosystem might look like but if I base it on these five social enterprises that I had the chance to interact with, I would say that you are on a very good path,” shared Pedro Cortez.
Dr. Gladys Navarro sums up the importance of collective action in achieving the goals. “You have to look at the synergy, which is the essence of an ecosystem.”
Dr. Gladys elaborates on the role of TBIs in this ecosystem. “For me, the role of a business incubator, that is why it is subsidized in the first place, is to pursue those who are at the margins of the society. Those who are underserved are the very clients that we need to serve.”
A lot of work must be done collectively but it seems there is a reason to be hopeful. Achieving the SDGs seem daunting but there is a lot of reason to be hopeful and keep us moving as we enter the Decade of Action. As Pedro observes: “It’s great to see this fire, this vision and motivation with the upcoming generation in wanting to change things that maybe some of the world leaders have been refraining to change, to not lose hope at a time when it’s easy to lose hope. Instead of giving up and throwing the towel to the floor, [but] to come up with their own solutions and ideas that will tackle something that they just think there’s potential to do things in a different way.”
“It’s great to see this fire, this vision and motivation with the upcoming generation in wanting to change things that maybe some of the world leaders have been refraining to change”