EVPA Research Project

on Impact Strategies Kick-off, 13th March 2018

09:00 – 09.30

WELCOME!

RESEARCH PROJECT | EVPA TEAM

ALESSIA GIANONCELLI

Research Manager

EVPA

PRISCILLA BOIARDI

Knowledge Centre and Policy Director

EVPA

GIANLUCA GAGGIOTTI

Research Intern

EVPA

AGENDA FOR TODAY

09:00-09:30 Welcome, registrations and coffee

09:30-10:00 Introduction to EVPA Research

10:00-10:30 Introduction of the Expert Group

10:30-12:00 Presentation and discussion of EVPA Initial Framework

12:00-13:00 Lunch

13:00-13:30 Presentation of the working groups

13:30-15:00 Break-out discussion in working groups

15:00-15:30 Coffee break

15:30-16:30 Plenary discussion: working groups report back to the plenary

16:30-16:45 Conclusions and next steps

16:45-17:00 Evaluation forms | end of meeting

09:30 – 10.00

INTRODUCTION TO EVPA RESEARCH

DEFINITIONS (1/2)

Venture Philanthropy is a high

engagement and long term

approach to generating societal

impact through

three core practices:

• Tailored financing

• Organisational Support

• Impact measurement and management

DEFINITIONS (2/2)

Venture Philanthropy Organisation/Social Investor – VPO/SI or

VP/SI organisation

An organisation that supports social purpose organisations through grant, debt, equity or hybrid

financial instruments, by providing a range of organisational support and measuring and managing

impact. VPO/SIs include, for example, investment funds, foundations, financial institutions, social

finance intermediaries.

Social Purpose Organisation – SPO

An organisation that operates with the primary aim of achieving measurable social and

environmental impact. Social purpose organisations include charities, non-profit organisations and

social enterprises.

EVPA RESEARCH | OUR LIBRARY AND WHAT’S NEXT

VP/SI industry Key players Best practices

Recently

published

2018

Online data visualisation tool

2016

“The State of VP/SI in

Europe| The EVPA Survey

2015/2016”

More formats to disseminate the 5th IS:

2015

“Corporate

social impact

strategies –

New paths

for

collaborative

growth”

2014

“Social

Impact

Strategies

for Banks”

2017

“Financing for Social

Impact | The Key Role

of Tailored Financing

and Hybrid Finance”

Videos to disseminate the research:

Success Stories

(new website & leaflets)

“VP/SI in Central

Eastern Europe –

Case Studies”

“Impact Management

Principles”

2016

“VP in a Nutshell –

Case Studies and

Good Practices”

Upcoming

initiatives

2018

New 6th EVPA Industry Survey

Update of the dynamic tool (more stats, new

data from IS2018)

2018

One report on PPC

2researches on Corporates

1research on Foundations

2018

New research on Impact Strategies

VP in a Nutshell II (incl. leaflet on TF)

Success Stories Campaign II

New edition of

“Venture Philanthropy

and Social

Impact

Investment –

A practical guide”

EVPA RESEARCH | BEST PRACTICES (1/2)

“A Practical Guide to Measuring and

Managing Impact” (II edition, 2015)

“Impact Measurement in Practice – In-depth

Case Studies” (2016)

“Impact Management Principles” (2017)

Work with GECES and GSG

“A Practical Guide to Adding Value through

non-financial support” (2015)

Collection of practical tools VPO/SIs can use

(available on our website)

“Financing for Social Impact | The Key Role

of Tailored Financing and Hybrid Finance”

(2017)

EVPA RESEARCH | BEST PRACTICES (2/2)

10:00 – 10:30

INTRODUCTION OF THE EXPERT GROUP

EXPERT GROUP | COMPOSITION

• Invited 35 experts (practitioners, academics, consultants) to

participate, 27 confirmed to date.

• Each expert will be assigned to a smaller working group (WG),

aiming for a balanced mix.

• Assignment given to each working group based on three

thematic areas.

EXPERT GROUP | PRESENTATION

• Who are you and where do you work?

• Why are you interested in this research project?

• What is your link to the topic?

10:30 – 12:00

EVPA INITIAL FRAMEWORK

1. Gather Knowledge

Jan –March 2018

2. Engage an Expert Group

Feb –March 2018

3. Kick-off meeting in Brussels

13 March 2018

4. Webinar Series

April 2018

5. 1st Draft Manual

Summer 2018

6. 2nd experts gathering

September 2018

7. Final Draft Manual

September 2018

8. Launch

29-30 Nov at EVPA AC Warsaw

+ Comms & disseminat.

December 2018 + 2019

TIMELINE

EVPA RESEARCH ON IMPACT STRATEGIES | THE PLAN (1/2)

EVPA RESEARCH ON IMPACT STRATEGIES | THE PLAN (2/2)

OBJECTIVES

• Provide EVPA members and the VP/SI sector in general with an in-depth understanding of

VP/SI impact strategies. How do we classify the VP/SI space?

• Develop an in-depth understanding of the role of different VP/SI practitioners with diverse

impact strategies in the VP/SI ecosystem.

• Develop a mapping of EVPA members and VP/SI organisations in general on their impact

strategies, overcoming the distinctions based on legal structure and financial return targets. How

are you engaged as an investor? How serious are you about impact?

• Develop a hands-on manual to help VP/SI organisations develop individual impact strategies

based on sound impact/financial risk/return considerations.

IMPACT STRATEGY

An impact strategy represents the way in which a VP/SI organisation codifies its

own VP/SI activity, both in terms of its position towards impact and vis-à-vis its

financial return objectives.

A PRELIMINARY DEFINITION

PRELIMINARY THEORETICAL FRAMEWORK

0. Starting point: spectra in the VP/SI space

1. VPO/SI’s strategy and goals

2. SPOs / investments

3. Matching matrix

0. Starting point: spectra in the VP/SI space

EVPA SPECTRUM | CLASSIFY THE VP/SI SPACE

BRIDGES VENTURE SPECTRUM (2015)

UK NAB SPECTRUM (2017)

~ Towards a categorisation of impact strategies ~

The valuation process

Choosing the VP/SI organisation’s impact strategy

EVPA VALUATION PROCESS

EVPA BROAD STRATEGIES

VPO/SI only accepts social return, generating financial return is not possible

VPO/SI prioritizes social return, but can also accept financial return

VPO/SI considers social and financial return on equal footing

VPO/SI prioritizes financial return, but also seeks social return

1. VPO/SI’s strategy and goals

Area Summary Questions to be answered

#1

VPO/SI STRATEGY

AND GOALS

Investment strategy/financial and impact

goals/motivations of the VPO/SI to cluster

VP/SI practitioners in the sector. Develop

impact strategies/define the role of capital to

go beyond the dichotomy impact/financial

returns.

How to go beyond the dichotomy impact/financial returns?

What other factors need to be considered? How to include

considerations around investors’ motivations?

How does a complete mapping of the investment strategies

of VPO/SIs look like? Can we incorporate both impact and

financial risk/return considerations into such mapping?

Are there other ways to look at VP/SI practitioners?

What are the constraints that can limit the VPO/SI in its

choice of the best impact strategy?

THEMATIC AREA #1 | QUESTIONS TO BE ANSWERED

EXISTING WORK (1/4)

Source: Tideline (2016),Navigating Impact Investing. The opportunity in impact classes

A social investor may prefer to invest primarly in pioneering efforts that develop new and untested

business models, or alternatively in scaling proven, impactful solutions in more mature markets.

EXISTING WORK (2/4)

Source: Karl H. Ricther (2017) for the OECD

EXISTING WORK (3/4)

Source: NPC and KL Felicitas Foundation (2015), “Investing For Impact: Practical Tools, Lessons, and

Results”, Plum Lomax, Abigail Rotheroe, Peter Harrison-Evans

FACTORING IN THE INVESTOR’S CONTRIBUTION

o Signal that impact matters (values alignment)

o Engage actively

o Grow new or undersupplied capital markets

o Provide flexible capital

EXISTING WORK (4/4)

Source: The Impact Management Project (2017)

2. SPOs / investments

Area Summary Questions to be answered

#2

SPOs / TYPE OF

INVESTMENTS

Identify different clustering options of

SPOs/investment, including business models,

types of beneficiaries, market characteristics,

asset classes, etc.

Can we develop a mapping of investment options?

What are the characteristics of the SPOs to take into account

to map the different investment options? E.g.:

impact goals

beneficiaries targeted

market in which SPOs operate

type of capital needed

type of non-financial support needed

stage of development

business model

legal structure

etc.

THEMATIC AREA #2 | QUESTIONS TO BE ANSWERED

DEFINE THE SPO’s BUSINESS MODEL

Ask the following

question:

“Does a market

(public or private)

exist for the SPO’s

products/services

or activities?”

Source: Gianoncelli, A. and Boiardi, P. (2017), “Financing for Social Impact”. EVPA.

EXISTING WORK (1/4)

Source: Tideline (2016)

Source: The Impact Management Project (2017)

EXISTING WORK (2/4)

EXISTING WORK (3/4)

Source: Tideline (2016)

Source: Karl H. Ricther (2017) for the OECD

EXISTING WORK (4/4)

3. Matching matrix

Area Summary Questions to be answered

#3

MATCHING MATRIX

Combine the VPO/SI’s strategy with

clustering of investments; incorporate the

three core practices of the VP approach (i.e.

tailored financing, impact measurement and

management; non-financial support) into the

matrix .

How can we best combine the VPOs’ strategies with the

SPOs’ clustering?

Can we develop a matrix in which we help investors choose

how to provide tailored financing, non-financial support

and impact measurement & management to their

investees?

THEMATIC AREA #3 | QUESTIONS TO BE ANSWERED

MATCHING THE VPO/SI’s MOTIVATIONS WITH THE SPO’s NEEDS

Source: Gianoncelli, A. and Boiardi, P. (2017), “Financing for Social Impact”. EVPA.

Source: Tideline (2016)

EXISTING WORK (1/6)

Source: Karl H. Richter for the OECD(2017)

EXISTING WORK (2/6)

Source: The Impact Management Project (2017)

EXISTING WORK (3/6)

Source: GIIN (2017)

EXISTING WORK (4/6)

Each theme includes different strategies based on common ways that investors

contribute to social or environmental impacts. The strategies are designed to be

combinable – select one or draw from multiple.

EXISTING WORK (5/6)

Source: https://navigatingimpact.thegiin.org

EXISTING WORK (6/6)

A NEW MATRIX | NEXT STEPS

Tailored Financing Non-financial support

Impact Measurement and Management

COMMON ASPECTS AND LIMITS

COMMON ASPECTS AND LIMITS

• Putting the focus on social impact.

• Helping VP/SI practitioners better allocate their resources according to their

motivations and goals.

• Going beyond the dichotomy and the trade-off between social impact and

financial returns.

• Helping social investors and investment managers to align on potential investors.

• Helping VPO/SIs to match their goals with the goals of SPOs.

• Helping VP/SI practitioners in co-investing.

/!\ However, clustering might hinder innovation in the VP/SI sector

Q&A: PRELIMINARY EXPERTS FEEDBACK

16:30 – 16:45

CONCLUSIONS AND NEXT STEPS

CONCLUSIONS | CLOSING REMARKS

• Closing remarks

• Any additional questions?

1. Gather Knowledge

Jan –March 2018

2. Engage an Expert Group

Feb –March 2018

3. Kick-off meeting in Brussels

13 March 2018

4. Webinar Series

April 2018

5. 1st Draft Manual

Summer 2018

6. 2nd experts gathering

September 2018

7. Final Draft Manual

September 2018

8. Launch

29-30 Nov at EVPA AC Warsaw

+ Comms & disseminat.

December 2018 + 2019

TIMELINE

RESEARCH ON IMPACT STRATEGIES | NEXT STEPS (1/2)

• Organisation of three webinars on:

Wednesday, 18th April 2018 at 15:00-17:00 CEST

Monday, 23rd April 2018 at 15:00-17:00 CEST

Wednesday, 25th April 2018 at 15:00-17:00 CEST

All experts should attend and discuss at every webinar!

RESEARCH ON IMPACT STRATEGIES | NEXT STEPS (2/2)

16:45 – 17.00

EVALUATION FORMS

EVPA KNOWLEDGE CENTRE IS

KINDLY SUPPORTED BY:

THANKS TO OUR SPONSPORS

RUE ROYALE 94 1000 BRUSSELS T +32 2 513 21 31 EVPA.EU.COM info@evpa.eu.com european-venture-philanthropy-association @_EVPA_