Change Magazine July 2017 issue - Page 10

Building an effective partner- ship is challenging. First of all, you need to identify the right partner. Someone with a big name may not necessarily be the best match. Finding the right people means knowing your own strengths and weak- nesses. The partner can come from other sectors. For exam- ple, if you are a grassroots or- ganization working to bring solar panels to a community. Your strength is that you have access to the target market while your weakness is that you do not have the technolo- gy. Your potential partner may be a solar energy firm. In any case, a successful partnership needs to be mutually beneficial to the partners involved. Revenue Streams The fundamental difference between a social enterprise and a non-profit organization is that the former needs to main- tain financial sustainability. This means that it cannot rely on donations or grants (except for at the beginning phase) and has to sell at some point. Ac- cording to the social enterprise certification standard in Hong Kong, by the end of its 3rd year of establishment, an organi- zation with at least 50% of its budget coming from revenues, and at the same time is creating measurable and direct social impacts, will be considered a qualified social enterprise. Similar to charity, social en- terprise put “the bottom of the (wealth) pyramid (BOP)” in the center of their mission. Usually, it is much harder to sell products or services to this group and most probably would require “reinventing” the revenue model. For exam- ple, instead of selling a prod- uct, it may be better to rent it because the BOP population has limited cash flow. Instead of transporting resources com- ing from the outside to tar- get communities, discovering available resources and skills within these communities may be an option. However, it is necessary to “sell” eventually. This will not apply to all social issues (like severe disease), but it would be helpful to most of them. “Bottom of the (wealth) pyramid (BOP)” is the demographic group earning less than 2 USD a day. Impact investing: from “1” to “100” If you have passed the start- up phase mentioned above, you now have a promising social en- terprise with revenues. At this point, you may find out that compared to commercial activ- ities, you are earning revenues a bit slower and having difficulties 7 to scale up. A small amount of grants or donations can no longer meet your needs. This is where impact investing comes in. still remains an emerging in- dustry. Impact investments, as defined by the Global Impact Investing Network (GIIN), are investments made into compa- nies, organizations, and funds The term “impact investing” with the intention to generate dates back to 2008. Today, it social and environ