The YCAB Foundation has been a critical part of the philanthropy and social investment landscape in Indonesia for the last two decades. At the recent AVPN Conference in Bali, Alliance spoke to Veronica Colondam, YCAB’s founder and her daughter, Adelline Odelia Tanuri, its secretary-general about its origins, its growth, its approach to impact investing and their own views on the future of giving in the region.

Andrew Milner: Veronica, can you tell me a little bit about how and why YCAB started? What was the need and what was its purpose? 

Veronica Colondam, YCAB Foundation Founder

VC: We wanted to just serve the Indonesian Urban poor communities and we started with the youth; education, life skills, vocational skills and so on but we found that two to three years into the programme that we run in schools, Indonesia was still facing millions of dropouts. So then we started helping them to get opportunities, come back to school and there’s a government acceleration learning pathway, and we set up learning centres. But then in time, we realised that it was an 80 cents per month education, but people were still dropping out of our programme. Why? Because going to school every day, it’s costing them transport and meals so probably ten times the money for schooling itself, so they drop out again. We realised this is not an education problem, it’s an economic problem. Around that time, Adelle had to do a community development programme at school and I chaperoned her group on what turned out to be a field trip to understand how microfinance is done. So, I went and I was inspired and I realised that the intervention of just 100 dollars can really change lives and actually double or triple people’s daily income. So I thought: let’s do this. This is powerful, it’s empowering and enabling education.

So you moved away from education…

VC: To economic empowerment, yes! We began with a cooperative structure but because of regulations in Indonesia, we moved into a venture structure. Later, we decided we needed to help micro-businesses we were lending to scale. We ended up with a two-entity kind of social enterprise with the foundation owning its ventures. From there, we got into impact investing, so because of regulation, we found ourselves working right across this whole continuum of capital, from philanthropy to impact. 

Adelle, what is the take-up of impact investing in Indonesia? Is it very popular or is it still in its early stages?

Adelline Odelia Tanuri, YCAB Foundation Secretary-General

AT: It’s definitely growing. My first time hearing about impact investing was freshman year of university, which was eight years ago, and I think a lot of people started to have conversations then, though there wasn’t a lot heard about impact investing here, but now in Jakarta, I see a lot more conversations and public forums about it, so I think the raising awareness part has happened. The next step is people not only being aware of it, but actually wanting to do it, and I think is the stage we’re in right now. 

So, how important is your impact investing as a sort of model?

AT: I think it’s very important because YCAB has always been at the forefront of social entrepreneurship innovation, 20 years ago, before anybody was talking about combining impact and business. Our foundations are supported by businesses, so I thought it was a natural progression for us to start doing impact investing seriously. When we launched the IWEF, the Indonesian Women Empowerment Fund, which is going to be our first gender-lens fund, where we invest in early-stage tech companies led by women or who are women-serving, it was under the same philosophy as microfinance. The belief has always been in the power of women entrepreneurs. In microfinance, we were able to capture really ultra micro-entrepreneurs, but with impact investments, we will capture different segments of women entrepreneurs, maybe the more middle-high income,  and we can finance them sometimes through a debt instrument, but also through equity investments.

How much of your portfolio is in impact investing?

AT: YCAB Ventures is fully in impact investing, but we have two different types, the fund where it’s pure impact investments, and then other businesses, that we think align with our vision.

What is the main challenge for Indonesia and how can philanthropy and social investing help?

VC: Regulation. We need to educate the Indonesian SEC on the concept of social enterprise. At the moment, we have to show profits to pay tax, otherwise, they’re going to be on our back. I’ve been working for five years to try to bring the social entrepreneurship terminology into the landscape of national entrepreneurship. At least now we have the presidential decree with the criteria for social entrepreneurship under the national entrepreneurship umbrella. So that’s progress but we have to keep educating and advocating for this with the regulators so we can all understand what it is we need to amend in our regulations so we can give support to social enterprise in Indonesia,

Thinking about Indonesian society, what are the main problems do you think? What can philanthropy do, or social investment do, to help those?

VC:  I think impact investment can really support sectors that would not otherwise get funding. Vocational education is very expensive and the economic access to capital for education is a huge, huge problem. The other hat that I’m wearing, I’m on the supervisory board of a state-owned company, which is the biggest microfinance operation in any country with 12 million borrowers. We still want to grow to 30 million because what matters is to bring people from the ultra micro level to being small business owners who are bankable. We’re now doing a piece of research with J-PAL to look at how digital money can help alleviate poverty. The preliminary pilot study is saying that the ecosystem is not ready. We’re still a cash-based society so access to capital is a major issue. Girls’ empowerment is another issue and that’s grown since Covid.

Adelle, you’ve got the Rahasia Gadis programme. Is that something that’s come about since Covid?

AT: It’s something I’ve taken seriously since Covid. Basically, Rahasia Gadis is the largest platform for girls focused on mental health and financial freedom in Indonesia. We have a platform called the Confession Room where every day hundreds of girls come to tell their stories – about their heartbreak, about friendship which leads to their issues with body and security, mental health, depression, sexual harassment, suicide and so on.  When we first launched the Confession Room after the pandemic, we immediately got tens of thousands of stories which was an indicator of how big a need there is in Indonesia for young girls to have a safe space to tell their stories in what is still a very conservative, very traditional country. They have questions that are unanswered about their bodies, about their relationships, and they just need a support system. They can come to us and talk to us. We have counselling, we have telecounselling, we have chats, but we also educate girls to become leaders, because I feel like while it’s important for us to provide support,  it’s more important for girls to be able to empower themselves and to support others in their local communities because the need is very big. We’re just focusing on one centralised community platform and you won’t be able to reach people in the rural areas. And so, we have a leadership programme where we select girls, give them training and mentoring so they’re able to create their own groups, which we call clubs.

What’s been the take-up?

AT: It’s been really good. I’ve always wanted to merge social impact and business and for a long time, a lot of really deep and great social impact work has been done through philanthropy and while businesses have a lot of resources, their missions are not aligned, they don’t have the incentive to pursue impact. But with Rahasia Gadis I think we found a social enterprise model that actually requires you to take care of the girls, to empower them, to monitor them and to train them in order for your business to survive. So, the growth of the business has to be in line with the growth of the impact, which I think has been a huge struggle for a lot of social enterprises in Asia where the scalability of their business model is limiting. That’s why there’s a huge gap in the VC world where there are a lot of impact investors, but social enterprises are unable to scale in the way they need to because of the lack of human resources. I think there’s a lot of education that needs to take place about why this is important.  But so far, with Rahasia Gadis, I’m really happy because this year, bigger global brands are working with us like Facebook and Maybelline because, since the pandemic, a lot of global companies realise that mental health is a huge issue, women’s empowerment is a huge issue, taking care of families, and relationships is a big issue. I think we were helped by the loneliness of the pandemic.

So nobody else is doing this?

AT: There are communities that mostly work in siloes. So there are mental health communities, there are women entrepreneurship communities, there are sexual harassment communities, but what we do is we are quite general that we welcome everybody in and they find their own home. Digitisation has become important, too. We help them create marketing campaigns. During the pandemic, they were saying  ‘I have this marketing budget, I can’t pick events, I can’t do anything. How do I actually market?’ That’s when they realise the role of digital communities. And we’re quite professional because we’re part of a bigger digital agency, so we have the resources to help them.

As was mentioned in the conference, there’s a big generational wealth transfer coming in Asia.  How will the next generation do things differently from their parents do you think? 

AT: I think there’s going to be a huge difference. I’ve met a lot of people my age, 25 to 27, who have said, ‘I’m doing something similar to you but my parents are against me,’ so I think there’s a lot of push from the younger generation to convert old business practices, or at least to implement sustainability policies, but I think right now the biggest challenge is that there are so many systems and structures already in place and it’s about convincing the people who’ve worked in the companies and organisations for years that this isn’t just a fun side-project, this is actually good for the company, it will help with profitability. So in Asia, a lot of the biggest families are telling their parents, ‘I don’t want to work with you unless you have ESG or a sustainability policy, or I will work with you but only on the sustainability part.’ It’s exciting because once the bigger families and the bigger conglomerates make that change, it will flow downstream.

What do you think is going to stimulate philanthropy? Do you think more young people will get into doing philanthropy rather than moving into the family business?

VC: In Indonesia, philanthropy is not like you understand in the West. There’s no tax deduction on giving and only public listed companies can actually write off their giving as a cost. Other companies have to take it from their profit. There’s a CSR law, not really enforced, which encourages companies to put 2 per cent of their profit towards CSR, and a lot of that money goes into creating their own operating foundation and they generally restrict those operations to the community they live or work in.

AT: Did you know Indonesia is actually ranked one of the most generous countries?

It was top of the CAF World Giving Index

AT: It was, and I think it’s because culturally it’s embedded. Our sense of community is very strong and that’s why I think crowdsourcing platforms do well in Asia because people want to give a dollar or two dollars to multiple campaigns among people who want to work together. I think that philanthropy we’re donating is huge, but our legacy in the future should be more generosity, even among the top 0.5 per cent in Indonesia, because while half a dozen or so of my friends are really generous, or have the intention to be generous, it’s my observation, that the more wealthy people are, the more stingy are. I feel like a lot of people’s mindset is this: I’m going to get rich first and then I’m going to give back when I’m older. But a thing about money is that it doesn’t make you more generous, it just amplifies your character so, if they’re not willing to give a dollar and a half right now, when they have a million dollars, I’m pretty sure they won’t be willing to give a similar proportion then. So, I think what I would I would like to see is generosity. More philanthropy, more impact investing.

So going back to the wealth transfer, you don’t see a big seismic shift in philanthropy?

AT: I think it will be higher but not exponentially, like life-changing.

VC: The whole culture has to mature. The wealth will transfer anyway, but what we need to transfer with it is the spirit of giving, with or without the tax benefit.

AT: I don’t want to be pessimistic and say there’s nothing going to change. I think there’s going to be new role models, but I don’t think it’s drastic enough because just from the small sample of my group of friends, less than 10 per cent are actually interested in impact and interested in using their wealth in that way. That’s why a lot of organisations globally and even regionally are really trying to capture this next generation and influence them because their power and their role is tremendous. I saw a statistic that said to reach the SDGs, you need 2.5 trillion dollars and yet the wealth transfer globally is fifteen trillion dollars, so less than 15 per cent of the wealth transfer. Maybe we don’t need to capture the whole high net worth individual population, just 15 per cent globally. But even that is challenging. Obviously, you learn from your parents, you are educated somewhere else, you’re more woke in this generation, but I think now is the time to start raising more awareness and advocating and that’s why last year, I started inviting more friends to conferences like this. Previously, they would come up to me and say, ‘this is my first time hearing about impact investing,’ or ‘this is my first time hearing about gender-lens investing or ESG, or sustainability.’ It’s during those ‘spark’ moments that you really want to capture them. I actually have another community called Spark, through which we want to capture young leaders who are going to be powers of influence, so that in the future, when they are leading, they can lead with not only their mind but with their heart of generosity.

Do you see more money going to particular areas?

AT: Yes. This year or the last two years, gender and climate. Ask any funders, they are two big priorities.

Is that for young people or across the board?

AT: Across the board.

VC: Women’s empowerment is very strong. I’m just worried the boys will be left behind. In Indonesia, you can see already those who are graduating from high school and moving into university, 70 per cent are women. You have to give the opportunity, to keep the balance. You don’t want in 20 years’ time to have to be raising money for boys’ involvement, you have to be balanced about it, not go all the way in one direction.

Let me ask you about the AVPN conference. What’s it been like being back in a face-to-face conference?

VC: I think in general, we love the normal world. Just going back, meeting people face-to-face is very important. Zoom is great, but it’s not the same. But in some events, I still feel like people are just too crowded and personally, I still have some anxiety because it’s still going on so I feel like we have to be very careful. But I guess people are really coming back with a vengeance. It’s like a reunion of people who have been there all the time.

Obviously, you’re chair so you’re biased a little bit, but what do you think AVPN’s role is in stimulating…?

VC: It’s a melting pot. But really, Naina is the power behind it. I’ve been on the board of AVPN longer than I’ve been chair, and Naina is the engine that gets other things going. And it’s a great synthesiser, matchmaking, connecting – that’s the role of AVPN.

How important is that in Asia these days?

VC: Very, very, because it’s all based on trust, and word of mouth and recommendation. I think Adelle came to AVPN for the first time in 2019, right? That’s where the whole next-gen conversation came from because Naina asked her: ‘what do you think?’ ‘Lots of old people’! If you spark younger generations, you have them for a longer time. So we launched the youth initiative.

It’s extraordinary that they’ve now launched these funds. It’s very unusual for an infrastructure organisation to actually be a funder.  That’s a big shift.

VC: It was not intended that way but I guess that’s where we’re going.

Was it the pandemic that stimulated that?

VC: I think AVPN always finds itself between those who have money and want to do programmes and those have programmes but need money and that role became very significant during the pandemic, so it seemed like a natural progression.

The title of the conference is the Asian decade. What does that mean to you and what needs to happen to make it the Asian decade? 

VC: How to make it happen? I hear everybody saying 60 per cent of the global population is in Asia. So what needs to happen is for Asia to just inspire the West and to do things that really have impact which can be shown, because it’s important to account for impact, not only for the money.

Setting an example for the rest of the world?

VC: In a way, yes.

If Asia the continent could shift the needle on some questions, make a big dent for instance in climate change in the region, would that be a good step toward making this the Asian decade?

AC: Yes, but you have to identify what dent you mean, because you’re trying to prevent an apocalypse,  How do you measure that? We have to understand what the impact is we try to create so that we can speak it, we can talk about it.

VC: What kind of money, what kind of capital are needed to solve the problem? And what is success? You need to have that aligned beforehand, the values and the understanding of impact.

Read all of Alliance magazine’s coverage of the AVPN Global Conference 2022.

Andrew Milner is Features Editor at Alliance magazine.