COVID-19 has acted as a magnifying glass, said EVPA board chair in his keynote speech opening the Association’s 16^th annual conference. It has exposed the limits of our socio-economic systems. Even the Netherlands with its strong tradition of social welfare and its active intervention to manage the crisis, inequality is accelerating. Social investing is no longer an option, he said, it is a necessary response to events. Donors have reacted promptly to the COVID crisis but by and large they have focussed on the sectors and the geographies where they are already active. While this is understandable, we are at the point where we need to do something different and we need to do it together and, on the positive side, the pandemic has increased collaboration. A recent survey of EVPA members shows that many of them have taken steps to work or to fund together, but more is possible. ‘Let’s be ambitious about collaboration,’ he urged. Networks need both to support it and to walk the talk, encouraging it by publicising opportunities and examples, and building the right infrastructure. Investors for impact need to make common cause in order to be credible to other actors and to make their voice heard. ‘Change needs power,’ he said.

Others, not surprisingly, took up the theme of collective effort. Amit Bouri of R3 echoed this in the final day’s keynote. So what more can impact investors do? A poll conducted during the conference on the principles of the charter of impacting investing launched last year suggests that while members are investing for the long term and are increasingly finding ways to work together, they are faring less well in measuring and managing impact and mobilising other resources in the social investing ecosystem.

‘It’s all about the social good’
DRK Foundation is an impact investor which funds both for- and non-profits working to solve complex social problems. Its focus is on early-stage organisations and it makes one-time investments which it backs up with technical and non-financial support. To date, it has funded 180 investees to the tune of USD200 million. Among its investees is Kiva, a small loans organisation which uses what is effectively a crowdfunding model to support organisations working to alleviate poverty. It has taken off to such an extent that, so far, says Premal Shah, its founder, it has deployed USD1.4 bn in small increments of USD25. Jeff Denby of the Renewal Workshop, another DRK investee, is applying a circular business model to the garment industry, taking surplus or reject clothes produced by the industry, repairing and refurbishing them and then selling them. In a sense, COVID-19 has provided a stimulus, he said, by turning the old business model of surplus production and waste on its head, so that producers can now see the value of the circular model. It’s time for companies to move away from traditional practice, he urged, where you make money and give some of it back, to one where the impact is the product or the service. Well and good, but if you’re an investor, how do you find promising organisations like these? Jim Bildner Of DRK stressed the importance of teams in start-ups. Identify a team that is rooted in the problem and has a clear model. Don’t get hung up on conventional wisdom, he urged – ‘it’s all about the social good.’ This kind of work has never been so important. There is still ‘too little capital for Jeff and Premal.’

Steven Serneels

Steven Serneels’ remarks about the weaknesses of systems found an echo in a debate on the future of democracy. Who will save the saviours of democracy? Democratic systems, already under pressure, have seen that pressure intensify in the period of the pandemic and watchdog organisations are struggling to survive in a bleak funding climate. Selmin Caliskan of Open Society Foundation Berlin noted that there was no ‘rescue umbrella’ for such organisations in Germany and many were saying that they would not survive.

Companies could be unlikely allies. Axel Dauchez of Make.org and Patrice Schneider of the Media Development Investment Fund noted that they are increasingly waking up to the fact that their operating environment depends on the maintenance of the fair and open practices democracy can secure. ‘If public debate collapses,’ as Schneider put it, ‘you will suffer, too.’ In addition, consumers expect companies’ behaviour and governance should conform to accepted democratic norms.

The corporate response to the COVID-19 outbreak also shows companies’ awareness of their social role. Katrien Buys of Grupo Ageas urged them to build on the momentum for social involvement the crisis had produced. What it has brought home especially, for Steven Braekeveldt, Ageas CEO is that ignorance is not an excuse for doing nothing about sustainability and it should start in your immediate environment: ‘how can you be David Attenborough in your own department?’

Waiting for Godot
The risk of waiting for someone who might never come is very real for innovative social ventures, said Maria Ines Sequeira of Casa do Impacto in Lisbon. It’s an impact hub which aims to fund or brings in funding for social start-ups which are aligned with the SDGs. It will supply patient capital and employ a payment-by-results approach based on goals set at each level of development. It remains difficult to find investors in unproven initiatives anywhere and this is all the more so in Portugal with its immature social enterprise market. Because of that, Casa do Impacto is not prioritising a return on its capital. It sees its role as stimulating the social impact ecosystem which, as Lisa Jordan of DRK remarked, involves non-financial support, helping to crowd in other investment or lobbying policymakers.

From egosystem to ecoystem
Looking beyond the individual to the whole was a constant theme. Premal Shah of Kiva noted that one of the challenges for social entrepreneurs is to move from ‘the egosystem to the ecosystem,’  echoed by another delegate who said there was no room in networks for egomaniacs.

The value of data to the social sector is stressed almost as often as its absence is bemoaned

In order to make the investing for impact ecosystem more resilient to crises, both investors and organisations will need to make dramatic shifts, In her keynote on day 2 (Resilience Day), Ann Mei Chang, writer on social impact and former head of social innovation at USAID, posed the question of how we could move from survival, to restoration and – since we didn’t want to go back to status quo before COVID – to transformation? We need to encourage innovation and she suggested three methods of doing this. First, tiered funding. Increasing amounts paid out to organisations in tranches based on their success can encourage them to stretch. The second is the offer of prizes or challenges to address identified problems. The third is the use of payment-by-results models. Social and Development Impact Bonds could bring good results, as in the case of Indian NGO Educate Girls to enrol and retain girls in education. The use of a DIB had encouraged them to become more rigorous in collecting and analysing data, which had improved their model. While DIBs and SIBs could be complex to design and operate, more simple outcomes-based bonuses could also achieve good results.

In a later session on how philanthropists can support risk-taking and innovation, she also floated the idea of blended finance, though, as she and Axel Ville (ADA) noted, it can be difficult to bring different forms of investment together because each is locked into its own rules or norms. Impact investors have often adopted a ‘do well by doing good’ mantra, feels Chang, which leads them to look for market-rate returns. Doing some good, she said, is not good enough. We need to stretch. Impact investors ‘fall in love with the solution, instead of staying in love with the problem’ and the biggest threat to impact investment is that investors ‘are not ambitious enough.’ COVID has exacerbated many of our problems but it has also opened up the opportunity for transformative change if we are brave enough to take it.

But opportunities can be hard to take at the sharp end. Tim Straight of the Homeland Development Initiative Foundation (HDIF) which works in rural communities in Armenia noted that when people are living hand to mouth and burning trees from the forests to keep warm, it’s difficult to talk about resilience and recycling. Leonora Buckland of Stone Soup suggested that community resilience is the ability to recover from, or respond positively to, crisis. Has this increased or decreased in the wake of COVID? A bit of both, was the general feeling. People and organisations have shown willingness to work together and to adapt and adopt quicker and there is a new urgency in issues like the environment and the development of the circular economy. Funders, too, have often responded promptly and positively but it is important for them now to reflect, felt some participants. Most of the initiatives taken by funders so far have been short-term, a swift response to crisis. Now it’s time for them to think longer-term about how to deal with the delayed but severe effects of the crisis on community groups and organisations. Soo Young Park from Namati pointed out that lack of community resilience often stems from power imbalances and that, while law and policy can be important instruments to increase resilience, they are often absent from the conversation.

Social enterprises: optimism and frustration
As Bas van Abel of De Clique pointed out, what social entrepreneurs most often want is systems change, which is difficult when you are constrained to working within the system you are trying to change. One effect of the coronavirus has been that people now accept that the system is not working and there is therefore openness to change. However, while social entrepreneurs might see the opportunity, there is a danger that investors will be more risk-averse, believes Idriss Nor and that innovation will suffer.

The use of the expression ‘investing for impact’ which EVPA has adopted, means that its net is cast increasingly wide.

A survey carried out by Ashoka among its European and fellows showed up this possibility very clearly. Most of the social enterprises (60 or so) who responded see increased demand for their services and the possibility of making a greater impact but, at the same time, nearly all (93 per cent) are struggling to find funding and to maintain basic operations in a number of ways. For many of them, it’s a time of optimism and frustration, as Matthias Scheffelmeier of Ashoka Germany observed, that just at the time when what they offer could be of the highest value, their ability to offer it is threatened. Through its Changemakers United platform, Ashoka has reached out to its fellows to help them map and support their operations (especially where these are to do with responding to the pandemic), to communicate them more widely and to connect them with both users and sources of support. Examples of the kind of initiatives he was talking about include Fundacion Ana Bella in Spain which is empowering victims of domestic abuse, Easy Peasy in the UK which is devising effective online learning tools and Activity Dose in Norway, an initiative to increase quality of life for the elderly in care homes, which has had to adapt its model from one based on site visits to one which based on digitised content.

A ‘just and impactful’ recovery
The design sprint element of the conference was one in which a group of people tried to work out practical, actionable solutions to a problem. A session on the role social enterprises, social investors and social sector organisations (this being the EVPA, the emphasis was strongly, if not always explicitly, on social enterprises throughout) can play in shaping a more just world beyond COVID and how can this be sold to governments and funders explored both positive developments and obstacles. Cliff Prior of the Global Steering Group (GSG) on Impact Investment noted much progress on impact reporting systems, previously a big obstacle to investors hesitating to take the plunge into impact investing. On the ground, there has been a spontaneous upsurge of community activity. A series of videos called ‘Make Money Matter’  doing the rounds in the UK and Australia, to encourage a movement of ordinary savers and investors for transparency on where their money is and how it is used. But what about the obstacles? There is a danger that momentum will evaporate once the worst of the crisis has passed. Investors will go back to maximising profit. Governments, with worsening unemployment and social problems and plummeting GDP, will see social enterprise as trivial. With these pluses and minuses in mind, the group concluded that the most actionable, important and potentially influential elements of the discussion were the progress on impact reporting systems and the Make Money Matter initiative.

Saskia Bruysten of Yunus Social Business in Germany summed up social enterprise day: social businesses and social enterprise have crucial roles to play in the COVID era, as first responders and as key players in reshaping society, but they need our help now. Steps taken to support them so far are commendable but they are not enough.‘We can do a lot more. Let’s be creative,’ she urged.

Two words stood out from the conference, ‘more’ and ‘together’.

Strategies for impact investing to combat climate change were rehearsed. The usual suggestions were voiced – more investment in carbon capture and reafforestation, wind, water and solar power. Two things were striking about this session. First, by the end of it, participants were talking less about investments in innovation or development and more about the use of shareholder action and citizen lobbying as a way to persuade recalcitrant companies. Second, the importance of philanthropy was stressed as a means to scale ideas that investors shied away from.

Data
The value of data to the social sector is stressed almost as often as its absence is bemoaned. On the contrary, argues Stefan Germann of Fondation Botnar in Switzerland, the term ‘data mining’ creates a false attitude. It suggests scarcity. In fact, data is abundant but what makes it valuable – and what sometimes hampers its use – is its ability to flow. Nuria Oliver of ELLIS in Alicante also noted our formidable ability to collect data but argued that the key need is for its interpretation. Massimo Lapucci of Fondazione CRT spoke of the European Data Centre for Social Impact in Turin which the foundation has recently set up. It will undertake research, advocacy and training in the use and interpretation of data and will focus on areas like the future of cities, migration and internal displacement and impact and investing and finance.

“The value of data to the social sector is stressed almost as often as its absence is bemoaned. On the contrary, argues Stefan Germann of Fondation Botnar in Switzerland, the term ‘data mining’ creates a false attitude.”

Benjamin Bellegy of WINGS added that data is not useful unless its implications are acted upon. WINGS and Sattva have recently compiled a dashboard on the responses of philanthropy support organisations to the COVID outbreak. It shows an unprecedented level of cooperation among philanthropy’s players and also how critical support organisations have been in enabling and coordinating a response.  But it is also a call to action, argues Bellegy. We need to think how we use the momentum generated to increase future collaboration.

Night skies thinking
A session I found irresistible because of the apparent eccentricity of its concept was one on astrotourism as a motor for local development (astrotourism means looking at the stars, not travelling to them, so the eccentricity is less than you might suppose). The IAU’s Office of Astronomy for Development has partnered with an Indian organisation, Astrostays to organise trips to a village of Ladakh in the Himalayas which offers ideal conditions for watching the stars. Locals are trained in the use and maintenance of a high-spec telescope. Visitors are also accommodated in the village and their guides not only feed and house them and provide basic explanations of astronomy but also tell stories of their own traditions and interpretations of the stars, so the visits offer both a cultural and educational experience and valuable revenue for the village. Unfortunately, though not surprisingly, apart from the two presenters, I was the only one attending the session.

How it worked
The conference was structured in half-day chunks and spread out over a longer period. Since a virtual conference can’t provide the immersive experience a live event does, it was good thinking to make a merit of that. It allows participants time to deal with the rest of their life and it feels less gruelling than concentrating on a screen for the whole of a day. Sessions were often small enough to make a proper conversation possible, though that brings its own challenges. The use of the expression ‘investing for impact’ which EVPA has adopted, means that its net is cast increasingly wide. As some noted, mediated a conversation in which people with very disparate interests are involved can be testing. Of course, everyone misses the experience of a physical gathering. EVPA did their best to offset part of that by what they called ‘speed-dating’ sessions where a handful of participants were brought together to simulate a coffee-break conversation. The astrotourism hosts probably suffered particularly from the online format. I couldn’t help thinking their initiative would have got a more sympathetic hearing if accompanied by coffee, lunch and spontaneous conversation.

Two words stood out from the conference, ‘more’ and ‘together’. Incoming CEO Roberta Bosurgi noted this clearly in her closing remarks. ‘We need to raise our voices,’ she said and finished with a challenge to those listening: ‘what can we do better when social entrepreneurs and social enterprises are still marginal players? How can we help EVPA become a catalyst for change?’ It’s a question delegates will attempt to answer when – pandemic permitting – the reconvene for next year’s conference in Porto.

Andrew Milner is associate editor of Alliance magazine