TFC Seattle Trek – GPED Student Perspective

Sahesha Upadhyay and Dinesh Karki | TFC Trek Attendees, GPED ’19

We were drawn to the idea of social enterprise and impact investment in Nepal when we were working for development and policy related agencies. Having a close exposure with development work, we now strongly believe that augmenting the private sector’s involvement in socio-economic development can go a long way in bringing sustainable economic prosperity for a developing country like ours.

As students of economics we were primarily interested in how different strategies are being implemented by impact investment firms to integrate the noble goal of making social, economic or environmental impact with the profit-making objective so that they can remain sustainable and efficient. The Seattle Trek was a great opportunity to learn about innovative approaches implemented by various organizations, each with a unique characteristic. It was encouraging to learn that a significant number of companies are moving their focus towards impact-based investment models and we are thrilled by the possibilities of such strategies being replicated by development agencies working in developing countries.

The shared-values approach used by FSG Consulting was insightful. In contrast with its traditional counterparts like corporate philanthropy and CSR,the approach finds business opportunities in social problems. FSG helps its clients with strategies like reconceiving products and services, redefining value chain and enabling local clusters to make an impact while remaining competitive with longer term ROI, through either cost-reduction or additional revenue generation. Another firm that stood out was Global Partnerships which uses innovative fund structure to invest in impact-based funds in Latin America, the Caribbean and Sub-Saharan Africa. They lend to funds that further lend to microfinance institutions such as village banks, for example group lending to women without collateral similar to Dr. Yunus’s Grameen Bank’s model, and initiative- based lending like institutions that lend as well as provide financial education to women. We were also impressed by the impact evaluation methodology used by Global Partnerships as well as their promising track-record of always paying their investors back. Their impact evaluation involves several metrics like outputs (eg. % of female clients, number of individuals receiving training), outcomes (eg. consumption smoothing, dealing with shocks, building assets etc.) and impacts ( eg. improved economic resilience).

One of the unique players in the field is Investorflow which is an online network for impact investors globally and has a goal to efficiently match the right deals with the right investors with specific interests. Additionally, Altruist Partners’ success stories of enhancing the productivity of their clients by introducing a revenue model in the non-profit organizational model were remarkable.

Having worked with non-profits and policy in the past, we are familiar with the challenges of aid-based projects in terms of sustainability, transparency and efficiency. After visiting social-impact investment organizations in Seattle and learning about their stories and projects ,we are convinced that integrating a revenue model in the traditional non-profit projects is definitely a better way of creating a more sustainable impact in the world, with incentives for every stakeholder.