IMPACT INVESTING

P R E S E N T A T I O N B Y

Marc Van Olst Social Investor, Impact Investing Arena

W E A L T H S U M M I T

Over the past 5 years, Marc has been involved in the Philanthropy and Impact Investing Sectors in South Africa, Namibia, Botswana and Tanzania. While he was a Partner at McKinsey, he led engagements to support the Bill and Melinda Gates Foundation with a programme to reduce Maternal Mortality in Namibia, The Global Fund to assess the performance of their grants for HIV/AIDS and an agency in Botswana to raise funding and roll our HIV prevention and treatment programmes. Since leaving McKinsey in 2010, Marc has been working alongside Dr Mamphela Ramphele to support a number of programmes tackling Education, Health, Sustainable Economic Development and Social Trauma in the Eastern Cape. Through this work, Marc has formed relationships with a number of Corporate donors and grant making organisations (e.g. Ford Foundation) and Social Venture Funds.

Marc also runs a Venture Capital fund with his Partner, Hlumelo Biko. The fund concentrates and actively manages a portfolio of investments in young companies with exciting innovations that have a significant social impact as well creating real economic returns for investors. Marc serves on the Board of the state-run Tehnology Innovation Agency (TIA) where, as a member of the investment committee, he helps to allocate state funding to innovations that can improve the lives of South Africans. Finally, Marc is involved in a civic action movement called ChangeSA that seeks to build real solutions to the challenges that threaten our young democracy. Marc holds a Masters in Chemical Engineering from the University of Stellenbosch. After graduating, he developed a successful patent in the Mining Industry that he sold in 2001. This patent won the SABS Chairman’s award in 2000. After a career as an inventor, Marc joined McKinsey & Company where he worked across a broad range of sectors in Southern Africa, Nigeria, Malaysia and Abu Dhabi.

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According to the 2010 Barclays Wealth Global Giving: The Culture of Philanthropy report, South Africans are the second-most generous nation when it comes to using their money for good causes, and rank fourth in volunteering their time to worthy causes. Of the 2000 high net-worth individuals surveyed in 20 countries, 41% from the US said philanthropy was one of their top-three spending priorities, followed by 37% of South Africans and 32% of Saudi Arabians.

“You probably already know that our societies and systems are imbalanced and unsustainable. The pursuit and implementation of ideas to bring equality and humanity to our world is the greatest

been given.” Francois Bonnici, Head of the Bertha Foundation.

“Treat your social investments the same way you would treat any other business investment - fund meaningful projects, use the best people to ensure impact and review progress regularly.”Marc Van Olst for the Sunday Times

POPULAR SA PHILANTHROPIC

PASSION POINTS:

Champion of HealthChampion of ChildrenChampion of Conservation & Our LandChampion of Entrepreneurial Spirit Champion of Arts, Design & CultureChampion of Talent Champion of Crisis

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Silvana BottegaGHIJKLM!"#"

is proudly supported by:

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www.sa-la.org membership@sa-la.org +27 (0) 791787867

DOING GOOD BETTER Investing in humanity like you’d invest in business

SALA Wealth Summit Marc van Olst 7 March 2012, Sandton

FOOD FOR THOUGHT?

TH I S I S ALSO WHERE WE L IVE

INTSIKA YETHU MUNICIPALITY Population  

No.  of  Households  

Size  

Access  to  

175,  221  (53%  <  20  yrs  old)  

45,  501  

Rural:Urban   97:3  

3021  km2  

Unemployment   >70%  

People  living  in  poverty   80%  

Households  with  chronic  hunger   24  327  (60%)  

Literacy  rate   47%  

HIV  prevalence   27%  

Disability  rate   7.6%  

GDP/capita   R3500  

Water  20%  

Sanitation  39%      

Electricity  31%  

Refuse  collection  2.5%  

Population  with  Gr12   4,.9%%  

Grant  dependency   98%  

DEFINITION OF PHILANTHROPY   “The love of humanity"   The desire to promote the welfare of others, expressed esp. by the generous

donation of money to good causes   Goodwill to fellow members of the human race; especially : active effort to

promote human welfare   An act or gift done or made for humanitarian purposes

  Greek mythology – first humans on earth, Zeus, Prometheus, Philanthropos tropos and the gifts of ‘fire’ (science, technology, intelligence) and ‘blind hope’ (optimism) – Fire gave cause to optimism, optimism helped the fire to be used to improve the human condition

A Riddle

OR

What was Bill Gates’ greatest contribution to humanity?

Facts about South African Social Investing   16m people on grants (>R100bn p.a.); 6,3m taxpayers; grants are

completely non-conditional and escalate with inflation  Over 100 000 NGO’s listed on SANGONeT (Prodder), 200 000 with

CIPRO  The average CSI award entrant ‘invested’ R50m per year (1% of

NOPAT) in 15 investments; fund management fees over 20%, few use external intermediary

 BBBEE codes reward SA companies with 20 out of 100 points for social investments at 4% of NOPAT creating a funding pool of >R20bn p.a.; impact is not a condition for getting points

 There are 6 Social investment stock exchanges globally with 2 in SA  South Africans are the second-most generous nation when it comes to

using their money for good causes (37% of ‘very rich’ list philanthropy as top 3 spending priorities)

Landscape of Social Investing in SA

Independently financially self-sustaining

Systemically financially self-sustaining (i.e. for greater good)

Financially value destructive (i.e. pure giving)

Socially value destructive

Isolated social impact

Sustainable social impact

SA social grants

Social venture capital/Impact

investing

Brazil social grants

Venture Capital, PE investments

Strategic philanthropy

Philanthro-capitalism

Reactive philanthropy, charity

Market failures,

dependency…

Some of my Top Picks •  Community Enterprise Incubators: Spending R10m a year to

create R600m available income to a community of 100 000 households

•  Collective Education Impact: Spending $1.5m a year to manage $7bn of targeted education investments in the US

•  Mapping the disease burden: Spending R5m a year in one province for GPS-health mapping to understand exactly how many of which drugs are needed when to better manage a R300m budget

•  Building a small biomass to electricity plant for R20m to employ around 60 people to collect invasive alien plants as fuel and generate R7-13m profit per annum for community

•  Spending R100 on a ‘instant’ school desk, getting your brand deep into a market and putting some pride back into a kid

My rules for Social Investing  Build a pipeline: Don’t press go until you can make choices  Do your research: Be very curious, dig deeper in an imperfect market  Invest with head and heart: Being moved by the pitch is not an excuse

to turn off your rational brain, no investing is purely rational either  Build platforms: For every 100 start-ups there are 5 ‘gazelles’  Favour simplicity: Guinea worm disease solved with a dress and bucket  Hold people accountable: Free money doesn’t mean lower stakes for

those that need it to work  Obsess with impact: Because it is harder to measure means you need

to do more  Walk together: Bigger impact, better decision making through co-funding  Be in exit mode: Your role is to catalyse and not get in the way  Do it for the people: The real beneficiary is not the person you are

funding

Being a philanthropist in SA is like…

A bigger vision for social investing

Shared Community

Agenda

Pooled Managed Fund

Coordinated implementation

mechanism

Shared management

system (measurement

and communication)

Backbone support

organisation

Multiple donors pooling funds and appointing a single fund manager with a strong advisory board

A shared definition of impact and mechanism to create accountability/accelerate learning

Specialist support organisations doing the ‘admin’ so implementers can do the real work of social good

Groups of implementation partners with mutually reinforcing capabilities

Communities mobilise themselves to make the business case for support

Leaving your footprints If not us, then who? If not for humanity, then what? If not now, then when?