The European Venture Philanthropy Association (EVPA) held its annual conference in The Hague. Over 700 participants converged to talk about the latest trends in venture philanthropy and impact investing, not only in Europe but globally.
The conference marked EVPA’s 15th anniversary. The association has grown to include 275 members (NESsT joined the first year) from 30 countries, with a growing membership of corporations and foundations. The anniversary marked the occasion for EVPA to unveil its new impact investment spectrum terminology, which includes two new definitions: investing for impact, consisting of impact-first investments into potentially financially / self-sustainable business models, and investing with impact, consisting of investments into proven financially sustainable business models and for-profit businesses with intentional impact.
Social Banking: partnerships with the EU to de-risk lending to under-banked or unbanked individuals
Among the many interesting session at the conference, one on social banking attracted a significant amount of attention. Social banking consists of traditional banks providing loans to under-banked or unbanked individuals, SMEs, nonprofit organizations and social enterprises. The session presented the social banking programs of Erste Bank and UniCredit Bank, which have partnered with the EU to de-risk their lending to underserved target markets. While these programs are relatively new, the impact is already tremendous. Because of their scale, banks can deploy EUR50M+ of social loans in one year, serving thousands of previously unbanked clients. Social banking is a true force in social finance, and the mainstreaming of banking products in the EU is a unique phenomenon around the world, thanks in large part to EU de-risking mechanisms.
A couple of breakfast events provided ample opportunities to deepen learnings. EVPA hosted a breakfast on the state of venture philanthropy and impact investing in Central & Easter Europe (CEE). One hundred participants, half of them from outside CEE, discussed the status of the sector in the region. CEE has seen a significant uptick in the number of venture philanthropy organizations and impact investment funds. Countries including Croatia, Serbia, and Hungary now count with funds. Interestingly, the consensus is that the region continues to require grant funding to develop a stronger pipeline of investments, with some of the new VP funds seeking to play that role.
FMO, the Dutch development bank, hosted the breakfast and presented its impact management framework. The bank shared a new definition of IRR, traditionally used by venture capitalists, to mean “Impact,” “Risk,” and “Return.” Each deal screened by FMO needs to balance impact, risk considerations, and returns that meet the threshold of the organization. An interesting insight was shared whereby Costa Rica is leading the transition to renewable energy, with the country’s 100% energy needs coming from renewable energy for 300 days of the year.
Panel on Gender Investing: Supporting Female Entrepreneurs and Ensuring Dignified Employment for Underserved Women
I had the opportunity to participate in a panel on gender investing alongside Leonarda Buckland of ESADE business school, and Hilary Barry of LadyAgri. In collaboration with the audience, we tackled a variety of topics to increase the flow of impact capital addressing for women-led businesses around the world. Some of the topics covered included: the importance of promoting role models for women entrepreneurs to apply to incubators and pitch to investors; how impact investors can engage in conversations with social enterprises to diversify their management and governance; and the critical role corporations can play in integrating underserved women in their workforces and supply chains.
In The Hague, 15 years after its founding, EVPA proved that by organizing its largest conference to date, the enthusiasm for venture philanthropy remains strong, with members continuing to demonstrate a strong interest for collaboration to increase collective impact.
Interested in joining the NESsT portfolio?
NESsT is hosting an open call for social enterprises in Peru and Colombia seeking debt capital.