Q: In association with Development Gateway Foundation, Intellecap is starting an online portal to connect investors and investees with a multiple bottom line approach. It will play an active role in attracting capital from both donors and investors to innovative social businesses. For supporting business development, it will also create an on-line network of service providers like investment, legal advisory, marketing, etc.

1) What are some of the services that could be a value-add for either investors or social businesses?

2) What are the value-added services that can be provided for investors?

Patrick O'Heffernan responds:

This is an excellent idea --one that is needed and one that will be well used. Similar ventures exist in the political realm to connect donors with non-profits or 527 organizations.

In the cases I am familiar with, the donors and investors remain unnamed to prevent the site from becoming a search engine for development officers looking for more leads and sending unsolicited proposals to investors who do not want them.

More importantly, keep in mind that it is very likely you will be visited by many more social entrepreneurs than investors or donors. If this occurs and is not anticipated, criticism and cynicism from the social entrepreneurs will begin to show up on the site and on other sites in discussion boards, undercutting what you are trying to do.  I would strongly suggest that:

- you consider lining up your investors first and be sure you have a strong critical mass of investors before launch

- you find a fair and equitable way to limit the number of entrepreneurs chasing your limited number of investors at any given time

- when investment is made, your site posts a case study or news note, not naming the investor, but naming the NPO or entrepreneur so other entrepreneurs can see that your site really does result in successes

I don't know if you were thinking of charging a fee to service providers for listing or advertising on the site, but if so, I discourage it. Some of them  might get business as a result of appearing on the site, but most entrepreneurs who visit the site will not have the need for or resources for accountants, lawyers, PR, etc - they are looking for cash. They also likely have some of those relationships in place.

Having said all of that, you might consider working with the donors/investors to offer entrepreneurs not only cash, but a package of services that the donor feels they need to succeed. 

Those could include:
- Legal and tax consulting
- Market research
- Banking and investment advice
- PR
- Accounting
- Management consulting
- IT consulting
- Human Resources/benefits
- Insurance
- Staff development/employment agency

If you have a pool of pre-qualified, highly competent, ethical and dedicated service providers, the donors can offer packages of cash and services, using this pool.

Good luck!

Q: I am a consultant with a not-for-profit organisation -Institute of Leadership & Institutional Development (ILID), Bangalore, India. For the past three years we have been rendering probono world class consulting and advisory services to over 50 NGOs in the country of all hues and sizes. We bring to the development sector the benefits of management principles and practices employed by business corporations world-wide and help them build on the networking and collaborations as strategic planning processes.

Is there any funding agency/donor agency that we can approach for seeking funding for continuing this service to the development sector that works exclusively for the welfare of the poor and disadvantaged in the country?  All our funding so far is from within and from the personal fortunes of theTrustees.


Patrick O'Heffernan responds:

This sounds like a wonderful Social Enterprise ready to be born. It sounds like you have built the beginnings of a strong business in providing valuable services. Congratulations. This is no easy accomplishment and you should be proud of what you have done -created a world class consulting organization in a very tough environment. That is a valuable asset.  Now to grow it and make it self-supporting, maybe the best route is not looking for a funder, but for an opportunity, an opportunity to monetize your asset.

Let me suggest that you sound like you are ready to move from Dependency - depending on grants and charity, to Sustainability - relying on revenue streams that you generate and control.  My suggestion therefore is to make the move.  Here is how:

1.  Institute a small fee schedule.  That's right, charge for your services. 
Not a lot,  but enough to cover  at least your direct costs since your "customers" are NGOs.  But, if your services are as good and as valuable as you describe - and I am sure they are, the people you help should pay something for them.  I would suggest a sliding scale based on the size of the organization you consult to. Once you have developed a revenue stream from fees, I would explore three pathways:

2.  Approach foundations that underwrite these kinds of training and management services. 
You might try the Rockefeller Foundation in New York, or the Levi Strauss Foundation or the Asia Foundation in San Francisco.  (I don't have to direct you to the Asia Development Bank and the development fund of the British government, because those are so well known. ). Don't ask for a grant for operating funds;  as for an investment in your growth.  Ask for a grant to upgrade what you and market it to regional development banks, the Indian government and other governments that work with development NGOs, foundations that work in India.

3.  Set up a for-profit branch and approach an international management consulting firm that works in India to invest and partner with you.
Pitch them for investment and a partnership in which their staff work with your staff in consulting to NGOs and development organizations. You have a developed a market that could be valuable to larger firms;  by partnering with a firm, you keep control of your market, gain access to cash and marketing, and possibly upgrade your own knowledge base.

4.  Develop new markets. 
Same as #1, but do it whether or not you get a grant.  If you are good enough and successful, the new markets will generate a revenue stream that you can use to subsidize your work with NGOs who can't pay full fees.

Q: Do you know of some great resources regarding corporate branding strategies and community development lending? I am trying to understand how large financial institutions may play a role in advancing social entrepreneurship, green building, community rebuilding, through targeted strategies that bring their clients to the table in key urban marketplaces specifically low and moderate income neighborhoods?


Consultant Bridget McNamer responds:

Here are a few resources highlighting ways that financial institutions are addressing the challenges and opportunities of community development:

• Shorebank

• Bank of America 

• Social Funds

• Grameen Bank

Q: Help! The previous Director of Development agreed to provide board members who write lift notes to individual donors with the amount of individual donations made as a result of their efforts. I am concerned about protecting the privacy rights of our donors. Is there something more substantial other than ethics that will help me to maintain their privacy.

Patrick O'Heffernan responds:

It depends on what you told them to begin with. If your materials, including your web site and your solicitations, clearly state that privacy will be protected, you can point to those. I would also check with the Association of Fund Raising Professionals for their guidelines. A good argument is that you might anger them and lose them --so why take a chance?  Don't forget to put an aggregate amount in the note :-)