I belong to generation X, and during the 1980s from 1st grade to 9th grade I attended Saint Paul’s Catholic (Primary) School During Secondary school I was enrolled in Catholic Niels Steensens High-School (Gymnasium) My Journey Into the Impact Investing Industry Selected Highlights • 6-12 March 1995 World Summit for Social Development (WSSD) & NGO Forum, held in Copenhagen. • 2001: ILO Social Finance Programme: Decent Work Agenda (S-dim of ESG) & Fundamentals Principles Right at Work; HIPC; Financial Innovation: Debt-for-Jobs-swaps & MFI capitalization • 2003-2004: ILO Area Office in Zambia: Mapping Microfinance industry. • 2010-2012: ODI, IEDG, SME/PSD Finance pgm & the role of DFIs • 2012-2015: AfDB, North Africa Region Team: Support to VC/PE Funds • 2016: IHEID: SNIS 2-year Grant Proposal: Remittances & Impact Investing. • 2017: IIX Institute: Intro to Impact Investing & IIX Chapter Lusaka. • 2017 – on-going: 4IP (Independent Infrastructure & Impact Investing Partners) Group: • 2018 – Sept 2021: GSGII-NABII Zambia (Board Member). • 2019-2020: Impact Investment Exchange (IIX) Partnership Specialist, • 2020: SIIA (Swiss Impact Investing Association) Advisory Board, • 2021 – on-going: Impact Entrepreneur Magazine Correspondent, • 2022 – 2023: Social Finance Expert at the UN Road Safety Fund, • 2021 – on-going: Member of the Board of SIIA: Seminars/Webinars; SIIA Summit & Building Bridges sessions • 2023: Faith-based Investor: VC Group. • 2023 – on-going: Member of the Swiss NABII-pre-taskforce Working Group. • 2024 – 2025: UNECE secretariat’s Technical Panel PIERS Programme: Evaluating & Rating 40 PPP projects. Today’s Roadmap ❖ ❖ ❖ ❖ ❖ ❖ ❖ ❖ How philanthropy in Africa could develop in the coming decade and Why this matters! How do impact investors work with non-profits? Philanthro-Capitalism. The Social Finance Landscape. The Origins and Expansion of Impact Investing in Western Africa. Supply of social investment in WEST AFRICA. Who are the major impact investors in Western Africa? ❖ ❖ ❖ ❖ DFI Non-DFI (SFMs) Foundations Faith-based organizations ❖ The Case for Faith-based Impact Investment. ❖ A few conclusions and policy recommendations. Number of high-net worth individuals (HNWIs) in Africa as of 2022, by country Philanthrocapitalism. “While great expectations and grand aspiration exist across the financial spectrum,” it is the wealthy who can make things happen (Schervish, 2000). Wealth Creation and Philanthropy on Africa Philanthropic Motivation and the Influence of Family, Culture and Religion in African Philanthropy Innovation in Philanthropy Table 1: Stimuli for Innovation in Philanthropy Entrepreneurial Philanthropy Figure 1: The social finance landscape TYPES OF IMPACT INVESTING Impact investing can match specific nonprofit needs Impact investment only works under specific conditions Investment Universe 40% 60% CATEGORISATION OF SUSTAINABLE INVESTMENT APPROACHES Table 2: The Characteristics of Entrepreneurial Philanthropy Models The Origins and Expansion of Impact Investing EVOLUTION OF THE SOCIAL INVESTMENT INDUSTRY IN WEST AFRICA EMERGING TRENDS IN WEST AFRICA SOCIAL INVESTMENT INDUSTRY Table 3: Summary of Key Social Investments Trends across Focus Countries SUPPLY OF SOCIAL INVESTMENT IN WEST AFRICA 23 Nigeria continues to experience growth in deal flow, but Ghana has yet to replicate its 2010 peak Figure 1: Impact capital deployed by year, 2005-2019 Nigeria impact investor location and type breakdown, September 2019 Selected Social Investors and How They Are Operating 4IP Group SIIA IPA 27 4IP Group SIIA IPA 28 4IP Group SIIA IPA 29 4IP Group SIIA IPA 30 Faith-Based Giving • Faith-based philanthropy has a long history in the region, given the profoundly religious fabric across the countries • There is an increasing shift in the way religious institutions are financing social good. Pope Francis is, for example, advocating for an impact investment strategy for the Catholic Church; • Faith-based institutions were showcased to be playing a role in the achievement of the SDGs. • More structured mechanisms need to be formulated to tap into the vast resources held by the religious institutions towards the financing of the SDGs. • More structured faith-based giving has been witnessed mainly in the health and education sectors. • Close to 40% of primary and secondary health facilities in Nigeria are registered under the Christian Health Association. The region lacks adequate advisory service providers supporting grant makers in their transition towards venture philanthropy and impact investing. Summary of Philanthropy Ecosystem Trends across the Focus Countries Faith and the Future of Impact Investing The answer to a search for impactfirst peers might be found in religions. • Faith-based investors • Represent trillions of global AuM in fact • All Christians manage over $150 Trillion. • Christians have a long history as pioneers in responsible investing. • Examples include, • Aliter Invest, • Backbone, Which are both guided by faith-based doctrine. Challenge Why do we need to Change the current Narrative: • Christians own more than half of the world's wealth. • This also happens to be 200-300x greater than what is donated philanthropically each year. • Capital of this magnitude has influence to • help bridge the SDG financing gap and • finance the COP21-8 commitments. • Yet, many Faith Driven Investors are content to let others determine where this money is invested. • Too often, they passively profit from portfolios that run counter to their beliefs. • The problem is not money. • The problem is whether that money believes in impact. • We want to contribute to this change. For faith-based investors already deploying other responsible investing strategies Faith-based roots: Nun Funds: The Original Impact Investors New, deeper impact allocations within faithbased portfolios Current Challenges: • Investment advisors and consultants specializing in impact investing, such as 4IP Group LLC, exist; however, they/we have had limited access to the faith-based investing community. • Uptake of impact investing has been limited (11% of AuM), • although faith-based investors have a history of utilizing other responsible investing strategies, such as negative screening (88%). • 2% use biblically responsible investing, • Christian faith-based investments with intended spiritual return strategies, and environmental screening. Values guiding investment decisions Human Dignity The environment The Commonalities and alignment • The commonalities between • faith-based investors and • impact investors’ interests in the SDGs suggest opportunities for collaboration to pursue shared social and environmental goals. • Evidence from the GIIN’s • Faith-based investing survey and • 2019 Annual Impact Investor Survey also suggests that faith-based investors and impact investors are not yet aligning around shared interests! • Faith-based investing survey respondents stated a top challenge their organizations face in pursuing impact investing is finding/sourcing investments aligning with their faith tenets and values. Build the case for impact investing as a tool to further faith-based organizations’ missions and values Equip faith-based investors with the means to access relevant impact investment products • According to the GIIN’s 2019 annual impact investor survey, fund managers who raise capital from faith-based investors were asked about their experience. • Similar to the faith-based investing survey findings, the top challenge cited by fund managers was • that their fund did not target specific impact themes of interest to faith-based investors. • There could, for example, be a mismatch in • the impact offered by fund managers (GP) and • impact sought by the faith-based investors (LP), so the development of new faith-based investor products may be needed. Summary & Conclusions • The social entrepreneurship movement […] • Business entrepreneurs direct their philanthropy […] • Entrepreneurial expressions of philanthropy […] • Engage a new generation of entrepreneur-investor philanthropists • who find these models aligned to their business acumen, • who feel more personally fulfilled by personal engagement, and • who are focused on outcomes that offer significant social transformation. • We predict that entrepreneurial philanthropy will gain in popularity in Africa, particularly amongst entrepreneurs and investment professionals. Conclusions (con’d) • Through • • • • tailored messaging about the case for impact investing, practical guidance, resources on how to get started, and strategic partnerships, • Faith assets can be reallocated with deeper purpose. • Younger generations increasingly seem interested in how its faith speaks to the larger issues of the world, just as I was taught in Sankt Paul Primary School. • Thus, to show what they are for, faith-based organizations • Must mobilize to redesign and push the field of impact-first investing forward and • help the economy shift towards improving equity and social justice. Recommendations • It is recommended that African grant-making foundations and philanthropists who have operated along traditional grant-making lines, actively consider models of entrepreneurial philanthropy to complement their grant-making activities. • Additionally, it is recommended they support venture philanthropy and impact investing • by assisting with referrals, placing capital in venture philanthropy and impact investing funds, or • by co-funding investments. • Recognize and regulate impact capital as an investment strategy – which can • enable other recommended policy responses, • ensure impact investors operate at high standards (cf. SVI-UNDP SDG Impact Standards), while also • providing impact investors with the assurance that they can benefit from wider investor protections. • It is recommended to promote impact angel investing in Africa through existing angel networks. Thank You for your Attention Contact Details: Dr. Christian Kingombe E-mails: ckingombe@siia.ch ckingombe@4ipgroup.org Mobile: - +41 76 504 46 47 WhatsApp: +41 076 504 46 47 Homepages: https://siia.ch/ http://4ipgroup.org/ https://www.linkedin.com/company/35625719/ Annexes In numbers: The top 10 foundations funding development • According to data from OECD, private philanthropic providers spent $10.7 billion on development in 2021. • Although this paled in comparison with the $185.9 billion aid spending of Development Assistance Committee member countries, some of these private funders have become household names in global development. • Based on OECD data, the largest foundations are: • . Bill & Melinda Gates Foundation. • . Mastercard Foundation. • . Wellcome. • . Children's Investment Fund Foundation. • . Open Society Foundations. • . Ford Foundation. • . Bloomberg Philanthropies. • . IKEA Foundation. • . William & Flora Hewlett Foundation. • . Oak Foundation. Foundation Profiles Foundations as Impact Investors Bill & Melinda Gates Foundation: Gates Foundation works in the following six thematic areas: Bill & Melinda Gates Foundation Average grant size (2018-2022) Gates’ other main vehicle is the Strategic Investment Fund. Bill & Melinda Gates Foundation Geographic focus Mastercard Foundation Program areas Mastercard Foundation Geographic focus Banks & Financial Firms as Impact Investors WHO ARE INVISIBLE HEART IMPACT FUND2? ▪ We are a joint venture fund, combining the expertise of Geneva-based 4IP Group and …. [looking for new faith-based GP2 & GP3] ▪ IHV We are focusing investment in both Africa and possibly in Asia (Global South) (s.t. GP2-3), with $50 million in assets under management ▪ We are proud members of the Solar Impulse Foundation World Alliance of Efficient Solutions Network OUR MISSION Invisible Heart Ventures’ (IHV2) mission, aligned with the SDGs, is to drive impact alpha by mobilizing US$50 million of investment capital and investing in start-ups and early-stage technology and innovation companies with impact worldwide, principally in developing and emerging markets, also called the Global South. Multiple outcomes are created by transforming many sectors to - enhance climate action through ClimateTech (which naturally includes Energy, AgriTech, waste management, and forestation & ocean), - access to reasonable healthcare through HealthTech, and - facilitate financial inclusion through FinTech companies. OUR VISION ”The more impactful we can make a company, the more valuable it can become” We embrace measurable impact as a driver in all our Venture Capital investments. In addition, we are shaping the way the venture capital market makes business and disrupts the revenuecost structure. This is the “invisible heart of markets,” guiding their “invisible hand.” INVISIBLE HEART VENTURES IHV2 Fund Edge over Traditional VC Funds IHV Evergreen Fund Traditional Fund Liquidity No lock-up period (with notice period) Lock-up periods Life Cycle No investment constraints Investment decisions based on pre-determined timelines Asset Management Priority Impact driven appreciation Gains and distribution-based investment policy Investor-Manager Alignment Impact and ethics driven collaboration, mandate for sustainable and socially responsible assets Performance measurement (high risk) Diversification Diversified investment base Limited diversification Return Profile High Yield PE returns Subject to market conditions Non-financial ESG Data Collection Technology platform enabling automation, consistency, and an ability to store and share manual, time consuming, and clunky ESG Framework Proactive management by adopting industry framework – SDG Impact Standards (IMP) Simple ESG measurement Management Fee & Carried Interest Founder friendly: We reward Investees based on SDG outcomes performance. Lucrative 2 (AuM) – and - 20 (capital gain on asset) fee arrangement structure. INVISIBLE HEART VENTURES Values Invisible Heart Impact Fund 2 [Tech Impact Venture Fund] Our Values (ESG & SDG for Tech Ventures) Reshaping Corporate Strategy Many progressive corporations are paying greater attention to environmental, social, and governance (ESG) measures. They are broadening their approach to building competitive advantage and new business in a way that includes thinking deeply about their activities’ impact on environmental sustainability and greater societal welfare. Such efforts demonstrate that companies can rethink how to factor societal issues into corporate strategy and performance while ultimately being rewarded by investors. Innovating for Sustainable Development Answering a few questions can help companies step up innovation efforts for achieving SDGs: • Does the tech company’s growth strategy identify new business opportunities in SDGs and consider ways that the company’s capabilities can be extended to achieve a positive greater societal impact? • Does the tech company understand what pieces of its innovation portfolio (new technologies, products, or services), could make a difference in achieving the SDGs? It’s time for SDG champions in the public, social, and private sectors to assess how well they are running the race to 2030. With the help of private-sector innovation with focus on sustainable development, we may significantly increase our chances of winning that race. Every investment has an impact. • A growing community of ministries, businesses, entrepreneurs, investors, and fund managers have all experienced God awakening a movement. • It’s bigger than simply avoiding “sin stocks.” • This movement is all about • investing in human flourishing and • driving capital into initiatives that stand for something significant. A Faith Driven Investor is... Therefore, they... Identified in Christ Reflect Creation in Making New Things The Servant of One Master Redefine Investment as a Partership Following Prayer and Scripture as the Handbook for Investing Think Differently about Risk Aware of the Power of Money and Markets Will They Speak Sacred or Secular in Africa? Pulling from One Pocket Toward One Goal Are Known For What They're For Redefining Return Seek Collaborative Community Fix Broken Things Think Eternally Investing In God's Glory • What if, instead, we could align all our investments with God’s heart? • As Christians, we seek to make God a part of every decision we make. • The way we parent, lead, serve, and spend. • We can do the same with our investments. • Just imagine how our faith driven investments could then influence a disproportionately positive impact on the world? • That is our hope. And it’s our purpose that every Christ-following investor would come to believe • that God owns it all and • that he cares deeply about the how, where, and why behind our investment strategies. • Money is put into our hands to steward wisely— • for His glory and • for the flourishing of the people around us. There are existing tools and resources that can be shared with faith-based investors on the technical aspects of impact investing. • Common impact measurement and management (IMM) systems can guide faithbased investors in measuring, managing, and optimizing the impact of their investments. • In addition, financial performance studies on impact investments can be utilized by the faithbased investing community. Partner to amplify work and increase reach to faith-based investors • In order to engage faith-based investors, it is advantageous • to already be active in faith communities or • to collaborate with other organizations trusted by faith-based investors. • Moreover, a number of faith-based networks have indicated that their members would like to learn more about impact investing. • The scaling-up of opportunities and partnerships can happen through conferences such as • the GAF’s Faith-based Investment Conferences and • The Vatican Conferences on Impact Investment. Government as Impact Investor «Regular» people as Impact Investors