SUMMARY OF FINDINGS AND RECOMMENDATIONS
3 Results of this research can be found in NESsT Country Assessments published for Argentina, Chile, Colombia, Ecuador and Peru.
development as having an added value to their existing programs but have not chosen to explicitly develop a grant program for the sector. The levels and duration of funding have been relatively low for the most part. Only 22% of donors have given donations of USD 100,000 or more, and the rest have provided lesser amounts. Only 22% of donors have committed for more than one year, with the rest committing for one year only. Of those committing for one year, 18% have become repeat donors, typically for no more than 3 years. Only a handful of donors have committed USD 1 million and for a period of 3-5 years. These practices demonstrate that although there is an interest in supporting early-stage impact enterprise development, the donors are not yet ready to provide significant support for these ends. These results were corroborated from interviews of over 40 institutional donors that NESsT surveyed when entering countries in the region over the past five years.3 Although the majority felt that building sustainable impact enterprises was critical, they admitted that they were not funding these efforts due to their own funding constraints. NESsT’s own work with civil society organizations (CSOs) in the region demonstrates that very few donors develop exit strategies for their grant-making. There is a resistance to covering operational costs, a critical aspect of growing impact enterprises, and a tendency to focus on very short-term results. This sets up unrealistic overall expectations for the sector and the region as a whole. Yet in spite of these barriers it is important to recognize the vital role that donors have played in recognizing this as an area worth supporting. Currently donors are really the only funding available to launch and grow these businesses in the region, since very few impact investors operate at the startup or early-stage phases. The fact that donors are willing to do so is important and provides a platform for figuring out how to expand this pool. Perhaps the most evident entry points emerge when understanding what impact enterprise areas different types of donors tend to support. It is in the areas where they have already shown commitment where they are most likely to continue to grow. Some of these trends have started only recently, in the case of some forward thinking government agencies and corporations. Foundations should continue to fund capacity support and innovation, to foster new thinking, demonstrate models, and disseminate tools, methodologies and best practices. They should also support the infrastructure for impact enterprise (e.g. events, incubators/accelerators), business planning and startup phases.
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no free ride: sowing the seeds of impact enterprise. summary of findings & recommendations Prepared by NESsT for The Rockefeller Foundation. Copyright Š 2012 NESsT.