As part of our New Perspectives Series, we had the pleasure of hosting an in person event at the Royal Society for Arts where we met with charity leaders and discussed the possibility of utilising enterprise as a means for delivering effective outcomes and solving funding issues as we face the tough economic times ahead.
We were joined by Nikolaus Hutter, who has a background as a Venture Capitalist and is currently supporting impact-led enterprises with coaching in business development and access to funding. Nikolaus is passionate about the ‘Purpose Revolution’ and argues that what the market understands as value is due to drastically change. He had some motivating insights around this to share with those working in the Third Sector.
Nikolaus introduced the Purpose Revolution and the existence of new enterprise opportunities that are focussed on impact. He made it clear that there are investments available for enacting proper change and making the world a better place. He spoke about the growth of impact investment over the last 10 years and how there is still a long way to go but a huge amount of capital available for this.
With charities and NGOs reliant on philanthropic funding, issues like hunger and poverty remain unsolved. Enterprise provides an opportunity to multiply the funding pool available for impact-led organisation.
During his presentation Nikolaus made a strong case for enterprise-led development, businesses being afraid to develop enterprise-models within fragile economies and vulnerable communities, despite the fact they need the investment. Meanwhile charities already operating in these areas have a negative preconception of capitalism and aren’t always willing to change the nature of their activities. However, Nikolaus is certain that with the shift towards a purpose economy and the growth of impact investment, there is an opportunity to develop enterprise-led solutions to the world's most pressing problems and to add value in a way that previous economic models would not have allowed.
The event explored the importance of truly understanding value, and how to measure it, in addition to looking at the things that you can’t measure, that have intrinsic value.
Much of the work done in the third sector by charities and iNGO’s is in the form of value that cannot be quantified in traditional ways but they are also hindered by not having the structure of an enterprise and therefore cannot seek investments. This keeps the organisations doing the important work that relates to the blind spots in our economy, (as in the people, the places and the topics that our market neglects), reliant on inconsistent and often smaller scale funding models, such as philanthropy and their positive impact is limited by this.
The shift to a purpose driven economy has already started… We have seen businesses committing to the environment, such as Patagonia who has always placed importance on social responsibility and purpose. They recently made Planet Earth their main shareholder. It is clear that as a global society we have a new Why? and new priorities that encompass social and environmental value, and the quality of human life.
Nikolous states that this shift is an opportunity for charities and NGO’s to develop enterprises and seek investment, as the real value comes from solving problems that they are already engaged with and that the investment / return can be a consequence of that. Based on the discussion that followed this inspiring talk, we believe we provided the range of charity leaders in the room with the confidence to think differently about their cause and their funding issues, as well as permission to think creatively about the potential solutions.