Philanthropy can be an essential catalyst for inclusive business and impact investing, opening doors for current and future players by providing needed support in a burgeoning market to allowing the progress that others can then replicate.
This report was published by the Monitor Group (now Monitor Deloitte) in partnership with Acumen聽in April 2012 under the research and authorship of Harvey Koh, Ashish Karamchandani, and Robert Katz. It is licensed under the .听
Top Takeaways
- Despite the tremendous excitement around impact investing to support inclusive models, few impact investors are willing to invest in the early stages of businesses targeting the poor. This has created the problem of the 鈥減ioneer gap鈥 in funding and support for firms pioneering new models of inclusive business.
- Philanthropic support can play a catalytic role in helping these innovative models successfully cross the pioneer gap through the practice of enterprise philanthropy.
- Enterprise philanthropy helps pioneers firms to develop, validate, and establish new business models, and even build new markets to serve the poor.
- It聽can take a broad view of impact beyond the individual firm to encompass whole聽markets, and provide funding to build the right demand- and supply-side conditions聽in these markets so that pioneer firms鈥攁nd those that follow them鈥攃an truly聽scale their activities and impact.
Inclusive business pioneers face extreme challenges, truly realizing the impact in impact investing will require more, not less, philanthropy, and will need that philanthropic support to be delivered in new ways.
