This page contains a Flash digital edition of a book.
PHILANTHROPY


ƒ In many developing countries, enterprise growth is impeded by obstructive policies and a lack of supporting infrastructure and regulations. Ambiguities in the legal status of enterprises, weak implementation of the rule of law and unclear bureaucratic processes, along with corruption, impede the registration of an enterprise and its quest for growth. Activities to support enterprise development can also focus on the enabling environment in areas such as instituting bankruptcy laws, adopting clear accounting standards, developing a legal system that can help settle contract disputes and clarifying land titles. ƒ Lack of innovative business ideas, entrepreneurship and creativity limits the business potential in poor communities. Franchise models can be employed to scale innovative businesses that were successful elsewhere. The franchisee, who might be a great manager but lacks innovative business ideas, can apply a proven business concept, a brand name and specific training and mentoring.


The role of philanthropists Venture philanthropy combines the aims of traditional investment (to generate a financial return) with those of traditional philanthropy (to achieve a social or environmental impact). Venture philanthropy is ideally suited to circumstances – typified by small-business enterprises in developing countries – where neither traditional donor aid nor venture capital is available or appropriate. Investing in enterprises in emerging markets


corresponding figures are just 18 per cent and 16 per cent – and most SMEs are informal micro-enterprises employing up to five people, mainly women. There is great development potential in scaling up such enterprises to become viable SMEs of 10 to 100 employees. But enterprises in poor countries face severe


obstacles in realizing this potential. ƒ Lack of access to capital forces entrepreneurs to rely on family wealth, usurious moneylenders or high-interest bank loans. Microfinance helps very small enterprises, but the need for “mesofinance” (between $US10,000 and $500,000) is not being met. ƒ The necessary business knowledge to scale up is often lacking.


through venture philanthropy is not easy and is time and labor-intensive. First there is the challenge of identifying accountable, high-potential entrepreneurs or enterprises. Native wealthy individuals have a great advantage here, being able to relate to local needs and culture, and more easily identify local high-potential entrepreneurs. Second, there needs to be a strategic fit between ideas and values of investees and the principles and investment focus of the philanthropists. Third, entrepreneurs in emerging economies often have limited access to business knowledge and experience. However, venture philanthropy has a proven track record of nurturing profitable businesses, with measurable effects on poverty reduction and other social and environmental challenges. There are some key principles to keep in mind: ƒ The focus is on enterprises rather than programs. ƒ The venture philanthropist is seeking to maximize social or environmental returns ahead of financial returns. ƒ It is important to take the time to know and understand potential investees – particularly their business models, the market, management quality, and sales and marketing strategies.


FAMILY OFFICE: ASIA TOMORROW


 95


OPERATIONS


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78  |  Page 79  |  Page 80  |  Page 81  |  Page 82  |  Page 83  |  Page 84  |  Page 85  |  Page 86  |  Page 87  |  Page 88  |  Page 89  |  Page 90  |  Page 91  |  Page 92  |  Page 93  |  Page 94  |  Page 95  |  Page 96  |  Page 97  |  Page 98  |  Page 99  |  Page 100  |  Page 101  |  Page 102  |  Page 103  |  Page 104  |  Page 105  |  Page 106  |  Page 107  |  Page 108  |  Page 109  |  Page 110  |  Page 111  |  Page 112  |  Page 113  |  Page 114  |  Page 115  |  Page 116  |  Page 117  |  Page 118  |  Page 119  |  Page 120  |  Page 121  |  Page 122  |  Page 123  |  Page 124  |  Page 125  |  Page 126  |  Page 127  |  Page 128  |  Page 129  |  Page 130  |  Page 131  |  Page 132  |  Page 133  |  Page 134  |  Page 135  |  Page 136  |  Page 137  |  Page 138  |  Page 139  |  Page 140  |  Page 141  |  Page 142  |  Page 143  |  Page 144  |  Page 145  |  Page 146  |  Page 147  |  Page 148