SOCAP 2023 took place in San Francisco, California from 23–25 October. Nicole Etchart, NESsT Co-Founder and CEO, co-hosted the session ‘Scaling Impact Through Collaboration: Rallying Stakeholders Around Blended Finance,’ alongside Nele Bouchier, Chief Communications & Public Affairs Officer for IKEA in the United States, and Charu Adesnik, Executive Director of the Cisco Foundation and Director of Social Innovation Investments at Cisco Systems, Inc.
SOCAP 2023 convened thousands of impact investors, entrepreneurs and ecosystem builders from around the world. Over the course of the three-day conference, many conference participants called for the need for increased collaboration across the sector.
“Impact investing – a global market with an estimated size of US $67bn in 2022 – has the potential for advancing some of the world’s most pressing issues; however, uncoordinated efforts and silos between stakeholders are holding us back from getting the right capital to where it’s needed most. Currently, the ecosystem is fragmented – and deeper collaboration is needed to bridge these gaps.””
Nicole Etchart (left) and IKEA’s Nele Bouchier at the SOCAP session ‘Scaling Impact Through Collaboration: Rallying Stakeholders Around Blended Finance’.
A number of participants highlighted that the lack of cross-sector communication has contributed to the creation of a wide range of due diligence demands and reporting criteria, which hinders social entrepreneurs from effectively raising capital.
“We see that more and more social entrepreneurs have to spend their time on meeting different due diligence or funding requirements, and not on growing their business,” echoed Nicole.
Another challenge discussed was how funders are offering investments that are not appropriate for the stage that social enterprises are in. Consider the case of small-to-medium-sized enterprises (SMEs) worldwide. These enterprises are significant contributors to job creation and sustainable development within their local communities. Nevertheless, despite their potential to drive concrete change at the local level, SMEs seeking investments fall in the “missing middle” – they are too big for micro-loans but too small for commercial credit lines, and, as a result, do not have access to the patient and flexible funding required for their growth.
Many conference participants also emphasized the need for standardized methods for defining, measuring, and reporting impact. Session speakers pinpointed the importance of involving entrepreneurs in discussions around impact metrics, with the aim of ensuring that impact goals accurately reflect the realities of the communities supported.
Fostering synergy among ecosystem stakeholders to scale the sector and accelerate impact
Corporations have the reach and resources to sustain the long-term, more flexible approaches that can support social entrepreneurs to truly accelerate their businesses.
“An important mindset to have is that as investors, we should be willing to provide patient and catalytic capital. Beyond capital, we also need to support social enterprises by bringing our expertise to provide insights into commercial knowledge. Our goal should be to uplift social enterprises and their solutions toward sustainable growth and impact.””
NESsT and the Cisco Foundation’s collaboration
Cisco invests in NESsT's overall work and impact, facilitating extensive knowledge management and transfer across NESsT's programs.
Charu Adesnik (left), Nicole Etchart (middle) and Nele Bouchier (right), SOCAP 2023 in San Francisco, California
NESsT and the Cisco Foundation’s partnership began in 2016. As part of this long-term collaboration, NESsT catalyzed a portfolio of high-impact enterprises in emerging markets and also created a digital tool that supports entrepreneurs to develop core leadership competencies.
The partnership also focused on sharing and understanding NESsT's Performance Management Tool (PMT), which collects and contextualizes data from entrepreneurs and the individuals they support.
Working with its portfolio, NESsT refines and enhances the PMT every year – this iterative process ensures that the tool remains current, responsive to the evolving needs of the portfolio, and aligned with the dynamic contexts within which the enterprises operate.
“We know the first and last names of everyone we survey within our portfolio,” shared Nicole.
In 2015, Cisco set an ambitious goal to positively impact 1 billion people through its signature Networking Academy program and social impact grants. In doing so, Cisco had to define positive impact, determine the point at which an individual can be counted as having been positively impacted, and then validate the number of people positively impacted.
“NESsT’s commitment to impact and the depth of their approach to collecting and validating data is exceptional,” commented Charu.
Co-creating change with IKEA Social Entrepreneurship
IKEA recognizes the significance of investing in the long-term and supports NESsT to adopt a portfolio-based strategy.
Colombian social enterprise Make it Real joined the NESsT - IKEA Social Entrepreneurship portfolio in 2021.
Since 2021, NESsT and IKEA Social Entrepreneurship have launched four accelerator programs, supporting a diverse portfolio of 42 enterprises across two continents and six countries.
While traditional acceleration programs tend to adhere to fixed timeframes, NESsT and IKEA Social Entrepreneurship’s programs adopt a portfolio approach, allowing social enterprises to scale in a way that makes sense for their business.
Companies remain in the program for several years, depending on their growth trajectory, which is evaluated in bi-weekly meetings and yearly benchmarking surveys using NESsT’s PMT.
Leveraging its global reach, IKEA Social Entrepreneurship also provides participating entrepreneurs with access to its corporate networks, expertise and experience through co-worker engagement initiatives.
NESsT Refugee Employment Initiative portfolio
In 2022, in partnership with both IKEA Social Entrepreneurship and Cisco Foundation, NESsT launched the Refugee Employment Initiative to invest in enterprises that support refugees and migrants to access quality jobs to provide for their families in Central and Eastern Europe.
As of June 2023, the NESsT Refugee Employment Initiative portfolio has provided housing, childcare, education, and psychological support to close to 3,800 refugee families. It has also equipped over 1,250 refugees with skills development training, language courses, and legal support. Since its inception, the initiative has worked with its enterprises to create 340 jobs for refugees.
NESsT’s partnerships with IKEA Social Entrepreneurship and Cisco Foundation, built on trust and collaboration, serve as proven models for scaling the solutions of social entrepreneurs in Latin America and Central and Eastern Europe.
“As a sector we should make sure our impact capital is also risk capital, since addressing critical social problems cannot be done without taking into account the complexity and associated costs of addressing poverty and climate change.”
Thank you to our partners for their continued support, commitment to impact, and openness to sharing their learnings.