Social purpose organisations (SPOs) in Asia need different forms of support at different stages of their development if they are to succeed. To allow this to happen effectively, funders should think of the provision of social finance operating along a continuum of capital on which they can intervene at different points, rather than restricting themselves to one type of instrument, says a new report from AVPN.
However, while funders are increasingly aware of this and are beginning to use a variety of financial and non-financial mechanisms (the capital in question includes both human and intellectual capital) – providing, for example, soft loans or making investments from which some form of financial return is expected, as well as making grants – the continuum is not yet functioning as efficiently as it might, argues the report, The Continuum of Capital in Asia.
Timed to coincide with network’s annual conference in Singapore, the report notes a number of problems, among them SPOs which are unable to develop because grant funding is no longer forthcoming, yet they are not considered investment-ready and a lack of intermediaries, whose technical expertise and local knowledge can be vital.
The report calls on funders to allocate more resources to solving what it calls ‘pipeline issues’ in Asia’s less developed economies, to give more support to intermediaries and to develop standardised and effective impact measurement. Above all, it calls for collaboration between different kinds of funder – foundations, corporates and impact funds – to see where they can most appropriately locate themselves along the continuum so that it allows the continued development of promising Asian social purpose organisations.