Lisa Genasci

Scaling Impact Through Collaboration and Partnerships - Lisa Genasci, ADM Capital Foundation

In this episode of Entrepreneurs For Good, I speak with Lisa Genasci about her journey building ADM Capital Foundation, an organization that has been widely recognized for its impact across a number of important issues and for their work supporting (and incubating) some of Hong Kong's leading organizations.

It is work that that required a commitment to her vision for change, remaining focused, and finding ways to collaborate with others to bring scale of effort and impact.


About the Entrepreneurs For Good Series

Through this series, we speak with Asia based entrepreneurs whose mission it is to bring solutions to the environmental, social, and economic challenges that are faced within the region to learn more about their vision, the opportunities they see, and challenges that they have had to overcome.

It is a series that we hope will not only engage and inspire you, but catalyze you and your organizations into action. To identify a challenge that is tangible, and build a business model (profit or non) that brings a solution to the market.


About Lisa

Lisa established The ADM Capital Foundation ten years ago as an innovative philanthropic vehicle to support critical research and impact-driven approaches to promoting environmental conservation in Asia.

ADMCF has been widely recognised for its work on solutions to some of our most intransigent challenges: Our depleting oceans, the nexus between forestry and development, air quality and public health, the intersections between food, energy and water.

Lisa advises ADM Capital to shape its investment principles and provides ESG advisory services to ADM Capital funds. Lisa holds a BA degree with High Honors from Smith College and an LLM in Human Rights Law from HKU.

Follow Lisa and ADM Capital Foundation
Website:  http://admcf.org/
Facebook:  https://www.facebook.com/admcapitalfoundation/
LinkedIn:  https://www.linkedin.com/in/lisa-genasci-35ab7640/


About Rich

Driven by the belief that change begins with a single step, Richard Brubaker has spent the last 15 years in Asia working to engage, inspire, and equip those around him to take their first step. Acting as a catalyst to driving sustainability, Brubaker works with government, corporate, academic and non-profit stakeholders to bring together knowledge, teams, and tools that develop and execute their business case for sustainability.

Follow Rich
Website: http://www.richbrubaker.com
Facebook: https://www.facebook.com/rich.brubaker
LinkedIn: https://www.linkedin.com/in/richbrubaker
Snapchat: http://snapchat.com/add/richbrubaker
Instagram: https://instagram.com/richbrubaker
Twitter: http://www.twitter.com/richbrubaker

Contact Rich
social@richbrubaker.com


Full Transcript

RICH: Welcome back everyone. Rich Brubaker here with Lisa Genasci from ADM Capital Foundation. We're here to talk about working between non-profits, finance to work on the biggest problems of, that I think the Asia region is facing. We hope you enjoy this, we hope you find value and inspiration from the discussion we just had. I know I certainly did. If you did, please remember to like, share and comment.

INTRODUCTION

LISA: My name is Lisa Genasci and I set up ADM Capital Foundation for the partners for ADM Capital, which is an investment manager based in Hong Kong 10 years ago. The partners, four British partners, wanted to not just be giving in terms of their own philanthropy, but they wanted to set up a foundation that be impact driving. So right from the beginning they wanted to see systemic change in the environmental sector particular.

Initially we had a strong children at risk program, that we've morphed into the space that we saw for ourselves was more in the environmental sector because there was less work happening and the environmental sector would oversee a lot of need for change.

EARLY AREAS OF PASSION

RICH: So what are the issues that you initially came in on, drove you personally or that were align with the partners?

LISA: We started an initiative on shark finning. Because 50% of the shark fin trade was through Hong Kong and people said that we need we can't make change in shark finning. People will continue to serve shark fin at wedding. We supported initially all of our work begins with research. We supported cultural trade and market research which showed actually that people were not necessarily wedded to the consumption of shark at weddings. It was more of a sort of a habit. It was a questions of showing faith of affluence, or showing affluence and that is not so difficult to the change once people understand the consequence of the consumption. So it became an issue of consumption and how to change behavior

Rich, you have INTRODUCTION here as the title....are you sure? It is also above.
RICH: So you did the research, you identify the consumption, then how did you take it forward and what impact...are you able to look back on it hey, we had this much impact or we did this much?

LISA: In that case, we supported the research, we brought together NGOs working in the sector. Obviously, everybody has their own strategy. It's not a matter of NGOs necessarily working in the same way. Everybody has their place, which is fantastic, but we all work to divide the message so this buy consequences of the consumption. That was a main message in Hong Kong, which is a bit different than the message in China. Which is much more around cruelty.

So with NGOs, we established targeted campaigns focused around hotels, which is where there was obviously a large consumption of shark fin, wedding banquets. The other focus was companies for the official banquets. Then of course government for government events and fast forward many years later we've ended up with about 150 companies signed up to WWF corporate pledge not to consume shark fin. Then in the terms of hotels, we most of the 4 and 5 star hotels, 62% of the 4 and 5 star hotels and actually it's more now have taken shark fin soup off their menu or serve it only upon request.

RICH: How long did it take, how long has this been going on? When did you do the research? How long has it taken for this 30% reduction?

LISA: I guess we started this year, I'd have to check the figures, but we started to see the reduction in 2012-2013 Id' say and we started in 2006.

IDENTIFYING PROGRAMS

RICH: You have a lot of it issues that you work with from forestry, fishery, obviously air pollution. How do you figure out what issues you're going to work with and why not just stick with one? How do you make those decisions as a group? How do you maintain a 10-12 year commitment, I'm sure of money and of human capital to each of these issues?

LISA: We have really programs across five areas now so at quality for conservation and finance, water in China, a seafood initiative and wild life trade. But in each of these areas really we've evolved slowly I would say. As one issue... has we've seen our pick, taken interest or action or results, then we've been able to move to develop that issue and go deeper into another aspect of it. We've set up teams around each of these areas. China water risk is a good example where they could take forward those issues for us.

Where we don't see NGOs already engaged, we've been willing to step in and create initiatives sort of ADMCF initiatives that can and take the issue in 1/2 and they have run with that issue. So it's not as though ADMCF is sort of going deep in each one of these areas. We've set up teams to go deep into each one of these areas.

RICH: But how, like how from the outset how do you actually pick the issue? How do you know if you're looking at 10 things that you should go forward this one? What is the criteria that you try and layer in so you can understand? Now's the time.

LISA: We have to deal with the timing and also a sense of the people working in that space. We're not in it to be competitive. We're in it to be collaborative to work with others and to really bring together others that we feel that is the moment. We have an opportunity to...we have an opportunity to go deeper into that particular issue.

SETTING UP SUCCESS

RICH: So when you look at these, what are some of the key..and you want to have that mindset. you want to have a life after your support, after your direct involvement ends. What are some of the things you do in the beginning to maybe set that up?

LISA: Make sure that the support for the initiative...well, first we start with research. Really have an understand of what the context is and how we're going to address it, establish the theory of change. So really understand how we are going to, what the impact is going to be what we ant to see, how we are going to address that via research and make sure that you have a broad base of collaborators. NGOs, companies, government whatever is the mix that's going to help make that change.

Then what is the funding source? It's not just us. Broaden that funding bucket. What is going to be the source of funding that is going to support that for a long time? Where it's appropriate we can step back. Once we feel that something is on it's own, we don't' need to be in that particular initiative. We can step back and let it take it's course.

BUSINESS MODEL

RICH: Speaking of funding, you are the founder of the foundation. They gave you the money to start the foundation. How is your funding changed over time? Is it a continued endowment that you can pull off of and you can only use a certain percentage or does the capital growing? Or have you actually developed a business model so that you are selling reports, your selling service, like how is that evolved over the last 10 years.

LISA: The partners absorb all of the core costs of the foundation and we direct cofunding into partner projects. So that has been our model every year and certainly a lot of funders have appreciated that because they feel that their money is supporting whatever the project is. But the reality is, that does ya know limit our own growth to a degree.

So we are thinking of about what are the alternative sources of funding. So the tropical landscape finance facility we've started, I hope in the future could potentially generate all sorts of revenue for the foundation. Then we have a couple of other sort of revenue driven initiatives that could provide a source of support to the foundation in the future. But all of our information and research is open source. We believe that it should be open source.

RICH: On the funding, if you think now or maybe things that you've tried in the past, what are the pools of funding that are the most aligned to you? Are those the ones you really need over time? Sometimes you need a lot of money and you have to make a change of tact and compromise so you can get that in. What are some of the considerations you have when you are going through that? You're creating a business model after years of not having..I mean you have to have the budget, but you don't have to have the business model. How do you make that work? What are some of the core things you have to have in place in order for there to be great partnership on that.

LISA: Well I have to say we have been very lucky in that we've had that course of source of support from the partners. We've also been very lucky in that we are...there aren't many other foundations in Hong Kong that provide in then sense the same service to other US foundations or local Chinese foundations who are interested in environmental issues who want to get involved, want to see impact. We can deliver on what, we can deliver on our programs. We can deliver on action in our programs.

So they've seen us as very useful so actually we've been able to set the agenda which has been really important for us. So we haven't diverged to meet funding, funding has come to us.

SOURCES OF FUNDING

RICH: What's the best kind of funding for you? Is it corporate? Is it foundation? Is it government? Each one has different strings. Each one you can..what's been one or the best one that you're more natural to?

LISA: Most of the funding, the cofounding, has been throughout the foundations. Actually either US or local foundations. The best collaborations for us have been those where there is obviously a similar mindset and it's been an understating, a very clear understanding, again impact and what we want to see. So being aligned with our funders in terms of what the results should be has been very important and we've been lucky.

KEYS TO A GREAT PARTNERSHIP

RICH: What are some of the key things that make for a great partnership or a great collaboration?

LISA: Being aligned in terms of I think the message what you want to see. Not always how you get there because everybody has different ways of working. But understanding where you want to get to and understanding what that sort of general messages is I think is extremely important.

SCALE

RICH: What are the issues that you want to take up next and how are you going to go about expanding on the organization when you are already talking about budget verses business model?

LISA: I think we've got enough issues.

RICH: I mean is it ok to say it's enough? Or we've had some conversations about you need to constantly scale. Probably the most abused term in our entire ecosystem. What does scale mean to you in that sense?

LISA: Exactly. I thought about that a lot. I've come to the conclusion of no need. We are happy and we can be impactful in the space we are working in now. I don't feel the need for us to be a huge foundation. I would like to build more resources to be able to do more in the work that we do.

LESSONS TO OTHERS

RICH: In an ideal world, every investment group here would have their own foundation that is in hose supported in the same way. If you were speaking to someone who is looking to create a similar model as yourself, what are some of the key things you would tell that individual when they are talking to the LPs or the banks how to create a bit of autonomous unit that does the exact same work?

LISA: So it's all about the people. Make sure you hire people who care about the issues who are really have the same sort of nsync with you in terms of what it is you want to achieve. Give them space to create and allow them to take risk. Because you can't make change in this sector without being able to take risk. I think a lot of foundations forget the need to take risk.

That is the beauty of philanthropy. We can see the initiatives. We can support research. We can take risk in ways perhaps private sectors can't and we can create change that can magnify by bringing along the private sector.

TAKING RISK

RICH: You said you could take risk that the private sector can't. That's kind of the opposite of what we are trained in this space. So what, can you give me an example?

LISA: Yes. For example, the tropical landscape finance facility that we've started. So we got a very generous grant from Convergys. Which is a Canadian government supported entity that supports innovative finance. The developed initiative finance to build a team that could help us develop tropical landscape finance facility, which as I said said is..to marry a development agenda with...to drive a development agenda with private sector capital.

It would be very hard to find a fund manager who would be able to put their own money and time into developing the type of projects that we are developing around tropical landscape finance facility. It think we'll be able to show these transactions are real and the transactions at scale. These transactions are at scale will achieve what we want them to achieve and that they will have financial returns. But we needed the space to be able to build that.

RICH: Right now you're not sure there will be a financial return. Let's assume there is.

LISA: No, there will be financial return. They're being structured as commercial, fully commercial transactions, but they are difficult and complex to build as you can imagine.

SCALABILITY OF PRODUCT

RICH: If you prove the model, what then do you think is the scalability of that same financial instrument? Because at the end of the day it's a financial instrument. Do you foresee that you could label this thing and maybe more foundations, more both management groups, more banks would get involved and buy this product and maybe drive your issue foreword? Is that a goal? Or do you want to just get this one project done and show that it can be done in the right way?

LISA: First transaction which is a 17 millions dollar transaction in Indonesia benefits from a 50% U.S.A. guarantee. So, it does allow the private sector a certain comfort. So we believe that maybe in the future other transactions wont need that sort of comfort. That private sector will be more comfortable with this type of transaction that has a very clear environmental and social agenda as well as the financial return.

RICH: It's really interesting actually. It also in that sense, you really are just drawing off the financial capacity...that structuring background of the group itself marrying it straight into the issues that are important to the foundation. But I have to be honest, I'm not sure where the line is between is the two groups.

LISA: Well, on this project there isn't one. What has been amazing is also to see BMP capital market team steping up right behind us. There are structuring partner. They are arranging the green bond that will be.. is the results of...the securitization of the loans. They are selling that product to private sector. It's been a fantastic partnership for us and hopefully there will be many others. We have quite a strong pipeline of products that will sort of be following behind.

RICH: Last question following up on that. You mention that you liked having that firewall between, but in this product it doesn't seem like it exists.

LISA: No, you're talking about core funds. That was how we were established. Our offices are here. ADMA Capital offices are elsewhere, but for this particular product there is no line. We are working to the same agenda.

RICH: If that one really scales out, would you say that actually that might be the next..like that's an ideal way to go forward. Where you can bring the two organizations so close together they are actually one product and scale out as long as you remain autonomics in a sense?

LISA: I think it will be product base. Like with this product, it works well. Then as I said the 16:24 fund has a very clear environmental and social agenda. At the same time they are still our core ADM product, which work to obviously ADM Capital's investment principals. But, this is a different type of product. It needed the grant funding in order to be able to lift it off the ground. It needed the very clear sort of ENS support initially. But hopefully future transactions so we will be...it will be easier and will be smoother I guess.

RICH: Last question. How do you keep yourself focused with so many big issues? How do you keep yourself inspired by looking at so many big issues that really are, I mean there is not a lot of happy news some days. How do you keep focused? how do you keep inspired?

LISA: I have an amazing team working across all sectors. It's not me, it's honestly the team. They are passionate. They take great ownership in each of the other areas in which they are working. None of us could do any of this work without that sort of determination to make change. I would say I am at heart an optimistic person. I really do, I can see the incremental change we've been able to make. Because of the partners ADM Capital has given us that long time horizon, I can see that we can make change over time. I remain optimistic.


Francis Ngai

Dream Big, but Act Small - Francis Ngai, SvHK

In this episode of Entrepreneurs For Good, I speak with Francis Ngai about the work he is doing to build community centers in some of Hong Kong's most vulnerable areas.

Work that is difficult, but as he says more than once, while you need to have big dreams, you need to be focused on taking small steps.

It is a fantastic conversation about approaching big challenges, the role of purpose, and maintaining continued momentum through small steps.


It's important that you keep on dreaming. Dream Big, but Act Small.


About the Entrepreneurs For Good Series

Through this series, we speak with Asia based entrepreneurs whose mission it is to bring solutions to the environmental, social, and economic challenges that are faced within the region to learn more about their vision, the opportunities they see, and challenges that they have had to overcome.

It is a series that we hope will not only engage and inspire you, but catalyze you and your organizations into action. To identify a challenge that is tangible, and build a business model (profit or non) that brings a solution to the market.


About Francis Ngai

Francis Ngai is the Founder and Chief Executive Officer of SVhk. He is the Co-Founder of Green Monday, Playtao Education and RunOurCity.

Francis believes that everyone can be a changemaker. Seeing ‘ME’ as the reflection of ‘WE’, he hopes to bring together more people to re-imagine our city and pursue big dreams to make a difference to the community we live in.

Prior to establishing SVhk, Francis was the Head of Strategy in a listed technology conglomerate in Hong Kong. He graduated from the City University of Hong Kong and was conferred as an Honorary Fellow by the University in 2013. He was selected as one of the 100 Asia Pioneers by The Purpose Economy in 2014, a Young Global Leader of the World Economic Forum in 2012 and one of Hong Kong’s Ten Outstanding Young Persons in 2011.

As an ultra-running veteran, Francis completed The North Pole Marathon in 2013 and the 250-km Gobi March of the 4 Deserts race series in 2012.

Follow Francis and SVhk:
Website: http://sv-hk.org
Facebook: https://www.facebook.com/francis.ngai.90
LinkedIn: https://hk.linkedin.com/in/francis-ngai-87915831
Wikipedia: https://en.wikipedia.org/wiki/Francis_Ngai
Youtube: https://www.youtube.com/user/socialventureshk


About Rich

Driven by the belief that change begins with a single step, Richard Brubaker has spent the last 15 years in Asia working to engage, inspire, and equip those around him to take their first step. Acting as a catalyst to driving sustainability, Brubaker works with government, corporate, academic and non-profit stakeholders to bring together knowledge, teams, and tools that develop and execute their business case for sustainability.

Follow Rich
Website: http://www.richbrubaker.com
Facebook: https://www.facebook.com/rich.brubaker
LinkedIn: https://www.linkedin.com/in/richbrubaker
Snapchat: http://snapchat.com/add/richbrubaker
Instagram: https://instagram.com/richbrubaker
Twitter: http://www.twitter.com/richbrubaker

Contact Rich
social@richbrubaker.com


Full Interview Transcript

Welcome back everyone. Thank you for you very much for joining. I am here with Francis Ngai who has worked in across the spectrum of issues in Hong Kong, Very inspirational. We're talking about how your children drive you to change. To the future of millennial purpose. Then how to bring business skills to the social sector for impact. So we hope you'll enjoy this. If you do, please remember to like, comment and share.

BACKGROUND

RICH: Francis, thank you very much for taking the time to meet with us. Please do here and maybe introduce yourself and the work that you are doing here at SVHK.

FRANCIS: I am Francis from Social Ventures Hong Kong. I founded the organization since 2007. So we are practicing that philanthropy. We invest, incubate and invent social innovation in Hong Kong.

VENTURE PHILANTROPY

RICH: What is venture philanthropy? What does the impact investment?

FRANCIS: I think those are some terminologies that can explain more briefly. I think overall to access things like an applications of all good resources in the community So come capital owners they don't they prefer not just writing check. They want to participate more. I use them, their networking expertise, professional volunteers. So people with good ideas...social entrepreneurs or corporate. We try to reshuffle all these resources coming together. So we threw ourselves to always to be an applicative.

GETTING STARTED

RICH: So how did you start SVHK? Like what was your background? Why get into the venture philanthropy area when you probably had another business you were working on?

FRANCIS: I start with business, around 15 years of business or experience. Having two kids and I quit my job. So probably a lot of self interest I think to my kids future wealth. So I think that and current world is not that good. Also I think we are not using enough idea to work it out. I think we have a lot of resources in the community impacting. We will always just prefer to wait for the government to happen. I think obviously original idea that we try to do something else.

CATALYST FOR CHANGE

RICH: I know when you have children, everything changes. So, what were the major concerns you had about the world that you were like you're looking at your kids, oh my god I don't' know what I'm going to do?

FRANCIS: After having kids, you reflect. So what is the current role? What is the society? You read about some education brings about how to see some, but I think at the end of the day I think that it's how you are doing is influencing their future. So I'm asking myself, what is the most important thing to teach them. I think at the same time I am asking myself whether I'm dreaming or not. Maybe not. I'm helping some rich people to fulfill their dream, which I don't think hopefully can agree with that dream. It's just profit sometimes over purpose. So how can we turn it around? Around society we see that we're not talking about purpose.

RICH: I struggle with this. I really view business as a medium to, I wont say find purpose, but to deliver purpose. At the end of the day, what you have here is a community center. People will say, oh it's a non-profit, but it's still a business. You still have rent, you still have staff, you still have P&L, you have everything. The question is what do you do at the end of the year. When you started this, when you started getting into this, obviously you probably had a very different view of what venture philantropy or whatever. Like social entrepreneurship, whatever that it might have been. How did you start like, kind of starry-eyed, and then what do you feel now after you six to ten years of being in this space?

FRANCIS: I would say at first is static bubble that we shuffle around a lot of all that seeing philanthropy. How social investing is doing things. Just trying to form that kind of entity to do things. I think in the long journey we discovery more. I think could be summarized as the purpose. I think at first I think we all remember that. When we're doing business in doing something in the world, even non profit, they got a purpose. But ultimately we become more resources driven. We just see something that into more rich as KIPs and then we lost something else.

RICH: Now when you go back...actually I'm going to take you back a little...you talk about when you started in business. Like I started in business and was like, I'm going to change the world. I'm going to do this and this and I'm going to grow and I'm gonna grown and that's like my goal. Then you get a little bit more, practical. You start going wow, I have bills to pay, I have staff to feed. You become very practical. You don't loose your dream. You don't loose your purpose, but you definitely get into the business and it becomes a very different thing.

I found the same thing for social innovation as well. I'm' going to save the world. I'm going to help these children. I'm going to educate the elderly, whatever it may be. But then you get into the business side of things. How has your own perspective changed from really kind of idealistic into the practical? What are the practicalities now that you didn't think you had before?

FRANCIS: So I think at first I think we started off with do engine thinking. So I think social enterprise is all about social business. So we didn't think that what was one thing was more important than the other. So when we find the purpose, the social side how was the problem that we were are more cared about. I think that's it. So after that, I think we had a whole attitude on the business side. We have to make it sustainable. Make it work. Make it a public so everyone gets to know it.

So I think how do you keep the balance is not easy, but I think always and still in 10 years of journey, one thing is important, keep on dreaming. Dream big, but act small. So we hold up to with persistence on every thing we are working on. But every day we still try to think about fine tuning our model. Because we find that if we lost that dream that could keep us forever, we lost the momentum. So I think that also feeling feed back along is the passion. Where's the passion coming from? So every day I think still we are asking ourselves in the morning, why we are coming into office again today. I think that is the most important question. If we have that, we will keep on dreaming. We don't mind the niddy gritty things. We don't mind the hard work. I think if we lost it, we're done.

STAYING FOCUSED

RICH: You have a lot of different issues. You have Diamond Cab, that is kind of challenge access - wheelchair access. You have Green Monday, Meet. Is it a problem that you're all over the place? Or do you think that it would be better if you were focused on one issue? Is it part it....because you have to maintain your passion you have to move things around? Or is it that the best way you think you can get things done?

FRANCIS: Definitely a challenge on my team especially. Ten meetings in a day. In the morning you're talking about kids. But the other meetings talking about elderly. Then we move onto the climate change. So we keep on shifting. I think that is exactly our role. We don't need to be under the spotlight. Someone has to do it.

FUNDING MODEL

RICH: So you're basically investing into other entrepreneurs and their ideas and then you also start your own. Where does your funding come from?

FRANCIS: I think first the two or three of years it was my own resources, time, days, nights, kids, etc. But I think later we got some philanthropy money coming in. So I think all along I think partially we are relying on these resources to build that up because they are committed in incubating more social innovations in Hong Kong. So we are using that resources. But I think in long journey we also be our own income through some program, some incubation program. For the deals we don't ride on primarily on the profit. So I think it's not the short time we can get any repayment. I think whatever we get back, we just put back in the fund.

RICH: So are you making equity investments then? Or do you prefer debt or is it grants? Like what's your median?

FRANCIS: Mostly equity.

RICH: Ok.

FRANCIS: Grant money would say that a lot of foundations would like to do more new things now. So when we, whatever we get these we go approach them. So we invest very little in the very early stage. So if you're sustain on the prototype stage. But after that, we try to find true investment even in equity as well. But we have to be bigger equity stakeholders some times because we need to have a safe interactions, great for sure. Invest in more.

MAINTAINING FOCUS

RICH: Actually you mentioned something I kind of struggle with. They're always looking for something new. For me, the problems never really change. So how hard is it for you to focus albeit the entrepreneurs, the donors funders on just getting the current work done? Like how do you manage that?

FRANCIS: It's difficult. I think more philosophically sometimes we follow the flow. So we're seeing that one entrepreneur seeing that problem Something that we always keep in mind is that apart from the direct impact, which is confined to the scope within the entity, we always see the impact of that. The rippling effect. How that have the implications from policymakers. How with that them with an implications to the other industry people. Like Diamond Cab, there are two cabs. We get ourselves sustainable, and then another taxi licenses only. But end of conflict, 80 cabs. So like being affordable housing model, right now a couple different NGO's replicating it. Even in the media they call it...

RICH: That's okay right?

FRANCIS: That's what, that's how. So what we see right now at the juncture of ten years, we are shaping our 10 year plan. We are seeing a long journey, if we talk bout housing we talk about poverty. What kind of partners we need in that cab. Not all the things we need to invest ourselves. But we coordinated as one cabs. We need Avengers instead of Iron Man.

RICH: But what fuels your continued dreaming? You start off you're really passionate, you meet the challenge, but you are still executing it on a daily basis. What has been your impact so far that you look back and go I feel really proud about this? Then, do you still look in your kids eyes and go I still have a lot of work to do?

FRANCIS: I still do a lot. I think that learning from the journey whether change system or change mindsets. So like the interview today. I think using the small works that we have, how can we spread it out? Changing more minds is so important. I think maybe the ultimate goal is changing more mindsets. So I don't see that we need more people quit their job to be social entrepreneur is hard. So why we're working on business 2.0 or something else.

I think there are a lot of entrepreneurs can work together. So we're definitely in the world I think the society we're migrating from 1.0 to 2.0. If 1.0 is more resources drive in, 2.0 is more about a shared mindset, more value driven.

RICH: But do you see that happening? Are people more shared mindset now? Or are they getting more...cuz we have so much challenges of where we're all pulling back from each other. Is it...

FRANCIS: Main streamers do not. But I think all the movement start with quite a few city people like us. So I think we if we don't work it now, 10 years later when my kids are really grown up they will not see it. But I would say that at least the biggest gain that I have in the last 10 years...also feeling all my passion as the people that we see. I suspect that the mayor all the people got some good DNA in them. It's just that we don't have innovated enough to think about some platform for them to come up.

RICH: Well, and what the way to catalyze that? Like, how do you tap into that hidden gene or into that thing that's just sleeping for right now? How do you drive it? Like what does it take?

FRANCIS: Baby step. Green Monday. We are now asking people to be full time with charity. Although it made more sense for one individual for their health and things. I myself am a vegetarian, but I think we just take one day. Just start with one meal. By the way it's a beyond burger. It's delicious. Its fulfilling. So after that, we talk about you create an image. Use marketing.

If a marketing company can get someone to buy a bag, which is manufactured in Shenzhen, but paying several tens of thousands of dollars. How can I...can we use the same thing to your fake people to get them on board to try on hew things first? But after 10, you tell them oh by the way you're saving the planet now. All of them will become entrepreneur. They will internalize what the good habits. So I think these kinds of things is what we're learning now.

But I think all the more we start with small. Start with something small. After the engagement, they become part of the adventure too. That's more important.

RICH: Okay. Kind of going back to your marketing. What are the tools that you found most reliable. Like from your old days in marketing, what do you go back to every day in the office...yeah, this is what I used to do for this client? We can use that here. Like are there some standards tools that you've continued using.

FRANCIS: I think not very formal. I think at the end of the day I think it's more result of thing But I think one thing that we use a lot when I am at the time of them, in the business world, I also discovered one new trend that I invented some model is on the collateral collaborative marketing tracking. Collaborative strategies so that we always apply. Basically these partnerships. Especially social entrepreneur, I highly encourage you to try build more leverage.

In the past hierarchical world, you find resources, feeling somewhat intermediary finance and partners and paying them and it worked a lot. I think not now. We're all in a circular positions. Then we come out in the middle where the value people came around. There's no high and low. We don't back for resources. They just come. They're fulfilling their own self resources and self interest. So I think we all fulfill thinking about the mutual benefits. We got corporate, they're funding it through charity anyway. But I think it's good for your brand.

We work on something that they don't demand for even. But for some company, people can come in here, they're just get a service. I don't know we take them through to empower them later. I think it's kind of more...think about neutral. So everyone we collaborate, we think about what is their benefit first.

RICH: What are the resources do you think that we're missing right now in the social space? Like if there's things that you could attract business people of any stripe or something else. It could be government, any other like what do you think that we're missing? What do you think that could take our challenges and solutions to scale?

FRANCIS: If there is one thing you want me to mention, I would say we have need to encourage more links. We need to build more links. So I think we are not having innovative platform enough to aggregate resources. So ticks around.

So I think for example, Green Monday. I take that example that we can both understand more clearly. So I think when we work with some caterers and we think about ways for them to participate. So when we work with some food manufacturers, we think about some of the waste. So if you create more different vehicles, so that could help them to come in, come on board much easier.

So for fund raisers, even. I would say talk to some vendors. If your funding directly on the impact or _______ (16:07) social enterprises, we can choose to fund the links. How can you encourage them to work more with the corporate.

So for some early pilot in some innovative, I always called them infrastructure innovation. So when you need to invest into innovation infrastructures because right now we're at the juncture of migrating to a new world, if there's an new world. But if I think if we do not have enough links, we cannot carry over all resources for people to come on board. That's so much important.

TALKING TO DONORS

RICH: I was wondering....people really don't want to invest in the infrastructure though. They want to invest in the shiny building, not in the pipes, the wiring. Ya know, they don't' want to invest in research. They want to invest in the program that has no research. Like they want to fund the idea, not the amount. So how do you, I mean, because you come from the business world, because you have your own resources, is that where you spend...you build the foundations and you don't have to worry about what the donors want?

FRANCIS: We definitely get better language to talk to them. We know people, but I think most important thing is it makes sense for them. So I think it's around, I will say that. The most important thing is the kids. How can you illustrate that with them. Like especially we imagine a lot and infrastructures.

We need to go back to the funding and educate them and share with them. Tell them if that works perfectly. So I think without case, it's all empty talks. By the way I would say that younger generations for some big families they're changing the mindset. They don't believe in the name on the building anymore. They are migrating into a new generations. Within 10 years, I would say a lot of the younger generations would take over.

RICH: I think that's actually how we met. Through the family business network. Probably I think way back when way back when because I spoke with you at Bernie's event. So actually that kind of brings a really interesting point. Like the next generation of Hong Kong. Hong Kong is a city run by families, largely. At least in the business world. As you mentioned a lot of the names on buildings. Albeit the business school or the different buildings that they own.

THE NEXT GEN

RICH: Five, ten years ago the second gen was either trying to leave the family business, but now they are trying to come back. I know a few people are coming back. Like what are they doing? Why would they want to change now? What do you seeing that makes them want to change the family business?

FRANCIS: I would say no matter what is their background, they are all citizens of Hong Kong. They are all people involved. So I would say the millennials especially, when they grown up, they have a lot of education on a sustainable world. On how to be build a better society, it's in their blood.

So I also think they are documented entrepreneur. They're not that resources driving. They're not that profit driven. They see more differently. In terms of wealth, I think they would think that I'm ok for the next, next six generations. So ....That number is just a number in the game. So I think for them, the more fulfilling thing is while they are doing their own business or doing their own land. They want to see the real impact.

So I think its shifting, but again I would say that we need more infrastructure. More different ways. Sometimes more cool way when we talked about charity of philanthropy, sometimes its way too old fashioned. So we need to move on as well.

RICH: Thank you very much for your time. You have a line of kids lined up outside. I don't want to hold them out! They're like I want to color. Thank you very much for your time. Very inspiring.


For more interviews from the "Entrepreneurs for Good" series, check out the playlist here.

Stay tuned for more clips and full interviews in the coming weeks.


Scott Lawson

Impact Investment and Inspiring Entrepreneurs | Scott Lawson, SOW Asia

Through this episode of Entrepreneur for Good, I speak with SOW Asia's Scott Lawson,  about his experience as an investor looking for entrepreneurs, and organizations, whose mission, and potential to scale, are aligned with their investment thesis.

It is an interview that I feel offers a lot of insight, particularly for entrepreneurs who are looking to learn about the mindset of investors, but is equally interesting (AND VALUABLE) for investors who are just entering the impact investment space.


"Only do this if you cannot do anything else. If there is a burning issue or problem in your mind that keeps you awake at night that you have to address, then by all means do that. But understand that this is extremely challenging, risky, time consuming work and it can often be a lonely journey as well."

- Scott Lawson, SOW ASIA


About the Entrepreneurs For Good Series

Through this series, we speak with Asia based entrepreneurs whose mission it is to bring solutions to the environmental, social, and economic challenges that are faced within the region to learn more about their vision, the opportunities they see, and challenges that they have had to overcome.

It is a series that we hope will not only engage and inspire you, but catalyze you and your organizations into action. To identify a challenge that is tangible, and build a business model (profit or non) that brings a solution to the market.


About Scott Lawson

Scott Lawson is the former CEO of SOW Asia, a Hong Kong based, donor supported charitable organization working at the intersection of social enterprise and impact investing. SOW Asia invests in organizations and people intent on creating positive social or environmental impact.


About Rich

Driven by the belief that change begins with a single step, Richard Brubaker has spent the last 15 years in Asia working to engage, inspire, and equip those around him to take their first step. Acting as a catalyst to driving sustainability, Brubaker works with government, corporate, academic and non-profit stakeholders to bring together knowledge, teams, and tools that develop and execute their business case for sustainability.

Follow Rich
Website: http://www.richbrubaker.com
Facebook: https://www.facebook.com/rich.brubaker
LinkedIn: https://www.linkedin.com/in/richbrubaker
Snapchat: http://snapchat.com/add/richbrubaker
Instagram: https://instagram.com/richbrubaker
Twitter: http://www.twitter.com/richbrubaker

Contact Rich
social@richbrubaker.com


Full Interview Transcript

I'm Scott Lawson. I'm the CEO of Sow Asia. I've lived in Hong Kong for 16 years. I first came to China in 1981 as a undergraduate student and I've been in love with the Chinese culture and people since then. I came to Hong Kong in 2000 to serve as the pastor of a church. In 2008, I moved over to join the South Asia team.

SOW ASIA

Sow Asia is a Hong Kong based charitable foundation investing in the individuals and organizations that are creating positive and scalable social impact.

Sow Asia was founded in 2009. The founder needed to make a decision whether to establish it as a fund or a foundation. We decided that the focus needed to be on impact, so we chose to establish it as a foundation. As an organization, our priority is impact. We are of course trying to do that through impact investing to create the sustainability and scalability that Asia is going to need to address the big challenges it faces.

INVESTMENT STRATEGY

Sow Asia was founded in the same year, I believe, that the term Impact Investment was coined (2008/2009). So we really were amongst the pioneers in this part of the world. When the term was coined, there was obviously a great deal of the excitement and anticipation around a concept that people were really struggling to put words and ideas to. We've been a part of that development process in this part of the world.

I spent my first two years really traversing China and Southeast Asia looking for investment opportunities. Honestly we struggled to find opportunities that we thought were investment ready. That began, that began a deeper conversation internally to the organization about our relevance and about the impact investment space as a whole. Off the back of that long internal conversation, we made the decision to engage the market at an earlier stage. Really looking at younger organizations that we thought had all things equaled, the potential to grow. But, we're going to need some capacity building support to make them attractive for investment.

Because the space is still nascent here in Hong Kong and in Asia, we have had to cast a wider net in terms of the opportunities we're looking at. We are interested in the environment sector, the education sector and the healthcare sector.

WHO THEY WORK WITH

Sow Asia is uniquely placed as an organization that seeks to both invest, but is also functioning actually as an intermediary helping to bring together supply and demand in a market place that doesn't really yet exist. So on the demand for capital side, we work closely with inspiring and aspiring entrepreneurs who have solutions, have organizations that are creating positive social impact. It's actually the most exciting part of my job and the greatest privilege for me to work closely with these entrepreneurs. Many of whom are young, but as we are seeing, we are seeing more and more mid career people coming into this space and really applying their experience, their abilities to engage the social impact space.

What we try to do is focus on organizations that have reached the proof of concept level. They have a couple of founders, they have a business model, even if we will change it with them. They have ideally some revenue as well.

EARLY LESSONS

Over the past three years, we have worked with closely with over 40 social enterprises. Again, across a number of sectors, the environment, education, healthcare, poverty alleviation. It's hard to generalize about the entrepreneurs. Some of them come from commercial background, some of them come from a more non-profit background. We have learned in the process that both non-profits and for profit organizations can be successful in achieving their mission and being able to scale their impact. So this has been a great learning for us in terms of how we understand and how we can engage them and help them to grow their ability to scale.

INSPIRATION

The Impact Investment space faces a number of challenges. I liken it to the old story about the five blind men and the elephant. We have conversations about impact investing and realize that although people are all using that term, we may actually very well be talking about different things.

So one thing that we have become much clearer on, is the need to not necessarily define that term, but to define what ones intentions are around that term. What is one seeking in terms of a return? Either financial or the impact of social or environmental.

There are a number problems across the globe that we run into again. On the one side, we face a continued lack of demand for Impact Investment capital. That to say we are not really seeing enough investable opportunities coming into the market place. At the same time, we are also seeing a lack of interest and attention and awareness on the supply of capital side. So whereas I see in Hong Kong, a number of individuals who raise their hand and say yes I'm interested in Impact Investing as an investor. In fact, they are really not doing that. The reasons are clear, but I think there is certainly a gap between supply and demand as they currently exist that needs to be bridged. It's one that we are trying to address at Sow Asia, but that I would say is our biggest challenge going forward.

Those who are interested in investing into Hong Kong projects, find that even the most interesting opportunities are limited in their scalability. Hong Kong is a big city, but relatively speaking a small market. So there are have not been a lot of opportunities for people who want to invest locally and scalable impact. The bigger problem, here in Hong Kong, but I think globally is that what the space really needs now to bridge that gap between supply and demand is what I would call high risk, low return capital. Which is something that any rational investor is not going to appreciate or understand. This is why we believe there is a need for what has been called flexible finance, capital that is more philanthropic in its nature that would be that early first loss funding that allows for these enterprises to grow and creates real impact investment opportunities going forward. We have to identify that capital for the missing middle.

IMPACT INVESTING IS DIFFERENT

Potential investors bring to the conversation a number of preconceived ideas about the impact investing space. Especially if the opportunities that they are looking at are self described as social enterprises. Often times social enterprises are understood to mean a lower return financially. So immediately they're considered with I would say, greater suspicion, greater skepticism, unless the investor has said that their intention is to invest in the impact. Most investors in Hong Kong and I think elsewhere are very much interested in the idea of receiving a certain level of financial return as well the impact. But those opportunities haven't come into the market yet.

LABEL & MODELS MATTER

Social enterprise is an umbrella term that can be used to describe a number of different organizations with a number of different purposes. If we're looking at an opportunity that does have the ability to compete and scale in the commercial market, then we would advise them not only to, not describe themselves as a social enterprise, but to build their business model accordingly. In some instances, where the revenue might include earned income, but may also include government subsidies, and rightly so because these are opportunities that require government support, then I think the social enterprise label is more appropriate, if you will.

One of the things we have built into our capacity building work is immediately identifying with the social entrepreneur, what their end game is and helping them to understand a strategy around that end game and to really leave as much as possible, their preconceived ideas about how this should be working just to sent those aside. So often times we find social entrepreneurs have a preference for earned income, which is not a bad thing per say. But again, it depends on what they are trying to achieve, the market which they are trying to operate, the stake holders or clients which they're trying to serve. For instance, a social enterprise that is addressing a challenge around poverty alleviation, we've become clear that most of the models don't work or don't work well. By that I mean they are not scalable.

In Hong Kong, many of the B-C social enterprises struggle to reach sustainability because they're competing against every other coffee shop in town, for example. So we're interested in working with organizations...really rethinking their business models from the inside out. Thinking about b2b models for example. B to G to C business to government to consumer or client. But it means being willing and able to look at everything again including the legal status for a profit, non profit, in light of the end game or the overall strategy objective of the social enterprise.

ADVICE TO ASPIRING ENTREPRENEURS

My advice to any potential social entrepreneur, first of all I would say only do this if you cannot do anything else. If there is a burning issue or problem in your mind that keeps you awake at night that you have to address, then by all means do that. But understand that this is extremely challenging, risky, time consuming work and it can often be a lonely journey as well.

Secondly, I would say that most of the social entrepreneurs we talk to, do have a great passion about their solution and because they have a great passion about their solution, they automatically assume that everyone else also understands the value of their solution. But in fact, you need to demonstrate that. You need to prove that and we will ask you, if you work with us to prove that to us. You make hypotheses about your value proposition, your customers, we want you to prove that to us. I think that is a growing process and a strengthening process for you to get real about where this product would actually be demanded and creates a real value in the market place.

HOW INVESTORS CAN IMPROVE

I would describe my journey with Impact Investing , I would liken it to repairing in the airplane as we fly in it has sort of exhilarating, but also slightly scary feeling at the same time.

When it comes to the Impact Investment community I'm not sure it really exists yet. We have a number of people who have expressed interest. They come to the Impact Investment space with a point of view, a certain mind set. I think we are still trying to understand one another. We're trying to figure out, for example. How we can communicate across different mindsets, across different boundaries. We are also trying to figure out how we can effectively measure social impact in a way that will be necessary if we are going to grow the space.

It's incumbent upon organizations like Sow Asia working with strategic partners, like JP Morgan for example , or the Hong Kong government, to be intentional about building the eco system that I think is going to be necessary to grow the impact investment space. We've done a pretty good job her in Hong Kong about providing support for social

enterprise, investment opportunities from seed stage straight on up. Sow Asia happens to serve the growth stage market. We need to continue the work with investors well.

At the end of the day, my sense where in Hong Kong is that there are a lot of people who are not willing to engage until they understand it and my counter argument is we are not going to understand it until we engage. We are going to need more people who are willing to jump into the space as both entrepreneurs and investors, make some mistake, learn in the process and build the space accordingly.

PAIN OF INACTION WILL DRIVE ACTION

Hong Kong, the city displayed behind me, is one of the most prosperous in the world, in this world. At the same time, nearly one in five Hong Kong residence live below the established poverty line. There are one in five adults in Hong Kong who are not getting enough food to eat every day or experience what we call meal gaps. There are a number of issues in Hong Kong related to poverty, specifically around housing, around healthcare, and around food. Basic services that any civilized city, such as Hong Kong, should be able to provide for its citizens. We need to address those issues.

The other obvious change in Hong Kong is the demographic bulge and the rapidly aging population in Hong Kong as we have seen in Japan and as we will see in China as well. There are currently inadequate facilities for aging, for the aging population and also its not just about healthcare facilities, it's about some of those things that we take for granted. The companionship, battling loneliness and depression. There are a number of places where innovative iterative solutions are really going to provide a huge difference in a place like Hong Kong.

There are a number of complex questions about how we can move the Impact Investment space forward. It may be that its really not going to move forward until the pain of not acting, of not doing because more acute. Whether we are talking about the environment, whether we're talking about the income gap in Hong Kong and China, the education gap, etc. Those problems are only going to increase. The need for Impact Investing is only going to increase as we realize that neither traditional charity or traditional public resources are going to be sufficient to address these issues.

In terms of the first mover, my sense at this point is that the government certainly has a role to play. We've seen private capital expressing an interest, but the first movers are likely to be those who are more philanthropically orientated who can provide that first lost capital. Also, the thought leadership that is required to begin to move this space forward by creating examples that work and really, I think, instilling a new kind of imagination into the minds of people about what is possible through the Impact Investment model.

WHERE IMPACT INVESTMENT IS WORKING

We already know that the Impact Investment model is performing well in particular sectors. The agriculture sector, for example, across less developed countries in Asia and Africa. For example. Its working in clean tech or green tech for opportunities that are perhaps more socially oriented. I think there's going to be a lot more activity and a lot more growth around solutions, innovations with regard to healthcare and education as the cost of education continue to spiral really beyond the means of most people in Hong Kong and that gap opens, I think, you're going to see a lot of innovation around those solutions as well.

The other obvious one for all of us in Hong Kong would be around the environment as well and this is a place where an enormous amount of work is to be done. We two years ago made an investment into a small recycling company in Hong Kong. Really the only company in Hong Kong that is recycling glass sand plastic, believe it or not, and this is a company that is experiencing some growth, but I think in the next year is gong to be well-positions to really grow and create some positive impact in an area of great need in Hong Kong.

STAYING INSPIRED

I've long believed that each of us has really one fundamental binary decision or choice and that choice is between hope or cynicism. And I think it's one that we need to, I need to make almost every day because there's obviously a lot of evidence to suggest that cynicism is well-placed. But I'm a father, I am someone who is attracted to big challenges of someone who fundamentally believes that although the impact investment space isn't working in an optimal fashion yet, it has to work. That it is indeed our only solution that bringing more private capital and investment performance into organizations, movements that are creating positive measurable social impact.

GOODBYE AND GOOD LUCK HONG KONG

I've been at Sow Asia for nearly eight years. I'm stepping down at the end of June to return to the US. I leave with very mixed motions. I'm obviously excited about returning home and being closer to family, but Hong Kong is a huge part of who I am and...I, looking back on my experience, I obviously would have liked to have done more. I would like to have seen more deals done. I now understand that like these extraordinary buildings behind me, there's a lot work that needs to go into building the foundation before the structure can actually come up. I understand that we've actually done a fairly good job at Sow Asia at building the foundation and that's not just us, but our desire, our willingness to work with a number of steak holders in Hong Kong to really develop what I think is a robust ecosystem to support the growth of the entire space.

We face some real challenges. We need more investable opportunities, which requires smart, young entrepreneurs coming into the space as opposed to going into investment banking or other opportunities. That's going to happen. I think they need to know as they come into the space that they're going to be properly supported, they need to do the heavy lifting themselves, but I think they need to know that Hong Kong is a place where if they work hard, if they are true to their mission, that they have a solid chance of actually growing their enterprises.

It's my conviction that great social entrepreneurs need the best support we can provide for them.

Hopefully Sow Asia will continue to do that.

I certainly hope that that is the intention of my successor and I wish him or her all the best.


For more interviews from the "Entrepreneurs for Good" series, check out the playlist here.

Stay tuned for more clips and full interviews in the coming weeks.


Annie Chen

Impact Investors and Investments in Asia | Annie Chen, RS Group

Introducing our latest interviewee in the Entrepreneurs for Good interview series: Annie Chen, founder and chair of RS Group.

Before terms like “conscious capitalism”, “philanthro-capitalism”, or “blended values” began floating around in conversation in Asia, Annie Chen was developing a new strategy that has broken the mold in the industry.

Impact investing is about providing the support for others’ endeavors, backing a powerful cause, concept, or innovation. It’s requires the ability and willingness to look beyond short-term growth for a better long-term future.

However, the realm of impact investing opens up another, socially minded approach to business. These investors don’t stop at donations, charities, and fundraising – and especially in China, this kind of outright philanthropy carries a unique set of connotations.

 

“If enough people actually engage in thinking about how, through conscious and intentional placement of their capital, they can invest in the future that they create… it's only when more people do it that we have a chance of transforming the system.”
– Annie Chen, RS Group

 


HER JOURNEY IS ONE OF CONSTANT LEARNING, PATIENCE, AND COMMITMENT TO VISION.


About The Entrepreneurs For Good Series

Through this series, we speak with Asia based entrepreneurs whose mission it is to bring solutions to the environmental, social, and economic challenges that are faced within the region to learn more about their vision, the opportunities they see, and challenges that they have had to overcome. It is a series that we hope will not only engage and inspire you, but catalyze you and your organziations into action. To identify a challenge that is tangible, and build a business model (profit or non) that brings a solution to the market.


About Annie Chen

Ms. Annie Chen is the Chair of RS Group, a family office with a focus on sustainability. RS Group makes investments and grants following a “blended value” approach that ensures its total portfolio can make a lasting and positive impact for future generations.

Ms. Chen believes that one of the most pressing challenges of our time is moving the planet and its inhabitants towards sustainability. To align her values with her investments, she has committed her financial resources to socially and environmentally responsible investing. She also dedicates her time and resources toward social and environmental causes with the potential for generating positive systemic change and sustainable development. Believing the potential for change through social entrepreneurship, she is working to enhance the development of social entrepreneurship in Hong Kong and Asia.

Born and raised in Hong Kong, Ms. Chen obtained her BA from Brown University and her LLB from Columbia Law School. 

Follow Annie and RS Group
Website: http://www.rsgroup.asia/
Facebook: http://www.facebook.com/rsgroupasia
LinkedIn: https://www.linkedin.com/company/rs-group-asia/
Twitter: http://twitter.com/rsgroupasia


About Rich

Driven by the belief that change begins with a single step, Richard Brubaker has spent the last 15 years in Asia working to engage, inspire, and equip those around him to take their first step. Acting as a catalyst to driving sustainability, Brubaker works with government, corporate, academic and non-profit stakeholders to bring together knowledge, teams, and tools that develop and execute their business case for sustainability.

Follow Rich
Website: http://www.richbrubaker.com
Facebook: https://www.facebook.com/rich.brubaker
LinkedIn: https://www.linkedin.com/in/richbrubaker
Snapchat: http://snapchat.com/add/richbrubaker
Instagram: https://instagram.com/richbrubaker
Twitter: http://www.twitter.com/richbrubaker

Contact Rich
social@richbrubaker.com


Full Interview Transcript

Annie: My name is Annie Chen. I am the principal of a mid-sized family office that's based in Hong Kong, called RS Group.

For the last six years, we have been on a mission and on a journey. And our hope is to become a catalytic force in transforming our economic system so that it doesn't jeopardize the well-being of the planet or the people, but will actually us towards a path of sustainable development.

Getting Started

Annie: I did have a prior career in life as a tax lawyer. That translated very well when I moved into the family office that my parents set up. And so I was actually bringing my skill set into play by helping my own family create the appropriate legal structures to do a wealth-management setup that would achieve all the goals that family offices are supposed to achieve. A preservation of capital, and good, smooth transition - or smooth succession – plan, and also to do philanthropy.

Six years ago, I think I realized out of many years of working in that larger family office that we never asked ourself the question of “why we were doing it.” We were working under the assumption that “Well, that's what family offices do.” And I decided that there has got to be something more. And I was trying to find the meaning and the values behind doing it.

And so when the opportunity came, and I had to take responsibility for my own portfolio, I wanted to try to come up with a way of managing my capital that is in alignment with my own values.

Early Challenges

Annie: In one respect, I was very lucky, because my my parents are actually very unusual in the sense that they're very democratic. And they have never interfered - I had to take responsibility for my own pool of assets, and I had relative freedom to develop it how I wanted. The challenges really came from not having the - not being able to find people with the right expertise to help me in Asia.

We started with going to the banks, which is typically where you go out in Asia when you say “Well, I want to invest responsibly. So help me find the solutions.” And six, seven years ago, I have to say: Banks didn’t understand. They didn't know what the principles of responsible investing meant, let alone be signatories.

They had some product offerings that they were trying to sell - like, “Oh, we have water fund,” or “We have a solar fund.” But I was looking for a more holistic approach to investing. And it wasn't until I found an advisor based out of Europe that we actually start making progress towards building a sustainable portfolio.

All right, because we take a portfolio approach, we actually invest a lot through funds as opposed to directly into projects. The space where we did the most in terms of direct investments would be in Hong Kong, where we obviously are more familiar with the landscape, we are more familiar with the players. And what we decided to do there was, we wanted to encourage the building of the field or ecosystem for impact investing.

And for investors to be able to impact investing, obviously you need the projects. You need the social enterprises to invest in. And so we did a few things. We invested in some new initiatives that had no track record - for example, Social Ventures Hong Kong. I think we were one of the first batch of investors into their efforts, knowing that it would be high-risk.

So what they brought were a number of social enterprises that they incubated - but at the same time, we weren't simply investing through them into these social enterprises. We were also investing in the team at the SVHK who were trying to promote this idea of social investing, social innovation.

And even though they didn't have a track record, we were hoping that these projects eventually would be self-sustaining and might even return some capital that you can then re-invest - this whole idea of patient capital, but then recycling your dollars. We were hoping that would happen, but there was no guarantee. But we felt that in order - if nobody played, if nobody took the first step, you would not have a pipeline.

So we tried to invest strategically in a few places to start creating that ecosystem and community. Another example on this theme would be - we contributed to the creation of The Good Lab, which created a space for social entrepreneurs to exchange ideas, and to just come together.

And it's hard to say exactly what the impact of that was, but we felt that with some of the players who were supported during those early years so that they could actually grow team, grow talent, and grow projects. I think there is a lot more experiences being created out of them that would enable more people to experience what it means to invest in a social enterprise.

Well, it actually - there are numbers. I'm just not a numbers person, so I tend not to talk about them. But in our report - the impact report that we put out a few months ago - we actually try to be quite transparent about not only our journey, but the projects we invested in, and how we invest in those projects.

I know the report isn't for everyone, because the way that we look at our investments in taking a portfolio-level lens, rather than an individual investment lens, you tend to lose people because they're not all in that situation of looking at their entire capital that way. But we do share, in that report, our financial performance.

Maybe the differences in the way that we set our target - most people would say, “Oh, well we want to maximize our financial return, the highest that we can get.” How we started by looking at what we want to earn on a financial level is: How much do we need to sustain ourselves? How much do we need to generate to sustain our team, our activities, so that we aren't going to run ourselves into the ground?

So we set ourselves a relatively modest target that would be sufficient to cover our expenses, if you will. And our expenses would include our own activities, our team, as well as our grant-making. And we've achieved that objective.

I don't think my job is to tell other people how to do it because I haven't gotten my own learning journey in this. I think the strongest motivation has to come from within, not from what other people tell you you should do. If they don't find that interest, they don't find that passion, they don't find that motivation within themselves, they'll find it very easy to give up - or just stop doing it.

And I think the reason why we've been at it for so long is because we truly believe in it. And not only that, but we feel that if enough people actually engage in thinking about how, through conscious and intentional placement of their capital, they can invest in the future that they create - it's only when more people do it that we have a chance of transforming the system.

I think it has to - the conversation has to start from, if not values, then the question of what it is that you're trying to achieve. What is the problem that bugs you that you want to solve through impact investing? Get to, really, the issue that that motivates them, and then start building up from there.

So if this is the problem, let's look at the problem. What are the - are you trying to just treat the symptoms of the problem, or are you interested in the root cause? And then you start looking at – well, if that's the root cause, what are some of the possible solutions? And how does impact investing play into this, versus the philanthropic route, for example? Or, does it take both?

Whoever is interested in this space really have to ask themselves the hard question, which is “How much do I want to invest myself into learning about this?” We didn't - we started from scratch. But I did a lot of research and educating myself.

Whether it was through just Google searching stuff, “what impact investing was”, reading all sorts of reports that other people generate, the research that they've done, feeling overwhelmed - but still intrigued enough to want to wrap my head around that. Did trips, went to conferences, met people, made visits, so that I can see - really understand different viewpoints and what other people are doing.

So you've got to invest time into the learning, and not expect that, “Oh, I just make an investment, and we'll deal with that problem.” A lot of times, I think in the impact investing space, what has made it less robust than it could be is simply the fact that people are too busy to invest a lot of time.

Fear and Inspiration

Annie: I’m actually very much motivated by fear! Yeah, so of course there are the inspirational elements, but I think I'm first motivated by “fear”, in terms of really not knowing where climate change will lead us. I think we as a human race, as clever and intelligent as we think we are, we haven't really evolved to be able to really do - make very smart choices. And so I'm fairly pessimistic about where the world is headed.

I worry a lot about the future that my kids will face, and the problems that they will face. But that said, I think one has to have hope. We wouldn't be doing this if we didn't at least have some hope that, well, we can still change things for the better. So I think that's where the inspiration comes in. But no, first and foremost, I think I’m motivated by fear, unfortunately!

We are trying - we haven't perfected anything yet, but we are trying to invest – see, the phrase that I use was “We're trying to invest in the future we want to see, or create.” Because every one of us can only do so much, right?

We see the problems with capitalism in the way that it has been operating for the last 50 years. We know that it's a very powerful system, but it's broken in places. And what we're trying to get people to see is that capital markets are still the most powerful force around if you are looking for big-scale transformation.

So the challenge, then, is how to shift the capitalistic system so that it actually works towards making progress and making the world a better place, rather than contributing to problems. So, I mean, that really to me is the beginning and the end of our quest.

Finding the Transformative

Annie: I think we do look for the transformative factor in what that proposal is. We are less interested in enterprises that produce some useful results, but are limited in terms of scale. If it's simply about – it's something that other people have tried, it's just about doing it “better”, executing it “better” - we're less interested.

We're interested in bigger ideas, but done strategically and in a way that eventually could bring very significant changes - either in behavior or in the markets. So those are few and far in between.

And that's also part of the reason why we don't do a lot of direct investment, because you could - it calls for a lot of resources, from the due diligence to the monitoring, and there are a lot of things really with not within your control, and you have very concentrated risk. So we prefer to diversify through investing funds. But we are interested if the right opportunities come along. But like I said - for some reason in Hong Kong, we find very few ideas that are truly transformative.

Well, I think we need everything to change, right? Entrepreneurs may eventually become the multinationals. It might take time, but even the multinationals now started somewhere, right? So we don't say, “Oh, it's only the really determined, passionate, creative social entrepreneurs that can make change.”

No, I think we need all kinds of change, we need change to happen at a much quicker pace if we're going to make enough progress. So we need the multinationals to play a la “shared value”. If they really transform themselves into businesses that put squarely the question of “value” - and not shareholder value, but value to society first - well, we need those, too. And small/medium businesses - they actually form the majority of our communities, so we need them to play as well. So we need everyone to pitch in.

Everyone is a Change Agent

Annie: I think different impact investors - that's just one hat that they wear. They could be a business owner. They could be an employee somewhere, but they have some money to invest, and they want to invest it for impact. They could be large corporates wanting to start a new business line.

So it doesn't - so “impact investor” doesn't describe just one type of animal. They can come from everywhere, they can come from any different type of background. So I think it's really the mindset, is that if you truly believe that you can invest to generate values – and by “values”, I mean not only financial value, but social value and environmental value.

If you believe in that fact, then there's no reason why you wouldn't question, say, if you're a business owner, then “How do I create value – social, environmental, and financial value – through my own business?” Or if I'm an employee, I would ask, “So how is the company that I work in generate all those values? And if it's not, and if they only think about the financial value, am I in a position to also be a change agent? To start asking questions, like ‘Where is the environmental value that we're creating? Where is the social value that we're creating as a business?’”

So I find it interesting that people try to pigeonhole impact investing as just this one thing and kind of miss that, if you buy into impact investing, then you’re, by definition, buying into the fact that investing generates not simply financial returns - but that it could have possible positive social and environmental value generation. And if that's the case, then why shouldn't that apply across the board to all kinds of businesses?

I think, probably, younger people get it more easily - especially if they have not been already brainwashed into thinking that, while you really can't jive financial value generation with the social and environmental value generation, there's still some of those around. But by and large, I think a younger people either get it or want it to be true.

But not a lot of them are in positions of authority or power in order to do enough impact investing to make significant change. This is an overgeneralization. I think in different places, the transitions - or the succession - is happening at a different pace.

And I'm not - and I don't think that age or what generation you come from defines you in the sense that you really can't see outside of your own experience. I think everybody has the potential to look beyond that. It's a question of: Do they have the motivation? Do they have the time? Do they have the interest in looking beyond that?

If you want change to happen quickly, then obviously, those who are in positions of power are the people that you want to influence and change. But by definition, they are also the most difficult group to change, because they are in those positions because they benefited from the way the current systems work. So why would they want to dismantle that? It takes some courage, and take some, I think, insight to want to do that. So I don't have a good answer!

Some Parting Advice

Annie: I think, first of all is: Be honest with yourself as to how committed you are to get on this path. Because if you want to follow through, it will take a lot of effort, and it will take a lot of time on your own part - and resources, if you want to do it properly.

The second thing would be: Find others. There’s no need to do it by yourself and reinvent the wheel. Read our report - we do share our entire journey there, so maybe there's some bits of information there that could help make that transition easier for you. And find not only examples, but people who can actually go on the journey with you. It makes it a lot more fun.

And I guess the third thing is: Develop a sense of urgency. I think, by far, the biggest difference between people who've gone down this path much faster and further are the people who feel that there's an urgency to do so. If you think that, “Oh, this is a nice thing to do, but we have plenty of time,” that's your choice. But I don't think the world can wait.


For more interviews from the "Entrepreneurs for Good" series, check out the playlist here.

Stay tuned for more clips and full interviews in the coming weeks.