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I HAVE always been something of a sceptic when it comes to "social entrepreneurship" and "socially responsible investing" (SRI).
Don't get me wrong: I understand the logic behind the concepts, but I also worry that they very quickly become a "product" to be sold, rather than having the supposed impact.
My argument has always been around making these things sustainable, and ensuring that the money that can flow into the sector does so in a sensible and consistent way so that the organisations which are being supported don't fall over if they lose a major investor.
For instance, I was in Carletonville over the weekend distributing some food and blankets collected by the Young Adult Portuguese Society (YAPS). I left there with the concern that while collecting this stuff had been a great deed, it would be consumed in a week and then there would be a gaping hole until the next donor came along.
There is never a consistent source of investment into the community to ensure that when its members are uplifted, they stay there.
A couple of weeks back I took a closer look at the Newfunds Shariah Top 40 Index exchange-traded fund (ETF) from Absa Capital. At the end of each quarter, that ETF pays a dividend to its investors.
One of the requirements is that as part of the shariah process, the investor is expected to make a 5% contribution to a few pre-defined charities mentioned in the distribution announcement. They include the likes of the Vision Child and Youth Care Centre home and Gift of the Givers organisation.
SA slow to come to the party
Personally, I think South Africa is missing a trick here. The collective investment industry in South Africa is approaching R1 trillion in assets under management. If you could move even 1% of this money each year into well-structured entrepreneur support products, you could make a very meaningful impact on unemployment in the country and stimulate consistent investment in small business.
There is quite a lot of excitement around the proposed R9bn jobs fund Finance Minister Pravin Gordhan declared open for business yesterday.
While the initiative is to be applauded, I am wary of projects which lump a chunk of change with the Development Bank of Southern Africa. My issue is that the institution is also going to be responsible for screening the eligibility and suitability of the projects - and I am yet to be convinced that it has these skills, and that and we won't end up having money sitting there but not being deployed.
The private sector is on the whole better at doing these tasks, monitoring them and achieving outcomes; surely it is a better facilitator here?
I interviewed Ram Barkai, the CEO of financial services firm Cadiz, last week and he pointed out that globally SRI is now a trillion dollar industry, but South Africa had been slow to come to the party.
He is staking a big part of his business growth prospects on capital moving through properly structured projects. It is going to be very interesting not only to see what types of products the industry comes up with, but its ability to generate meaningful investment in the right areas.
- Fin24
Don't get me wrong: I understand the logic behind the concepts, but I also worry that they very quickly become a "product" to be sold, rather than having the supposed impact.
My argument has always been around making these things sustainable, and ensuring that the money that can flow into the sector does so in a sensible and consistent way so that the organisations which are being supported don't fall over if they lose a major investor.
For instance, I was in Carletonville over the weekend distributing some food and blankets collected by the Young Adult Portuguese Society (YAPS). I left there with the concern that while collecting this stuff had been a great deed, it would be consumed in a week and then there would be a gaping hole until the next donor came along.
There is never a consistent source of investment into the community to ensure that when its members are uplifted, they stay there.
A couple of weeks back I took a closer look at the Newfunds Shariah Top 40 Index exchange-traded fund (ETF) from Absa Capital. At the end of each quarter, that ETF pays a dividend to its investors.
One of the requirements is that as part of the shariah process, the investor is expected to make a 5% contribution to a few pre-defined charities mentioned in the distribution announcement. They include the likes of the Vision Child and Youth Care Centre home and Gift of the Givers organisation.
SA slow to come to the party
Personally, I think South Africa is missing a trick here. The collective investment industry in South Africa is approaching R1 trillion in assets under management. If you could move even 1% of this money each year into well-structured entrepreneur support products, you could make a very meaningful impact on unemployment in the country and stimulate consistent investment in small business.
There is quite a lot of excitement around the proposed R9bn jobs fund Finance Minister Pravin Gordhan declared open for business yesterday.
While the initiative is to be applauded, I am wary of projects which lump a chunk of change with the Development Bank of Southern Africa. My issue is that the institution is also going to be responsible for screening the eligibility and suitability of the projects - and I am yet to be convinced that it has these skills, and that and we won't end up having money sitting there but not being deployed.
The private sector is on the whole better at doing these tasks, monitoring them and achieving outcomes; surely it is a better facilitator here?
I interviewed Ram Barkai, the CEO of financial services firm Cadiz, last week and he pointed out that globally SRI is now a trillion dollar industry, but South Africa had been slow to come to the party.
He is staking a big part of his business growth prospects on capital moving through properly structured projects. It is going to be very interesting not only to see what types of products the industry comes up with, but its ability to generate meaningful investment in the right areas.
- Fin24
