Targeted positive impact

THBE I Open Workshop on Social Return on Investment

Elemér Eszter, co-founder and board member of THBE, welcomed the participants. "The aim of the association is to encourage financial and professional investors in the Hungarian region to realise social and environmental benefits and utility in their investments - while achieving financial profit." - the co-founder introduced the association. He explained that the aim of social utility investors is not to maximise profits, but to create and strengthen businesses that solve social or environmental problems as self-sustaining companies. Social impact funds are a suitable vehicle for investors around the world to invest in structured, controlled, target-driven, business-driven businesses that solve social or environmental problems. And for social enterprises, the need to make their organisation acceptable to an investment fund provider, to develop their operational processes to the right quality and to make their business effective, represents a major opportunity for growth.

Why social investment?- asked the question as the next item on the agenda of the event, in a roundtable discussion with Rozi Váczi, owner of Matyódesign, and Anna Horváth, representing its investor NESsT; János Czafrangó, head of the Erste Bank good.bee programme, and László Jakubinyi, president of the Szimbiózis Foundation, representing its investment. Also representing Gubbio were Antal Károlyi, President of the Hungarian Business Angel Network and co-founder of Traction Tribe. The discussion was moderated by journalist Péter Gianone.

"The idea was born in the kitchen of a holiday home in 2010. The concept: traditional patterns and motifs on fashionable, modern clothes," said Rozi Váczi. Matyódesign is a family business, the patterns are sewn in Tard by local women and now also by the younger generation. The aim was to give a disadvantaged village an opportunity, a job, and to preserve and pass on the tradition embodied in needlework. At the beginning, six people sewed the clothes; today, more than 20 people can be employed. At first they only sold through a webshop, but now they have a significant reseller network.

"NESsT, a national initiative launched in 1997, develops sustainable social enterprises that address critical social problems in emerging market economies." - continued Anna Horváth. The NESsT offers three levels of support to social enterprises: financial investment in the form of non-repayable and soft loans; professional support through business and entrepreneurship skills and knowledge development; networking capital, pro bono access to a pool of experts. The cooperation and support will include measuring and monitoring the social utility of the enterprise and its impact.

"The white cane for autistic children", is how Antal Károlyi described Gubbio. They invested in Gubbio through PBG FMC - Traction Tribe. Gubbio is a mobile application that helps to connect with children with autism. In addition to being profitable, this development is a commercially viable idea, an investment, and has significant social benefits. What is generally looked at before an investment in a company is the team, who and what they are, the people behind the idea, the market, where and with whom they want to compete, and the product itself, what it is, what it is about, what is new and special about it.

"The Symbiosis Foundation has created a complex service model by shaping attitudes, promoting understanding, acceptance and inclusion. With a holistic approach, we seek to create a state of equilibrium by combining social activities, ecological realisations and economic regularities." - introduced the Foundation's President László Jakubinyi. Their main target group is people with autism and intellectual disabilities, but they also provide various services for other people with disabilities. The cooperation between the foundation and Erste started around 2010 when they won the Erste Foundation Award. "good.bee is a financial inclusion initiative of the Erste Foundation and Erste Group. Its main mission is to develop innovative solutions to help and support the creation and operation of initiatives of social benefit in Central and Eastern Europe. It is a very lovable job, colleagues work on it in their free time, after work, for it." - said János Czafrangó, head of the good.bee programme.

The first half of the event was The Impact Economy - How Purpose will change Business and Investment, a presentation in English by Nikolaus Hutter, economist and founding director of New Paradigm Ventures. He spoke about social impact investing. A 20-year investment and strategy consultant, he brings investors and companies together to find new ways to invest for environmental or social benefit. "Behind the current difficult economic situation is bad planning and bad focus; looking at material things only as value." - said the expert. In contrast, social impact investing is return-oriented and targeted for positive impact - it seeks social change and has a measurable positive value.

In the second half of the program, participants could participate in the following sessions: investors - Dr. Antal Károlyi, President of the Hungarian Business Angel Network, co-founder of Traction Tribe; investments - Imre Aranyosi, CEO of Napra Forgó Nonprofit Ltd.; incubators-accelerators - Dániel Gönci, organization and product developer, Civil Support-Impact Accelerator; building a pro bono network - Pál Iváncsics, President of THBE.

In the United States and Western Europe, there is now a widespread view that investments should not only be made for a return on investment, but also for planned and measurable social benefits. Worldwide, $15.2 billion was invested in social impact businesses last year. The focus is on creating social, environmental, cultural impact and value, with return-on-investment financing for a social enterprise (also known as a social business). This is the approach THBE wants to spread in Hungary and the region. The association will present this aspect in the form of lectures and participation at the following events. Erste Group's Social Banking debate, MAF conference 12 October 2016; 21st Annual Ambassador Conference 19 October 2016; Pannonhalma Leadership Conference 20 October 2016, EVPA conference 3-4 November 2016 in Paris and Social Enterprise Day in Bucharest 8 November 2016.

THBE holds its conference annually, with the next event on 21 September 2017.