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According to its proponents, private investment for both profit and social good holds the promise of unlocking billions to address the problems of poverty and inequality. To others it’s just another fad. Antony Bugg-Levine of the Nonprofit Finance Fund and Jed Emerson of ImpactAssets look at the relationship between philanthropy and profit and the need for overhauling regulatory frameworks. Jonathan Morduch of the Financial Access Initiative cautions that microfinance holds some tough lessons in how to make investments sustainably target the poor, and Katie Grace and David Wood of the Initiative for Responsible Investment at Harvard University explain why governments need to play a role in facilitating investment. The issue also includes a “Charticle” offering a how-to guide on impact investment.

Private equity professionals, firms, and their advisors in Latin America and in Central and Eastern Europe (CEE) continue to show their commitment to partnering with NESsT through joint efforts at key events on both ends of the world, and this year was no exception.

NESsT teamed up with both the Hungarian Venture Capital Association (HVCA) and the Latin American Venture Capital Association (LAVCA) in their most important regional events of the year held in Budapest, Hungary, and Santiago, Chile, respectively. At each of these events, NESsT was invited to host a Social Marketplace to showcase its portfolio of social enterprises, and to recognize some of these enterprises for their excellent performance.

The events provided the perfect stage for the launch of NESsT’s newest award: the Women in Social Enterprise (WISE) award, recognizing exceptional women leaders in social enterprise. Established in memory of long-time NESsT friend, supporter, and former Board member, Jean Waggett, the WISE award was launched to encourage and honor excellent women leaders in the field of social enterprise, as well as social enterprises that create economic opportunities and improve the quality of life for women from marginalized communities.

The award recognizes individuals and organizations that demonstrate exceptional leadership and a particularly effective or unique approach to creating opportunities for women.

“Although we are deeply saddened by Jean’s passing, we hope that the WISE Award will be one small way that NESsT can recognize and celebrate, in an ongoing way, an incredible woman, role model, and friend,” said Nicole Etchart, NESsT’s CEO and co-founder.”The recipient of the WISE Award serves as a model of best practice to practitioners, investors, philanthropists, and donors and, in particular, to inspire young women leaders,” she added.

Made possible thanks to the generous support of Marisa Drew, managing director in the Investment Banking Division of Credit Suisse and member of the NESsT UK Board of Directors, the WISE award provides its winners with a financial contribution to be used for further development of their social enterprise.

At the HVCA CEE Corporate Finance and Private Equity Conference 2010 in Budapest, the first WISE award was presented to the Croatian organization RODA for its social enterprise that produces attractive, easy-to-use cloth diapers delivering health-related and environmental and social value through an eco-friendly, affordable and high quality alternative to disposable diapers. Revenues generated go toward supporting Roda´s educational workshops and materials for parents and pregnant women as well as its home-nursing help line. The award was given to RODA for its work to bring about change in Croatian maternal care and to engender increased parental involvement in children’s lives.

The HVCA conference was also the perfect opportunity for NESsT to present its 2009 NESsT-Citi Social Enterprise Competition awards and to showcase its Social Marketplace, which gathered the social enterprises of the NESsT portfolio in Central Europe. The marketplace featured a total of 22 social enterprises from Croatia, the Czech Republic, Hungary, Romania, and Slovakia. They exhibited their products, presented their services, and had an opportunity to share their missions and activities with a different type of audience.

A second WISE award was also presented in Latin America at the LAVCA Chile Private Equity and Venture Capital Forum 2010, to Fundación Templanza, an organization dedicated to improving the lives of Chilean women, particularly those who are victims of domestic violence. The award recognizes Templanza’s exceptional social enterprise aimed at providing very high quality psychological support services to these victims, through a differentiated fee scale. Templanza is exiting the Chilean portfolio this year as it has reached full sustainability, currently reaching over 300 patients a month.

Similar to HVCA, LAVCA provided a perfect forum for NESsT to feature a social marketplace consisting of 10 organizations from the NESsT Venture Fund portfolio in Chile. NESsT also highlighted the work of its Levantando Chile Fund, set up to assist communities in the aftermath of the Chilean earthquake. It presented two portfolio organizations – Relmu Witral and Trabajo Para un Hermano-Concepción – an award of US$ 25,000 each to be used in their efforts to helping local producers, artisans and micro-entrepreneurs to recover and improve their livelihoods.

“NESsT’s participation in our first event in Chile gives us great satisfaction. Private equity has grown significantly in Latin America and Chile over the past few years, and NESsT’s focus on engaged philanthropy is a smart way to invest in long-term development of the region’s social sector,” commented Cate Ambrose, director of LAVCA.

Residents of central Chile were jolted out of bed at 3:34 am on February 27, 2010 by a severe earthquake measuring 8.8 on the Richter scale. Three hours later, a 6.2 aftershock struck Concepcion and less than two hours after that, another aftershock of 5.5 hit approximately 50 miles from Santiago. The earthquake also triggered a tsunami, washing away entire fishing villages and towns in the coasts of southern Chile.

Within 36 hours of the tragedy that hit the country where NESsT houses its international headquarters, NESsT acted quickly, establishing the NESsT Levantando Chile Fund to support both immediate relief efforts and long-term reconstruction efforts in Chile.

“This tragedy touched all of us, not only those who live in Chile but also those living abroad, far from family and friends, who felt paralyzed by this crisis,” said Lee Davis, NESsT’s CEO and co-founder. “Our efforts have raised critical funds to offer immediate assistance to established Chilean nonprofit organizations, facilitating the flow of capital to enable them to rebuild their communities. This is just the beginning.”

Launched at an event on March 4th in New York held at Puro Chile, a New York-based Chilean country-image project, the Levantando Chile Fund raised its first funds which were quickly designated to on-the-ground nonprofit organizations working in the affected areas. Chile Ayuda a Chile received a one-time contribution of US$ 25.000 for emergency housing and medical assistance, and Relmu Witral of Tirua and Trabajo Para Un Hermano-Concepcion US$ 25.000 each for longer-term economic recovery and reconstruction.

Levantando Chile Fund Meets First Milestones

Based on NESsT´s on the ground in-depth assessment of the impact of the earthquake on micro entrepreneurs (averaging monthly income of US$ 100), it was decided that support from the LCF would go toward five areas: 1- reconstruction and repair of workshops and tools, 2- access to needed supplies, 3- psychological support for those traumatized and unable to work, 4- recovery of existing and establishment of new commercial channels, and 5- strengthening the longer term entrepreneurial capacity of the entrepreneurs. NESsT would work with local organizations and their social enterprises to address the above needs and strengthen the their own capacity to assist the entrepreneurs.

Nearly 150 weavers supported by Relmu Witral and 60 artisans by Trabajo Para un Hermano-Concepción have already resumed their work thanks to funds provided to rebuild their workshops and purchase needed tools and supplies. NESsT is working closely with the social enterprises owned and operated by these organizations to secure new commercial channels for these groups.

The US$ 25,000 awards were officially given at the May 26, 2010 LAVCA (Latin American Venture Capital) Chile Forum which brought together over 150 private equity regional investors.
“These initial awards represent our long-term commitment to micro-entrepreneurs in the areas most affected by the earthquake. We hope these social enterprises will not only recover the income they lost due to this tragedy, but will also improve their entrepreneurial capacity and ultimately lead to higher income levels for micro-entrepreneurs, artisans and small agricultural producers most affected by the earthquake,” said Nicole Etchart, NESsT’s second co-CEO and co-founder.

The Levantando Chile Fund’s ultimate goal is for its beneficiaries to be completely self-sustaining as quickly as possible: living, working and selling their products as they did before the earthquake and tsunami struck. NESsT is planning to expand the coverage of the Fund to approximately 2,000 people, corresponding to 400 micro-entrepreneurs living with very limited income streams and their families.

Relmu Witral

Located in Tirúa, a coastal town located in southern Chile, a region that was heavily destroyed by the earthquake, Relmu Witral works closely with local indigenous communities of Lafkenche women, training them in preserving their ancestral skills as textile weavers and providing them with support in producing and commercializing their handwoven products.

A member of NESsT’s portfolio, Relmu Witral is already concentrating on ensuring Lafkenche women, such as Margarita Necul, restore their income quickly so they may continue to support their families and rebuild their lives. Margarita, a member of Relmu Witral, had always dreamt of learning how to weave in the traditional ways her 99-year-old grandmother had taught her, but she is finding it hard to resume work because of ongoing fears triggered by the earthquake and tsunami that hit her hometown in the south of Chile.

A portion of the funds raised by Levantando Chile are being used to provide psychological support to help these women deal with the post-earthquake trauma. The women’s stress is compounded by the sudden loss of employment for many of their husbands, mostly fishermen.

Funds raised through Levantando Chile are also being used to help Relmu Witral repair its headquarters, which includes a store where the textiles are sold, recover and/or purchase raw materials, and open access to new markets for its products.

Trabajo Para un Hermano-Concepción

Levantando Chile Fund is also supporting Trabajo Para Un Hermano-Concepción (TPH), which provides training and support for artisans in Concepción, one of the cities hardest hit by the earthquake. TPH-Concepción runs a fair trade store called Manos del Bío Bío, which sells the products made by the artisans in its group.

In May, NESsT’s Levantando Chile Fund began its first phase of support for TPH artisans, such as woodworker Ramón Espinoza who lost all of his means of income after the tsunami destroyed his shop in Concepción.

TPH-Concepción will work closely with NESsT to find markets for its artisans’ products outside of the area, seeking new sales points in Santiago and other regions less affected by the earthquake. At the same time, a portion of the Levantando Chile Fund will be given to the store, Manos del Bío Bío, to continue to purchase artisans’ products now that its revenue is down and it has a limited cash flow.

Joint Efforts with Chile Supporters Around the Globe

NESsT’s call for support for long-term economic reconstruction efforts in Chile was heard in many corners of the world. Over US$ 500,000 have been raised so far, mostly from on-line giving and diverse fundraising initiatives in the USA, Canada and the UK, to name a few, that have joined the campaign.

An ongoing supporter of NESsT, The Tinker Foundation responded almost immediately with a generous donation of US$ 50,000 to further the efforts of Levantando Chile Fund. Other long-term supporters of NESsT have also stepped up and joined the efforts and many more have renewed their future support.

Through the hard work of California artist, John Burton, an online art auction was launched through an initiative he established, The Art of Helping, where 59 renowned US landscape artists donated paintings, and online collectors were able to bid on these in April during an 8-day online auction. The event raised over US$ 22,000 for Levantando Chile.

NESsT also joined forces in March with Wines of Chile (WoC), the Chilean wine industry trade association committed to promoting Chilean wines around the world, to raise funds from the industry to assist families living in Chile’s wine regions.

NESsT is working with WoC’s offices and representatives in Santiago, New York and London to leverage donations from wineries, importers, distributors, customers and others. The focus has been on online promotions, wine tastings, and other industry events in Chile, the U.S. and the U.K.

The Chilean-Canadian community of Toronto, Comisión Teletón-Toronto also held an ongoing fundraising campaign through its radio program Nuestro Chile. And the restaurants nopa and nopalito are also donating funds from sales of Chilean wine to LCF.

Read more about the Levantando Chile efforts with Relmu Witral and TPH-Concepción here.

Join the growing circle of forward-thinking entrepreneurial donors and support the Levantando Chile Fund today.