The signing of the Technical Cooperation Agreement with the Federal Government, through the Ministry of Industry, Foreign Trade and Services, took place on August 4th, during the Social Finance and Impact Business Forum held in São Paulo. This event represents a milestone both for the Brazilian Social Finance Task Force and for Sitawi, a member of the initiative's executive board. This measure enhances the 15 priority recommendations, to effectively give continuity to the consolidation of the Impact Investment market.
“Having a partner in the government who is committed to advancing our agenda brings a great gain for the sector”, commented Leonardo Letelier, CEO of Sitawi.
In a meticulous and complete analysis of the Social Finance ecosystem, carried out by the FTFS, four levers for its strengthening were identified, which need to be promoted jointly: (1) the expansion of the capital supply, (2) the increase in the number of Businesses qualified and with high growth potential, (3) the strengthening of intermediary organizations and (4) the promotion of a favorable macro environment for Social Finance.
In order to move these levers and effectively continue the consolidation of the Impact Investing market, the Social Finance Task Force defined 15 priority recommendations, with the respective suggestions of goals for the next five years and the nomination of key actors who should be directly involved in its realization.
Check out the recommendations:
#1 Investment by high-income individuals in impact financial products
The FTFS recommends that high-income individuals, directly or indirectly (for example, via Family Offices), encourage the financial institutions of which they are clients, as well as the investment fund managers that manage their assets, to create financial investment products with social impact, and/or define, for existing products, an allocation percentage in this type of investment.
#2 Protagonism of Foundations and Institutes in Social Finance
The FTFS recommends Foundations and Institutes (business, family and independent) to make donations and investments to make pilot and innovative initiatives in the field of Social Finance and Impact Business possible.
#3 Expansion and capitalization of social funds
FTFS recommends that BNDES direct part of its contributions
annual non-reimbursable resources for the capitalization of Social Funds.
#4 Use of BNDES social subcredit for Impact Businesses
The FTFS recommends that the BNDES make explicit the term ?Social Impact Business? in the list of valid applications for resources from the Social Subcredit (Linha ISE) linked to the bank's economic loans. Other Banks and Development Agencies with similar mechanisms should also follow this recommendation
#5 Inclusion of Impact Businesses in the value chain of companies
The Social Finance Task Force recommends entrepreneurs, executives and members of the Board of Directors to assimilate and adopt the concept and vision of Impact Businesses as part of their companies' strategy and to ask their teams for practical actions to encourage these undertakings in your action plans
#6 Creation of models for inclusion of Impact Businesses in government procurement
FTFS recommends to Academia, NGOs working in public management, Institutes and Foundations to give visibility to existing initiatives and help consolidate alternative models for purchasing Impact Business products and services that can be replicated and scalable by different governments.
#7 Calls for Impact Investment Funds
The FTFS recommends that banks and federal development agencies (such as BNDES and FINEP), state (such as Desenvolvimento SP) and multilateral organizations (such as IDB-MIF, IFC, DEG, etc.) of Impact Investment in defining its criteria for making calls for investments in Venture Capital and Private Equity Funds.
#8 Strengthening incubators and accelerators to qualify more Impact Businesses
The FTFS recommends that companies, foundations, institutes and the government consider in their social investment strategies the inclusion of incubators and accelerators that provide training and support for entrepreneurs with Impact Businesses.
#9 SEBRAE support for impact business entrepreneurs
The FTFS recommends that SEBRAE evaluate the multiple opportunities to link or strengthen the theme of Impact Business in its training and support products for current and potential entrepreneurs, considering the challenge of putting them in a network with a larger number of companies.
#10 Production of Knowledge and Training in Social Finance, Social Entrepreneurship and Impact Business
The FTFS recommends that Higher Education Institutions (HEIs) include the themes of Social Finance, Social Entrepreneurship and Impact Business in the curriculum of the most varied areas, structure specific courses and direct efforts towards the production and dissemination of knowledge on this theme.
#11 Innovative and financially sustainable formats for financing Impact Businesses
The FTFS recommends financial market regulators, in particular the Central Bank and the Brazilian Securities Commission (CVM), to regulate innovative fundraising platforms for companies, especially those in the initial stages of development.
#12 Promotion of an evaluation culture among entrepreneurs and impact investors
FTFS recommends Higher Education Institutions and Assessment and Certification Entities to build and implement a plan to disseminate the assessment culture in Brazil for entrepreneurs and impact investors, following the global trends of a common language and impact assessment standards.
1TP5Q13 Integration of the Federal Government in the Social Finance agenda
The FTFS recommends that the Government incorporate the theme of Social Finance in the conduct of public policies, acting with a strategic vision to boost the field, through the feasibility of impact financial mechanisms and the strengthening of intermediary organizations
1TP4Q14 Social Impact Agreement
The FTFS recommends that the Federal Government support the development of an Impact Contract market Social, encouraging state and municipal governments to make use of this alternative tool and thus increasing the effectiveness of resource allocation for social interventions.
#15 Principles for Impact Businesses in Brazil
The FTFS recommends that Impact Entrepreneurs, Accelerators, Companies, Foundations and Institutes, Philanthropic Organizations, Financial Institutions, Academia and the Government use the Principles for Impact Businesses in Brazil11 as a reference when defining Impact Businesses.
Learn more about Social Finance recommendations and ecosystem http://forcatarefafinancassociais.org.br/recomendacoes/