Impact Investing and Franchisee Models

Impact Investing and Franchisee Models

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Impact Investing
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While impact investing is still for-profit rather than non-profit, it is socially- or environmentally-conscious investing, drawing on concepts of corporate social responsibility to create responsible corporate activity.
In 2016, this form of investing accounted for nearly $100 million in assets under management. As of 2018, that figure had grown to $228 billion.
A good example of impact investment in action comes from Switzerland-based bank UBS, which raised $471 million in 2016 for a cancer research impact fund that converts the results of the research into successful businesses.  
Social franchising
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One of the ways in which impact investment has been growing is through a concept called social franchising, creating socially impactful opportunities with the aid of franchisees.
Sanergy project
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Take Sanergy, a project designed to bring improved sanitation to the slums of Kenya, where 8 million people live in impoverished conditions and have difficulty properly disposing of their wastes. Sanergy’s solution was the Fresh Life Toilet (FLT), an affordable pay-for-use toilet that offers easy maintenance.
The company franchises FLTs to local teams of franchisees and provides them with training, financing, operational support, even daily collection of the used cartridges the FLT uses to collect waste. The result: affordable, effective sanitation for the Kenyan slum population, as well as employment opportunities for local franchisees.
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Child and Family Wellness (CFW Shops)
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Take the Child and Family Wellness (CFW Shops) network, for example, a social franchise of health care providers and educators focused on treating and controlling the world’s major infectious diseases. CFW Shops has a centralized procurement center, which is advantageous because it allows the organization to purchase drugs at lower rates, but operates on a franchise model. All franchisees are well-trained, being provided with classroom education, seminars, clinics, and learning about best practices for diagnosing diseases and prescribing medicines.
Marie Stopes International (MSI)
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Other examples offer variations on the theme. The UK-based charity Marie Stopes International (MSI) works with private health care providers in 18 different countries in Africa and Asia. The franchisees receive branding and marketing under the name BlueStar, and they work with MSI to deliver healthcare services to impoverished women in these countries.
Jibu
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Or take Jibu, a social franchise that sells clean, safe drinking water at affordable prices in the African countries of Kenya, Rwanda, and Uganda. Jibu finances the creation of franchised units, and franchisees pay the company back from the proceeds of the bottled water.
 
Impact investing is changing the world, particularly through social franchising, creating activity that is socially beneficial as well as profitable.
 

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