Finding Capital for Sustainable Livelihoods Businesses

The purpose of this guide is to offer an overview of new ways of funding sustainable livelihoods business. This guide:

• Focuses on how to source funding for a sustainable livelihoods business;
• Aims to provide a blueprint for action;
• Explores public private partnerships, how to raise capital for local operational partners, and why securing this funding may be core to the company's success;
• Suggests that sometimes the cheapest, most readily accessible, capital is not the best source of funding.

Some of the sources of potential funding that this guide mentions are:

• Multilateral financial institutions;
• Bilateral development agencies;
• Private foundations;
• Social loan and venture funds;
• Microfinance institutions.

Some of the key concepts that the report highlights are:

• Patient capital - Here the investment is characterized by a long-term horizon and is particularly motivated by positive social and environmental impacts;
• Distributed capital strategy - This allows companies to tap into external capital resources to which they would not otherwise have access;
• Project capital - This refers to the capital channeled towards financing the business itself; it can be either financial or non-financial capital;
• Partner capital - This involves securing the necessary funding for organizations that surround and support the sustainable livelihoods business.

The 10 case studies included in this guide describe how a number of companies are already driving financial innovation by exploring unusual funding options. These profiles tap into key insights provided by companies actively involved in accessing patient capital resources and creating effective business partnerships around sustainable livelihoods. The guide mentions that whilst each business initiative is location and industry specific, the lessons apply across multiple sectors.

A key finding is that a considerable amount of money, earmarked for development, is available from a number of sources to support business activities in poor communities but companies need to clearly demonstrate the social benefits of their sustainable livelihoods business.