Abigail (Abbie) Jung is an international development professional with over 10 years of experience in public health, humanitarian aid and economic development. At Sow Asia, she manages the investment portfolio and oversees all aspects of the investment process from deal sourcing to due diligence to investment management.
Abbie holds a BA in Neurobiology from the University of California at Berkeley and an MPH in Population and Family Health from Columbia University.
In this auspicious time of New Year celebration, we were honored to spend a value time talking with her.
Q: Why do you choose to follow this path despite your background in Neurobiology and MPH?
A: My academic background in the health sciences combined with an interest in international development led to a career in international public health, humanitarian aid and development.
I’ve worked with local civil society / grassroots organizations, major international nongovernmental organizations and UN agencies. And while much has been achieved, I had always feared that our work was only a bandaid, or an interim fix, to the long-term solution that should be provided by government policy and action. Unfortunately, often times the government is unable or unwilling to address these many of these problems.
I came to recognize the potential and power of the private sector, with its unlimited supply of capital, as a means of addressing long standing social, economic and environmental issues. Hence, I see social investment as just another means of international economic development but through the support of socially driven organizations with sustainable revenue models.
Obviously not all of society’s problems can or should be solved by social businesses. But the ones that can (i.e., there is a market demand for its products or services) should go that route as this enables them to become less donor dependent and this frees up government and donor funding for organizations that must rely on grant funding, such as humanitarian aid.
Q: What are the lessons learnt for you for working in this field?
A: As the modern day practice of social enterprise and impact investment are relatively new to Asia, there is mixing of terminology and SE models, even by practitioners and investors. These terms are used interchangeably despite a wide range of models and practices within. Given the diverse range of social enterprise models, the term social enterprise means something different depending on whom you ask. This is also the case with venture philanthropy and impact investing. Venture philanthropy ‘investment’ spans grant-making, debt and equity funding. Within the impact investing space there is Impact First-Impact Investing and Financial First-Impact Investing based on the primary objective of the impact investor.
This has led to much confusion in the field especially as related to the types/amount of financing needed by social enterprises and the financial return expected by investors. I’ll discuss a few examples of social enterprise models. There are countless more.
For example, enterprising nonprofits or social service organizations, which deliver services governments should be providing, need financing in the form of grants or government subsidies/contracts. They will likely operate on a breakeven basis and not be able to provide a financial return to investors. Debt and equity funding is not appropriate for their model. These organizations should not try to become more profit-driven or commercially oriented because there is funding available for their existing model. (However, this is not to say that such organizations should not be become more professionally or efficiently run.)
Another example at the other extreme is the type of enterprise that provides a socially beneficial service or product where there is a strong market demand but function essentially as profit-maximizing companies. As they will be able to provide attractive rates of return to investors, they can consider debt or equity financing from both Financial First-Impact Investors and traditional commercial investors.
As a venture philanthropy fund, Sow Asia invests in socially driven enterprises that have a sustainable and scalable / replicable revenue model. As we don’t provide grant funding or invest in profit-maximizing social enterprises, we invest in the middle part of the social enterprise spectrum. Examples of social enterprises in this area include those that provide products or services to the base of the pyramid population and social businesses that reinvest most or all profits back into the business thereby providing below-market rate returns.
As you can see, these models are quite different and hence the necessary financing and support ecosystems around them should be quite different. But the problem is that because these broad terms are used indiscriminately, social enterprises and investors have a difficult time finding partners appropriate for their models.
Q: What do you want to say to SEs and investors?
A: To social enterprises: Make sure you understand the type of financing and support that is appropriate for your model and find partners that have the capacity and desire to help you achieve your goals.
To investors: Make sure you’re clear about the kind of social/financial return you want and the type of financing and support you plan to provide then find the appropriate type of social enterprise that meet your criteria.
It was a joyful moment talking with Abbie. We do hope that her story will be encourage you to start a new year with confidence and to make a better world together!
