Investing for social impact in developing countries

Social impact investors in developing countries include foundations, high net-worth individuals, early-stage venture funds, private equity funds, development finance institutions and other institutional investors (Table 5.1). Key recommendations for getting social impact investment right * Advance knowledge of social impact investment instruments and their applicability in the context of the 2030 Agenda, in a variety of sectors and across different country settings. * Promote international research, data collection, case studies and the development of indicators on social impact investment. * Increase transparency and provide the additional resources needed to build the broader enabling environment or ecosystem for impact investment; ensure that social reporting requirements are not overly burdensome for social enterprises. * Cultivate and develop new and innovative companies and business models, including ones adapted to the needs of the bottom-of-the-pyramid populations. * Develop local entrepreneurial talent and a pipeline of investment-ready project proposals and facilitate the roll-out of pilots worldwide. * Build an evidence base on the impacts, outcomes, successes and failures of social impact investment in ways that are comparable across countries. * Align incentives for social and financial goals, and help service providers develop their capacity to measure social outcomes. * Use new approaches to measurement, such as the TOSSD framework, to capture and evaluate the full spectrum of financial instruments and sources. * Use public funds to: * strengthen the overall governance framework to ensure a sound business environment in developing countries, in particular in the least developed countries and in countries emerging from conflict * leverage private funds by providing incentives and/or helping to reduce risks via guarantees or early-stage grants or investment * help to develop the social impact investment ecosystem to ensure a well-functioning market * establish platforms to exchange knowledge and share experiences among development actors and the social impact investment sector.