This story originally appeared in our December 3, 2010 e-magazine. Click here to subscribe.

Morgan Simon, Founder of Toniic, a new company that will aggregate angel investments in the social enterprise sector, spoke to Nisha Kumar Kulkarni about the need for such an organization and current challenges that investors face.

Toniic, a new aggregator of angel investments will facilitate global investments in the social enterprise space. The organization will work to increase the amount of early-stage funding for entrepreneurs working in the developing world. Through innovation partnerships, Toniic hopes to make investing easier.

BP: How would you define impact investing? What does that term mean to you?
MS: Impact investment is an important tool for those who seek a more equitable and sustainable society. Unlike philanthropy, which seeks to maximize social impact without a need for financial return, and conventional investment, that seeks to maximize returns without any regard for social impact, impact investment provides an opportunity for individuals and institutions to have their cake and eat it too; achieving the financial returns they require while also seeking to maximize social impact. This might mean providing financing for a school or health clinic that will ultimately, unlike a charitable institution, be a self-sustaining entity. Hence, for many entrepreneurs, impact investment rather than donations can also lead to greater long-term sustainability, as they specifically use funds to ensure that projects will continue in perpetuity without the need for annual donor support. It can also ensure that they can be most responsive to the needs of their communities, as their clients are their patrons rather than external donors.

BP: Why did Toniic start? What is its reason for being? What are your intentions and goals?
MS: Toniic was founded in order to increase the velocity of money moving into global social enterprise. There has been a tremendous gap of early stage funding in the sector, particularly globally, as investors coming from the US and Europe often face high transactional costs when seeking to place an investment in India, Africa or in general most countries in the developing world. By working to grow local investor communities in countries like India, and combining their local expertise with global sector expertise, our hope is that transactions costs will lower, more money will flow, and local funding communities will sprout up to support their countries’ social entrepreneurs.

BP: How do you envision Toniic’s role in India?
MS: We are very pleased to be partnering with Dasra, India’s leading strategic philanthropy foundation. Dasra works with philanthropists and successful social entrepreneurs to bring together knowledge funding and people as a catalyst for social change. They are expanding their activities to include impact investment, and will lead Toniic’s India presence. We look forward to building a vibrant community of impact investors in India, strengthening their global ties, and helping to bring funding to the many exceptional social entrepreneurs doing incredible work in India.

BP: How will you work with your partners who are already operating in the impact investing space, like GIIN and GIIRS?
MS: I’ve been told it’s a well-known fact in India that GIIN and Toniic go together quite well. We are very much friends and partners, along with many other social investors globally. Additionally, we are working with GIIRS as one of the pioneer funds helping to pilot their important work in impact measurement.

Photo courtesy of EdcoOnline

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  1. Sergio Said,

    December 8, 2010 @ 3:44 am

    Excellent initiative — keep up the good work!
    As Morgan says, the most promising potential of impact investment is that it can contribute to community empowerment. However, this requires a clear commitment on the side of investors to act as catalysts of a process of equitable and sustainable development that is eventually taken over by the community. This is the kind of impact investment that has real potential to solve the real social and environmental challenges that we face. I trust that TONIIC will contribute to orient the emerging field of impact investment in this direction.

  2. Jesse Said,

    December 19, 2010 @ 7:06 am

    An important initiative – am interested in following its development.

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