CARE Enterprises was created to harness the power of capital markets in the fight against poverty. We identify and invest in for-benefit enterprises in frontier markets that are proven and profitable or on the road to profitability.
It is estimated that $1.4 trillion will be needed each year in order to achieve the Sustainable Development Goals by 2030.1
By contrast, the total official aid budget is less than $150 billion2, leaving a massive gap between demand and supply. Non-profit efforts will not fill this gap alone - engaging the private sector in the fight against poverty is an imperative.
To include two billion additional people in the economy, private capital must flow into enterprises in the developing world that deliver strong social, environmental, and economic impacts. These enterprises are not traditional profit-maximizing firms, but rather for-benefit enterprises whose purpose is to deliver public benefit through responsible business practices.
One of the primary unmet needs of for-benefit enterprises is access to capital. Despite a growing call for the mainstreaming of impact investment, only a fraction of impact capital has actually been invested in these enterprises to date – primarily because of unsuitable investment tools and unreasonable financial return expectations.
The impact investment community is starting to see that achieving both transformative social impact and market-rate financial returns is the exception, not the norm. “The most impactful and successful of social enterprises in emerging economies—even in developed countries—are likely to generate only low-single-digit financial returns."3
In addition, conventional financial products frequently prioritize the needs of investors (high financial returns to realize a quick exit) over the needs of for-benefit investees (slower growth inherent with business models built for marginalized communities). For-benefits operate differently from conventional businesses and therefore need financial partners that will respond appropriately.
By taking innovative approaches to financing that most other return-focused funds do not consider, we are able to incentivize our for-benefit investees to deliver on their promises of social impact through growth that is more consistent with their business models and complex realities.
We believe that this is the most effective path to transformative economic and social impact at scale.