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Learning from Mistakes: Social Investment

Author: Leonardo Letelier & Rob Packer
Published Date: 24 July 2013

Via the Stanford Social Innovation Review

ByLeonardo Letelier & Rob Packer | Jul. 23, 2013

In our 2011Stanford Social Innovation Reviewarticle, “Journey into Brazil’s Social Sector,” we looked at challenges that Brazilian social organizations face in accessing financial services, including opening a bank account, high interest rates and collateral requirements, and the potential for catch-22’s where a late government contract payment means a nonprofit falls behind on payroll taxes, with the consequence that government is obliged to freeze further payments.

We believe that our work atSITAWIhelps resolve some of these problems; we have developed our product offering to expand the amount and types of capital available to Brazilian social organizations, enabling us in 5 years to put nearly $1.5 million into 15 socially focused organizations and reach nearly 24,000 people. As we knew would inevitably happen, we also saw our first social loan default, and feel it is important to share the experience and identify lessons for the social sector and wider social impact community.

To read the full article, please follow the link to the Stanford Social Innovation Review, where this piece was originally published.