In this episode of Entrepreneurs For Good, I speak with Lisa Genasci about her journey building ADM Capital Foundation, an organization that has been widely recognized for its impact across a number of important issues and for their work supporting (and incubating) some of Hong Kong’s leading organizations.
It is work that that required a commitment to her vision for change, remaining focused, and finding ways to collaborate with others to bring scale of effort and impact.
About the Entrepreneurs For Good Series
Through this series, we speak with Asia based entrepreneurs whose mission it is to bring solutions to the environmental, social, and economic challenges that are faced within the region to learn more about their vision, the opportunities they see, and challenges that they have had to overcome.
It is a series that we hope will not only engage and inspire you, but catalyze you and your organizations into action. To identify a challenge that is tangible, and build a business model (profit or non) that brings a solution to the market.
Lisa established The ADM Capital Foundation ten years ago as an innovative philanthropic vehicle to support critical research and impact-driven approaches to promoting environmental conservation in Asia.
ADMCF has been widely recognised for its work on solutions to some of our most intransigent challenges: Our depleting oceans, the nexus between forestry and development, air quality and public health, the intersections between food, energy and water.
Lisa advises ADM Capital to shape its investment principles and provides ESG advisory services to ADM Capital funds. Lisa holds a BA degree with High Honors from Smith College and an LLM in Human Rights Law from HKU.
Follow Lisa and ADM Capital Foundation
Driven by the belief that change begins with a single step, Richard Brubaker has spent the last 15 years in Asia working to engage, inspire, and equip those around him to take their first step. Acting as a catalyst to driving sustainability, Brubaker works with government, corporate, academic and non-profit stakeholders to bring together knowledge, teams, and tools that develop and execute their business case for sustainability.
RICH: Welcome back everyone. Rich Brubaker here with Lisa Genasci from ADM Capital Foundation. We’re here to talk about working between non-profits, finance to work on the biggest problems of, that I think the Asia region is facing. We hope you enjoy this, we hope you find value and inspiration from the discussion we just had. I know I certainly did. If you did, please remember to like, share and comment.
LISA: My name is Lisa Genasci and I set up ADM Capital Foundation for the partners for ADM Capital, which is an investment manager based in Hong Kong 10 years ago. The partners, four British partners, wanted to not just be giving in terms of their own philanthropy, but they wanted to set up a foundation that be impact driving. So right from the beginning they wanted to see systemic change in the environmental sector particular.
Initially we had a strong children at risk program, that we’ve morphed into the space that we saw for ourselves was more in the environmental sector because there was less work happening and the environmental sector would oversee a lot of need for change.
EARLY AREAS OF PASSION
RICH: So what are the issues that you initially came in on, drove you personally or that were align with the partners?
LISA: We started an initiative on shark finning. Because 50% of the shark fin trade was through Hong Kong and people said that we need we can’t make change in shark finning. People will continue to serve shark fin at wedding. We supported initially all of our work begins with research. We supported cultural trade and market research which showed actually that people were not necessarily wedded to the consumption of shark at weddings. It was more of a sort of a habit. It was a questions of showing faith of affluence, or showing affluence and that is not so difficult to the change once people understand the consequence of the consumption. So it became an issue of consumption and how to change behavior
Rich, you have INTRODUCTION here as the title….are you sure? It is also above.
RICH: So you did the research, you identify the consumption, then how did you take it forward and what impact…are you able to look back on it hey, we had this much impact or we did this much?
LISA: In that case, we supported the research, we brought together NGOs working in the sector. Obviously, everybody has their own strategy. It’s not a matter of NGOs necessarily working in the same way. Everybody has their place, which is fantastic, but we all work to divide the message so this buy consequences of the consumption. That was a main message in Hong Kong, which is a bit different than the message in China. Which is much more around cruelty.
So with NGOs, we established targeted campaigns focused around hotels, which is where there was obviously a large consumption of shark fin, wedding banquets. The other focus was companies for the official banquets. Then of course government for government events and fast forward many years later we’ve ended up with about 150 companies signed up to WWF corporate pledge not to consume shark fin. Then in the terms of hotels, we most of the 4 and 5 star hotels, 62% of the 4 and 5 star hotels and actually it’s more now have taken shark fin soup off their menu or serve it only upon request.
RICH: How long did it take, how long has this been going on? When did you do the research? How long has it taken for this 30% reduction?
LISA: I guess we started this year, I’d have to check the figures, but we started to see the reduction in 2012-2013 Id’ say and we started in 2006.
RICH: You have a lot of it issues that you work with from forestry, fishery, obviously air pollution. How do you figure out what issues you’re going to work with and why not just stick with one? How do you make those decisions as a group? How do you maintain a 10-12 year commitment, I’m sure of money and of human capital to each of these issues?
LISA: We have really programs across five areas now so at quality for conservation and finance, water in China, a seafood initiative and wild life trade. But in each of these areas really we’ve evolved slowly I would say. As one issue… has we’ve seen our pick, taken interest or action or results, then we’ve been able to move to develop that issue and go deeper into another aspect of it. We’ve set up teams around each of these areas. China water risk is a good example where they could take forward those issues for us.
Where we don’t see NGOs already engaged, we’ve been willing to step in and create initiatives sort of ADMCF initiatives that can and take the issue in 1/2 and they have run with that issue. So it’s not as though ADMCF is sort of going deep in each one of these areas. We’ve set up teams to go deep into each one of these areas.
RICH: But how, like how from the outset how do you actually pick the issue? How do you know if you’re looking at 10 things that you should go forward this one? What is the criteria that you try and layer in so you can understand? Now’s the time.
LISA: We have to deal with the timing and also a sense of the people working in that space. We’re not in it to be competitive. We’re in it to be collaborative to work with others and to really bring together others that we feel that is the moment. We have an opportunity to…we have an opportunity to go deeper into that particular issue.
SETTING UP SUCCESS
RICH: So when you look at these, what are some of the key..and you want to have that mindset. you want to have a life after your support, after your direct involvement ends. What are some of the things you do in the beginning to maybe set that up?
LISA: Make sure that the support for the initiative…well, first we start with research. Really have an understand of what the context is and how we’re going to address it, establish the theory of change. So really understand how we are going to, what the impact is going to be what we ant to see, how we are going to address that via research and make sure that you have a broad base of collaborators. NGOs, companies, government whatever is the mix that’s going to help make that change.
Then what is the funding source? It’s not just us. Broaden that funding bucket. What is going to be the source of funding that is going to support that for a long time? Where it’s appropriate we can step back. Once we feel that something is on it’s own, we don’t’ need to be in that particular initiative. We can step back and let it take it’s course.
RICH: Speaking of funding, you are the founder of the foundation. They gave you the money to start the foundation. How is your funding changed over time? Is it a continued endowment that you can pull off of and you can only use a certain percentage or does the capital growing? Or have you actually developed a business model so that you are selling reports, your selling service, like how is that evolved over the last 10 years.
LISA: The partners absorb all of the core costs of the foundation and we direct cofunding into partner projects. So that has been our model every year and certainly a lot of funders have appreciated that because they feel that their money is supporting whatever the project is. But the reality is, that does ya know limit our own growth to a degree.
So we are thinking of about what are the alternative sources of funding. So the tropical landscape finance facility we’ve started, I hope in the future could potentially generate all sorts of revenue for the foundation. Then we have a couple of other sort of revenue driven initiatives that could provide a source of support to the foundation in the future. But all of our information and research is open source. We believe that it should be open source.
RICH: On the funding, if you think now or maybe things that you’ve tried in the past, what are the pools of funding that are the most aligned to you? Are those the ones you really need over time? Sometimes you need a lot of money and you have to make a change of tact and compromise so you can get that in. What are some of the considerations you have when you are going through that? You’re creating a business model after years of not having..I mean you have to have the budget, but you don’t have to have the business model. How do you make that work? What are some of the core things you have to have in place in order for there to be great partnership on that.
LISA: Well I have to say we have been very lucky in that we’ve had that course of source of support from the partners. We’ve also been very lucky in that we are…there aren’t many other foundations in Hong Kong that provide in then sense the same service to other US foundations or local Chinese foundations who are interested in environmental issues who want to get involved, want to see impact. We can deliver on what, we can deliver on our programs. We can deliver on action in our programs.
So they’ve seen us as very useful so actually we’ve been able to set the agenda which has been really important for us. So we haven’t diverged to meet funding, funding has come to us.
SOURCES OF FUNDING
RICH: What’s the best kind of funding for you? Is it corporate? Is it foundation? Is it government? Each one has different strings. Each one you can..what’s been one or the best one that you’re more natural to?
LISA: Most of the funding, the cofounding, has been throughout the foundations. Actually either US or local foundations. The best collaborations for us have been those where there is obviously a similar mindset and it’s been an understating, a very clear understanding, again impact and what we want to see. So being aligned with our funders in terms of what the results should be has been very important and we’ve been lucky.
KEYS TO A GREAT PARTNERSHIP
RICH: What are some of the key things that make for a great partnership or a great collaboration?
LISA: Being aligned in terms of I think the message what you want to see. Not always how you get there because everybody has different ways of working. But understanding where you want to get to and understanding what that sort of general messages is I think is extremely important.
RICH: What are the issues that you want to take up next and how are you going to go about expanding on the organization when you are already talking about budget verses business model?
LISA: I think we’ve got enough issues.
RICH: I mean is it ok to say it’s enough? Or we’ve had some conversations about you need to constantly scale. Probably the most abused term in our entire ecosystem. What does scale mean to you in that sense?
LISA: Exactly. I thought about that a lot. I’ve come to the conclusion of no need. We are happy and we can be impactful in the space we are working in now. I don’t feel the need for us to be a huge foundation. I would like to build more resources to be able to do more in the work that we do.
LESSONS TO OTHERS
RICH: In an ideal world, every investment group here would have their own foundation that is in hose supported in the same way. If you were speaking to someone who is looking to create a similar model as yourself, what are some of the key things you would tell that individual when they are talking to the LPs or the banks how to create a bit of autonomous unit that does the exact same work?
LISA: So it’s all about the people. Make sure you hire people who care about the issues who are really have the same sort of nsync with you in terms of what it is you want to achieve. Give them space to create and allow them to take risk. Because you can’t make change in this sector without being able to take risk. I think a lot of foundations forget the need to take risk.
That is the beauty of philanthropy. We can see the initiatives. We can support research. We can take risk in ways perhaps private sectors can’t and we can create change that can magnify by bringing along the private sector.
RICH: You said you could take risk that the private sector can’t. That’s kind of the opposite of what we are trained in this space. So what, can you give me an example?
LISA: Yes. For example, the tropical landscape finance facility that we’ve started. So we got a very generous grant from Convergys. Which is a Canadian government supported entity that supports innovative finance. The developed initiative finance to build a team that could help us develop tropical landscape finance facility, which as I said said is..to marry a development agenda with…to drive a development agenda with private sector capital.
It would be very hard to find a fund manager who would be able to put their own money and time into developing the type of projects that we are developing around tropical landscape finance facility. It think we’ll be able to show these transactions are real and the transactions at scale. These transactions are at scale will achieve what we want them to achieve and that they will have financial returns. But we needed the space to be able to build that.
RICH: Right now you’re not sure there will be a financial return. Let’s assume there is.
LISA: No, there will be financial return. They’re being structured as commercial, fully commercial transactions, but they are difficult and complex to build as you can imagine.
SCALABILITY OF PRODUCT
RICH: If you prove the model, what then do you think is the scalability of that same financial instrument? Because at the end of the day it’s a financial instrument. Do you foresee that you could label this thing and maybe more foundations, more both management groups, more banks would get involved and buy this product and maybe drive your issue foreword? Is that a goal? Or do you want to just get this one project done and show that it can be done in the right way?
LISA: First transaction which is a 17 millions dollar transaction in Indonesia benefits from a 50% U.S.A. guarantee. So, it does allow the private sector a certain comfort. So we believe that maybe in the future other transactions wont need that sort of comfort. That private sector will be more comfortable with this type of transaction that has a very clear environmental and social agenda as well as the financial return.
RICH: It’s really interesting actually. It also in that sense, you really are just drawing off the financial capacity…that structuring background of the group itself marrying it straight into the issues that are important to the foundation. But I have to be honest, I’m not sure where the line is between is the two groups.
LISA: Well, on this project there isn’t one. What has been amazing is also to see BMP capital market team steping up right behind us. There are structuring partner. They are arranging the green bond that will be.. is the results of…the securitization of the loans. They are selling that product to private sector. It’s been a fantastic partnership for us and hopefully there will be many others. We have quite a strong pipeline of products that will sort of be following behind.
RICH: Last question following up on that. You mention that you liked having that firewall between, but in this product it doesn’t seem like it exists.
LISA: No, you’re talking about core funds. That was how we were established. Our offices are here. ADMA Capital offices are elsewhere, but for this particular product there is no line. We are working to the same agenda.
RICH: If that one really scales out, would you say that actually that might be the next..like that’s an ideal way to go forward. Where you can bring the two organizations so close together they are actually one product and scale out as long as you remain autonomics in a sense?
LISA: I think it will be product base. Like with this product, it works well. Then as I said the 16:24 fund has a very clear environmental and social agenda. At the same time they are still our core ADM product, which work to obviously ADM Capital’s investment principals. But, this is a different type of product. It needed the grant funding in order to be able to lift it off the ground. It needed the very clear sort of ENS support initially. But hopefully future transactions so we will be…it will be easier and will be smoother I guess.
RICH: Last question. How do you keep yourself focused with so many big issues? How do you keep yourself inspired by looking at so many big issues that really are, I mean there is not a lot of happy news some days. How do you keep focused? how do you keep inspired?
LISA: I have an amazing team working across all sectors. It’s not me, it’s honestly the team. They are passionate. They take great ownership in each of the other areas in which they are working. None of us could do any of this work without that sort of determination to make change. I would say I am at heart an optimistic person. I really do, I can see the incremental change we’ve been able to make. Because of the partners ADM Capital has given us that long time horizon, I can see that we can make change over time. I remain optimistic.