UK Foreign and Commonwealth Office

Social Enterprise Pilot Project

Implementing Partner Terms of Reference (ToRs)

UK Foreign and Commonwealth Office (FCO)

Social Enterprise Pilot Project

Implementing Partner Terms of Reference (ToRs)

Table of Contents

1.Introduction

2.Objective

3.Target beneficiary(ies)

4.Scope of Work

4.1.Element 1: Project Design

4.2.Element 2: Project Implementation

4.3.Element 3: Project Monitoring and Evaluation

5.Project Management

5.1.Timeframe

5.2.Reporting

5.3.Phases

5.4.Constraints and Dependencies

5.5.Delivery Mechanisms

6.Budget

7.Requirements

7.1.Flexible and Adaptive Programming

7.2.Value for Money

7.3.Gender Equality and Sensitivity

7.4.Conflict Sensitivity

7.5.Break Points

7.6.Staffing

8.Duty of Care

9.Submission of Proposals

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Social Investment Fund Pilot Project

Implementing Partner ToRs

  1. Introduction
  1. The UK Foreign and Commonwealth Office (FCO) seeks to launch a pilot project (“the Pilot”) to support the nascent social enterprise (SE) sector in Lebanon.
  1. This proposal is based on recommendations from initial research undertaken by the FCO on Lebanon and the region.
  1. It finds that although still young, in the West the SE and wider social investment sectorsare now sufficiently mature to have produced enough data to substantiate conclusions regarding the viability and efficacy of the concept and its various models.
  1. In fact, an increasing amount of evidence suggests that the social enterprises – perhaps counter-intuitively –are now regularly outperforming Small- and Medium-sized Enterprises (SMEs) across almost all indicators, while simultaneously and in a self-sufficient, sustainable manner generating a wide range of economic and social benefits.
  1. Similarly, the sustainable investment sector is now the fastest-growing segment of the global investment industry and represents today a USD 20 trillion market, in which strong sustainability investments have commonly outperformed weak sustainability investments.
  1. The UK is regarded as a global leader in this field with the most developed social investment market in the world.
  1. It also finds that in MENA the SE sector is extant but has the potential for considerable development. There are numerous successful social enterprises, and a support network for commercial entrepreneurs, which includes a well-established and diverse array of financial assistance institutions and tools to SMEs and start-ups.
  1. However, social enterprises in Lebanon, while sharing many of the constraints that their strictly commercial SMEs cousins face, encounter specific, and additional, challenges.
  1. These include a lack of definition of the model, of recognition of the sector, and of a developed support system along with limited access to, and availability of, appropriate finance - which could enable its growth.
  1. Also significant regionally is the regulatory and legal climate, which is yet to provide recognition, definition, protection or incentives for the sector.
  1. More broadly, there is a lack of reliable data available concerning economic and social matters. This complicates any strategic assessment of what kinds of investment in what sectors drive most economic and social benefit, and efforts to shed light on the relationship between the two, in Lebanon.
  1. Notwithstanding these constraints, we assess on an initial basis that Lebanon is among if not probably the most suitable country in MENA for thedevelopment of the SE sector, with the greatest prospects of success.
  1. This is owing to numerous factors, including: a human resource base with a celebrated national talent for entrepreneurship; the existence of a number of successful social enterprises and an extant but undeveloped ecosystemfor SE growth; a potential ready market for social enterprise services;high unemployment; a well-developedbanking system with domestic investment options, among others.
  1. The proposed project relies on the assertion that social enterprise and investment – if done correctly, at scale and if they achieve sufficient momentum – could generate the necessary critical mass to advance furthersignificant economic and social development in Lebanon, and in a self-sufficient, sustainable manner.
  1. In economic terms, it could constitute a new sector which could, by directing investment into economically and socially-productive sectors, help develop the Lebanese economy.
  1. In social terms, it could, by cooperating with government and the private sector, assist service delivery, reduce income disparity and other inequalities, and help alleviate a range of social and economic problems, specifically those affecting youth and women, whilst simultaneously empowering the agency of a wider number of youth and women to engage in socially and economically beneficial activity.
  1. Objective
  1. The purpose of this contractis to design, deliver, monitor and evaluateaflexible and adaptive pilot project as a market penetration test which would test the suitability and potential of the social enterprise model in delivering social and economic benefit and enhancing social cohesion, in a self-sufficient and sustainable manner in Lebanon.
  1. It will do so by producing quantitative and qualitative evidence which demonstrates what kind of investments in what sectors produce the most social and economic return.
  1. This will determine the validity of social enterprise as a model capable of delivering genuine and visible economic and social development in Lebanon and demonstrate the financial and commercial viability of the social enterprise model to public and private sector financiers.
  1. It will build a solid evidence base for the use and to build the support of various stakeholders, which shall include: Lebanese social entrepreneurs (both actual and potential), the UK government, other government donors, international financing institutions, the Central Bank, commercial banks and other private sector investors, Lebanese government actors, the national and international media, the Lebanese population, and others.
  1. It will then be used for a range of purposes, including assisting in raising finance from public and private sector donors; underpinning strategic communications efforts to promote the sector both nationally and internationally; and helping social entrepreneurs in decision-making, to enable them to decide in which sector, and how, they should engage (thus saving them the time, expense and effort of conducting their own market penetration tests).
  1. Target beneficiary(ies)
  1. The primary beneficiaries of this pilot shall beLebanese social entrepreneurs, both actual, and potential, with the long-term aspiration of developing a recognised new sector and within it, of increasing the number, range, diversity, activity, growth potential and size of social enterprises.
  1. Existing research concludes that, in Lebanon and regionally, social entrepreneurs are overwhelmingly young, ambitious and male. They mostly come from middle to upper socio-economic backgrounds, and have graduate degrees. Many meet during their studies. Typically, they formulate their ideas for a social enterprise during some form of engagement with community problems or as a result of personal experience or affliction caused by a social problem they seek to address.
  1. The same research also suggests that many founders of social enterprises are motivated by the challenge of instituting sustainable development, a goal to which they are personally and financially committed. At start-up, many social enterprise founderscommit their own money to fund the initial phase of building a business.
  1. Within this demographic, beneficiaries are therefore young: we would seek to increase youth participation (between the ages of 18-27), and the number of female social entrepreneurs. It is also possible and desirable to encourage an increasing number of social entrepreneurs from a lower socio-economic status.
  1. Secondary beneficiaries shall be dependent on the activities of the social enterprises supported: however, these are likely to be either a specific section of Lebanese society (the marginalised, disenfranchised, or afflicted, or the lower-middle classes), or a broader community.
  1. Tertiary beneficiaries, of both the pilot and of the proposed Fund, shall be the Lebanese economy and the Lebanese population as a whole, as the recipients of a wide variety of social and economic benefits engendered by the social enterprises.
  1. Scope of Work
  1. The Implementing Partnershalldesign, deliver, monitor and evaluatea pilot project in the most economic fashion with available funds.
  1. While the FCO has conducted preliminary research on the social enterprise sector in Lebanon, which draws on a growing body of research on the sector both in Lebanon and regionally, there is a necessity for more detailed, granular data on the sector, and specifically of a quantitative nature, particularly relating to the actual and potential social impact of the sector.
  1. Specifically, it would be beneficial to obtain:
  1. Definition:
  • a clearer definition of what social enterprise is in Lebanon, according to practitioners
  • broader recognition amongst the wider population; how a common and widely understood concept of the model could be communicated
  • a comprehensionhow the model could evolve in the local context
  • what kind of models could work in Lebanon, including an exploration of the viability of the development of the Community Interest Company (CIC) model and other forms of asset lock structures

along with an understanding of the following:

  1. The Current Dynamics of the Economy:
  • How the economy currently works
  1. Actual and Potential Impact:
  • What impact social enterprise is currently having,and its existing social and economic contribution
  • Actual and potential demand
  • What are their gaps between market demand and existing supply
  • What its potential impact could be
  • What role the social economy/enterprise sector could play
  • The sector’s growth potential, and
  • How the development of this sector could affect the Lebanese economy and society.
  1. Strategic Communications:
  • What kinds of strategic communications and other efforts are most effective in building market (consumer) appetite and awareness to support the emergence of the social enterprise and investment sectors in Lebanon
  • What would be most successful in promoting recognition of and interest in the value of the model
  • How most effectively to communicate social enterprise success stories
  • What kinds of social enterprises, and with what innovative products, services, and models, are most successful in affecting and changing attitudes
  • How to attract investment into this sector
  • How to measure any increase in awareness, recognition, demand/market appetite
  1. Measuring Social Impact:
  • What the best tool relevant to the context is to measure social impact, and how to tailor it if necessary to suit the context and the specific stakeholders at hand
  • What kinds of investment in what sectors are most effective in delivering social or economic impact, and what kind of impact (both a quantitative and qualitative analysis) (in order to prioritise investment sectors and refine methods to ensure the greatest social and economic impact)
  1. The Value Proposition:
  • How best to develop and sell the notion of “social value” to a variety of stakeholders, and what other information do we need to build the best “investment” case (for example, risk and return metrics for institutional investors and specifically, Lebanese commercial banks)
  • How to measure commercial/financial performance relative to the sector, and how to adopt a “blended” model (which combines social impact with commercial performance)
  • What KPIs should be used, can we develop a standardised model by sector, or, as is generally recommended, should we accept that KPIs will vary from social enterprise to social enterprise and therefore place the onus on the social enterprise to develop their own KPIs
  1. The Tools:
  • What kinds of finance are most effective in supporting social enterprise, and how to enable finance to ensure the sector is sufficiently well-served to ensure cooperation rather than competition
  • What kinds of other support and specifically what kinds of incubation and acceleration services are most effective in creating successful social enterprises
  • Can we use and adapt existing services, or is there a need to develop a new suite/support chain
  • How best to strengthen and develop the existing network and ecosystem
  1. Outlined below is a range of activities which could be structured under three components:
  1. Support to Social Enterprise
  2. Research and Analysis
  3. Public Outreachand Strategic Communications
  1. We foresee that:
  1. Support to Social Enterprise

-Would include the design and implementation of a mechanism and process to:

  1. evaluate potential enterprises for funding,
  2. provide seed capital as grants to enterprises to i) start up, ii) scale out, or iii) scale-up,
  3. to design and finance new forms of support or enable and enhance existing forms of support (ie incubators and accelerators), if more economic, and as needed.
  1. Research and Analysis

-Would include:

  1. The conduct of a representative sample analysis which could provide a sufficient range of data would include research and analysis of existing data, a gap analysis of missing necessary data, and a means as to how we might obtain this missing data through implementation of a), as well as capturing and analyzing this data to form a body of evidence, in order to establish reasonable answers to the questions posed in 4. Scope of Work.
  2. The use of a tool (such as the Social Return on Investment, or similar), to measure economic and social impact of the activities described under component i).
  1. Public Outreach and Strategic Communications

-Would include:

  1. an analysis of the most effective means to raise awareness of social enterprises, the sector and its value, and demand for social enterprise, using both traditional and new media, through the implementation of strategic communications “test cases” to support those of the designated social enterprises under component i).
  1. The FCO shall not restrict the choice of sectors for this pilot project in conducting the representative sample analysis. However, the project proposal should provide a reasoned assessment supported by evidence behind the choices of sectors for the operation of the Pilot. This shall demonstrate how investment in social enterprises operating in the sectors of choice is most likely to deliver the most economic social impact compared to other sectors. Moreover, another sector(s) may need to be included to act as a control.
  1. The implementation of the Implementing Partner’s work shall be divided into three elements:

4.1.Element 1: Project Design

  1. Drawing on existing literature and research, the Implementing Partnershall deliver an evidence-based project design which demonstrates a flexible and adaptive approach to deliveringUK’s objectives in Section2. The Implementing Partnershall design a project with a demonstrable strategy for how the project will learn and adapt to the changing context and needs of the beneficiaries it is targeting; including (but not restricted to) clear mechanisms for collecting and learning from beneficiary feedback and the ongoing successes and failures of the project.
  1. The Implementing Partner will also be expected to demonstrate in their project design a collaborative and inclusive approach towards all social enterprises and other organisations represented in the sector, given that the goal of the Pilot is to inform the design of support structures and processes which shall benefit the sector as a whole.
  1. The Implementing Partnershall also be expected to mainstream gender throughout the intervention’s design. Mainstreaming gender equality means ensuring that women’s, men’s, boys’ and girls’ concerns and experiences are integral to the design of an intervention with the aim of making sure inequality is not perpetuated, women’s and men’s different rights and needs are recognised and addressed, and women and men share benefits, with the overall aim of promoting and impacting positively on gender equality,
  1. In practice we shall leave it to the Implementing Partnerto decide on how best to mainstream gender into the design, butthere is an expectation that gender mainstreaming will be based on demonstrable gender analysis and be reflected in the logframe.
  1. This design shall include a theory of change and logframe that meet the FCO’s impact objective set out in Section 2. The logframe will include quarterly milestones.
  1. During the design the Implementing Partnershall develop an inception report. As a minimum, the following content should be included in the report:
  • A Narrative Report explaining the intervention, including a Theory of Change
  • Initial Logframe (including risk matrix)
  • An analysis of the different Stakeholders
  • Final Budget
  • Final quarterly/annual payment plan
  • Delivery Plan for the next 6-12 months
  1. The implementing partner shall be responsible in addition for developing Key Performance Indicators (KPIs) to measure the development and impact of recipient social enterprises, to be agreed with the FCO. These shall be regularly reviewed by the FCO throughout the life of the Pilot.

4.2.Element2: Project Implementation

  1. The Implementing Partnershall be expected to deliver the project’s initial design commitments, including its strategy for delivering a flexible and adaptiveproject and mainstreaming gender set out under Element 1.The implementation of a project is defined as the “delivery of project objectives, including relationship management, financial management, management of resources, risk management, and monitoring and evaluation plans”.

4.3.Element 3: Project Monitoring and Evaluation

  1. Throughout project implementation, the Implementing Partnershall need to monitor and evaluate (M&E) the intervention. Monitoring is defined as “tracking progress towards targets – in real time- to allow for corrective action to be taken” and Evaluation the “continuous cycle of evaluating performance, learning and sharing lessons to adapt implementation”.As part of its M&E, the Implementing Partner will need to demonstrate in reporting how the project is flexing and adapting to the changing needs and context of the social enterprise sector and Lebanese context and mainstreaming gender throughout the project. This shall include age and sex disaggregation of data.
  1. In addition, the Implementing Partnershall need to work with an independent evaluator who will be contracted by the FCO to assess the mechanisms the Implementing Partner has in place as part of itsflexible and adaptive programming strategy and evaluate the overall impact of the project. As part ofthis, the Implementing Partnershall be required to facilitate the work of the evaluator and respond when necessary to recommendations.
  1. The FCO would also like to draw on the experience and expertise of any potential Implementing Partner, however, and are open to the Implementing Partner challenging our suggested thinking for achieving the project’s impact so long as this is well-reasoned and evidence-based, with a clear theory of change or rationale.
  1. In the proposal and project design therefore, the FCO expects implementing partners to clearly articulate each project component’s sustainability and rationale for this.
  1. Project Management

5.1.Timeframe