PRG III: Investing in Dignified Jobs for All

In a world where less than 5% of venture capital focuses on job creation, Upaya is one of the exceptions with a laser-sharp focus on dignified jobs for all. Structured as a nonprofit and using the venture capital playbook, Upaya is able to effectively produce social impact returns (# of jobs created) and financial returns (interest earned and exits secured from investments) while helping grow the social entrepreneurship ecosystem.

As the common saying goes, "Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime." It is proven that true empowerment happens when a person previously unemployed or earning less than $2.15/day is able to find a dignified job with fair and predictable wages and a safe environment in their community. To enable that, scalable businesses need to exist or be built within these communities that can stand the test of time.

Founded in Seattle in 2011, Upaya Social Ventures ("Upaya") is a USA 501(c)(3) nonprofit organization that is on a mission to create dignified jobs for people living in extreme poverty by building scalable businesses with investment and consulting support.

Upaya focuses on the “missing middle” businesses creating safe, stable, inclusive, and rewarding jobs because it sees the opportunities for impact at scale, while generating stable returns. These businesses are often overlooked as they are too large for microfinance and too small for traditional bank financing. Upaya identifies these scalable businesses in marginalized communities and provides access to patient capital and deep advisory support to help them scale their business and impact. To date, Upaya has invested in 42 early-stage businesses creating over 51,222 jobs, and has exited a quarter of the investments, showcasing the promise in its model. 

Upaya achieves it through four main functions - The first, identifying impact-driven businesses that have the potential to create at least 1000 jobs in the next 7 years for people living in extreme poverty. Second, strengthening these businesses through a theme-based Accelerator to improve investment-readiness, financial and impact management, and leadership development. Third, investing return-seeking, patient capital in the most promising businesses through Upaya’s Pool of Recoverable Grants (“PRG”). Lastly, extending post-investment deep advisory support to our portfolio companies to improve scalability and possibility of an exit. 

PRG is a pool of donations/grants that Upaya secures from foundations and donor-advised funds to make (concessionary) return-seeking investments in impact-driven businesses. Each PRG has a 10-year lifecycle and commits to return the grant to the donor with a capped 5% return or recycle the grant for perpetuity like an evergreen fund. If not returned within the 10-year period, the recoverable grant is automatically converted into an unrestricted grant to Upaya to be used for further investments only. Today, PRG I and PRG II are cornerstones of Upaya's impact investing strategy with more than $2M in pooled philanthropic capital, driving enterprise growth, attracting investment, and enabling successful exits.

Additionally, Upaya is developing and participating in innovative initiatives to create systems-level change such as; a coalition of investors and ecosystem partners focused on job creation, a technical assistance facility for sanitation worker-first enterprises to support circularity in fashion, and an alliance addressing challenges faced by micro-entrepreneurs in accessing affordable and appropriate clean energy solutions in Africa and India.

• Vision: To achieve a world without extreme poverty where people, households, and future generations thrive with resources to live fulfilled lives.

• Goals:

  • Households emerge from and stay out of extreme poverty.

  • The next generation experiences a better quality of life and improved prosperity.

• Inputs: Early-stage small and growing business (SGB) entrepreneurs working with extreme poor communities, along with team, funding, and expertise.

• Activities:

  • Identification: Identify early-stage SGB entrepreneurs in marginalized communities with job creation potential for the poorest.

  • Acceleration: Provide instruction in financial management, impact management, and leadership development to strengthen SGBs.

  • Advisory: Extend deeper advisory support to investees for the first two years.

  • Investment: Invest long-term patient capital in the most promising SGBs.

• Outputs:

  • Companies have the potential to create 1,000 jobs in 7 years for the extreme poor.

  • Entrepreneurs can measure and articulate social impact, possess financial savvy and leadership skills.

  • Small and growing companies are financially viable with scalable operating models.

  • SGBs are able to create at least 1,000 dignified jobs, providing steady income for the extreme poor.

  • SGBs are able to more than double revenues, achieve profitability, grow operations, and raise follow-on impact investment.

• Outcomes: (See previous response for a detailed list, but in summary: improved household financial stability, increased savings, better quality of life, and enhanced opportunities for the next generation).

• Impact: Households emerge from and stay out of extreme poverty, and the next generation experiences a better quality of life and improved prosperity.