Spotlight on social business: The why and the what of YGAP’s business model

Our core work and recent projects in the Pacific have been focussed on developing sustainable business models, demonstrating social impact and implementing local solutions. So, it was music to our ears when the opportunity arose to speak with Elliot Costello, the CEO at YGAP. During our conversation, Elliot spoke to the pioneering ways in which YGAP are approaching international development, from who they collaborate with to how they raise funds to their recent merger with Spark International (a different Spark!). We’re delighted to share some of YGAP’s insights and experiences as they hold relevance to the rest of the sector, particularly when it comes to ways to collaborate and generate revenue.

Please could you tell us a bit about yourself and your role at the YGAP?

I’m currently the founding CEO at YGAP and one of three founders. As we’ve recently merged with Spark International, I guess there are technically five founders. For five years, from 2008 to 2013, I was a volunteer; we all were – the entire YGAP team was volunteer-based. In 2013, I moved into a full-time role with the organisation as the CEO. Since we began, we’ve built a movement of young Australians who are committed to taking action to end global injustices in our lifetime.

For those who aren’t familiar with YGAP, could you please introduce the organisation?

We’re an organisation that finds and backs early stage impact ventures across some of the world’s toughest communities. This means we work with local leaders and impact entrepreneurs across Africa and Asia. Fundamentally, we focus on local leadership because we believe that local people have the solutions for local problems. This is really important because – despite good intentions, ideas and education – the neo-colonial approach to international development hasn’t worked. The best answers to problems connected to poverty live in the hearts and minds of local people, who are often affected by and have a deep understanding of the issue at hand.

YGAP’s business model appears to have partnerships at its core. What is YGAP’s approach to partnering?

Partnerships are at the heart of what we do. When we are finding and backing local enterprises, that’s done through a fundamental belief that that they have the answers to the problems their communities are facing. Our role is to help unlock some of those solutions. As well as partnering with local leaders, we have a number of other partnerships, including with corporates, agencies, high net worth individuals, trusts, foundations and the government.

First of all, it is crucial that we partner with organisations and individuals who are passionate about and aligned to the work that YGAP does. Then it is all about investment in the partnership – building a strong relationship that is fundamentally structured on trust.. With some of our best partners, we have spent years getting to know one another before there has been any transfer of money or resource. In line with this and to ensure our partnerships are effective, we employ two partnerships manager that work day in and day out to meet the needs of our partners.

YGAP is known for being innovative and entrepreneurial in how you source and distribute funds. Can you please talk to how YGAP generates revenue to support your mission?

We’ve taken a unique approach to our development approach, how we use funds and our fundraising model. We’ve decided as an organisation that we shouldn’t be dependent on traditional sources of funding. The way we operate is geared around answering the question, how can we build sustainable and profitable social enterprises? One of the ways we answer this is by running creative campaigns, predominantly peer-to-peer fundraising campaigns that are unique, innovative and irreverent. We also have Feast of Merit, our social enterprise restaurant, which generates revenue for our development work. Another pillar of ours is what I mentioned earlier – building really strong, sustainable relationships. So, if one pillar isn’t pulling its weight, we have two other levers. For others that don’t have this variety, it can unfortunately reduce the impact they deliver.

How does YGAP approach social impact assessment?

We are very strict with how we measure impact. To be congruent with who we are, we believe we have to measure impact in a clear and consistent way that’s then communicated to our donors. When you are looking to improve the life of someone living in poverty, it’s not about giving them a backpack and telling them to have a good day. It’s a life benefitted but it’s not a life improved. We are asking ourselves how do we shift someone from living in poverty to be out of poverty? That means we are focused on ventures in healthcare, education, housing and job creation. It is about significant and measurable improvement. For example, providing a child with access to education for 13 years, primary and secondary school, is a life improved. We also sign up to international impact frameworks to measure our impact.

Can you comment on any trends in social impact assessment that you are witnessing? Do you have any predictions for the future of this space?

The major trend we are seeing is a huge awakening in the space whereby individuals and organisations are required to have more sophisticated and diverse impact measurement. That’s a really healthy space for the sector to be moving into. Over the last ten years, I’ve seen such increased sophistication of donor requests and requirements. They really are conscious of where there money goes and what it is being spent on.

YGAP merged with Spark International in 2015. What could other for-impact businesses learn from your experience with merging?

We have over 600,000 non-profits in Australia if you include the religious and community sporting groups. That’s such high intensity around resourcing and competition. We brought two organisations together so we can rapidly grow our impact. Spark International have world class expertise at using entrepeneurship to solve problems connected to poverty and at YGAP, we are succeeding in fundraising and building a movement of young people. As individual entities, we estimate that we have improved 35,000 lives in total. Now, since the merger, we are talking about 500,000 lives improved. That courage to move away from brands, boards and egos has enabled us to propel our impact. 

How can individuals get involved with YGAP?

We do have a lot of touchpoints and chances for people to get involved. Our Polished Man campaign runs in October and, if people want to have a socially responsible meal in Melbourne, they can come to Feast of Merit. Other opportunities are listed on our website – www.ygap.org.

What makes YGAP different?

Our major point of difference is that we are prepared to take risks and we are happy to stand out and be bold. We are also quite irreverent at times. We strongly believe that the sector needs to leverage the best parts of the private sector to maximise impact.

What does the future hold for YGAP? What’s in the works?

We’ve just launched a brand new website, which people can check out at www.ygap.org. We are also launching a female-led accelerator program, YHer, in Bangladesh and the Pacific this year. We tested YHer in Africa last year, with phenomenal results. It was the first time we had a female-focussed entrepreneurship program and with the success experienced in Africa, we’re super excited to launch it in other parts of the world.

Doing something unique or innovative in the social sector? Interested to share your insights more broadly? Then please reach out to us by emailing heather@sparkstrategy.com.au.

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