Media release: Impact investors should look to eye health
Ending avoidable blindness is an ideal target for impact investors looking for a measureable social benefit as well as a financial return, a new report produced by The Fred Hollows Foundation and the UK organisation Social Finance has revealed.
The Power of Impact Investment to Improve Vision report provides new ideas about how eye health can be financed and outlines a number of opportunities for impact investors in the sector.
“Impact investing is profit with purpose. It’s about extending finance to entrepreneurs and enterprises you wouldn’t normally extend it to with the intention of targeting a social outcome while generating a financial return,” Brian Doolan CEO of The Fred Hollows Foundation said.
“By bringing a market-based approach to help fund the essential services that people in low and middle income countries need, we can change the grant making model of many international development NGOs.”
The report identifies the treatment of cataracts, uncorrected refractive error and trachoma as being particularly well suited to the impact investment model.
Treating these prominent causes of avoidable blindness achieves significant social impacts that are easily identifiable and measurable for a relatively low cost. In each case there is a real prospect for a financial return.
There are several features of eye care service provision that are well suited to impact investment: there are clearly measurable and attributable social outcomes, and there can be real prospects for financial return.
In cataracts, for instance, about 300 social enterprise hospitals already exist that have proven that it is possible to provide free surgeries to the poorest of the poor while also remaining financially solvent through the user fees of other patients.
To date, capital constraints have been the key barrier to greater size and impact of this model. In general, hospitals have had to rely on slow, unreliable or relatively expensive forms of finance, such as donations and grants and local debt to purchase property and equipment.
The very purpose of impact investing is to overcome these constraints using existing financial tools, but with a new approach.
“Hospitals receiving loans may not be able to provide investors the same financial return as other investments,” Mr Doolan said.
“But they are viable businesses that service a critical need and can provide investors with something else: they can demonstrate a social benefit almost immediately by restoring vision to someone in need.
“That social impact is valuable and worth something to this new breed of investor.”
With more than 10 million people in developing countries estimated to be blind due to cataract, the potential social and economic impact of turning this around is huge.
Impact investment is an emerging market waiting to be tapped and eye health is well placed to capitalise on it.
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