Malaysia is launching a RM3 million Social Outcome Fund (SOF) directed towards social projects to assist marginalized communities in the country and that will also refund investors if their investments result is 1.5 times or more of value in terms of cost savings for the government.
Incentives Matter
The fund encourages corporations and foundations to go beyond their corporate social responsibility (CSRs) and help individuals and communities, as part of a social economy, achieve a more complete interaction with public and private sectors, the announcement said.
“It is our hope that potentially enabling social-purpose organisations (SPOs) will take this opportunity to obtain funds for their social programmes,” Minister Datuk Seri Nancy Shukri said in her speech at the launch of the Social Economic and Investment Conference 2017 held in Kuala Lumpur in Malaysia this week.
Timely Solution for the Marginalized
The announcement of the new fund may be timely given Malaysia’s recent announcement of its GDP growth of 4.5%, which is 0.25% lower than average 4.75% GDP growth in the past 10 years.
And while there is no official data for job participation rate in Malaysia, its sub-4% unemployment rate indicator does not appear to corroborate anecdotal evidence that joblessness is far higher among Malays and Indians and under-employment among Malays, Chinese and Indians, its marginalized communities.
In those communities, many Malaysians struggle on a single income, many do not receive their “minimum” monthly wage of MYR900 (US$200) and even more may suffer a projected 3.6% inflation in consumer goods following a recent consumption tax hike.
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“Agensi Inovasi Malaysia (AIM) CEO Datuk Mark Rozario said the fund will be managed by AIM and a committee will be established to approve proposals as the fund will be seeking proposals from SPOs whose programmes are funded by impact investors.
“We’re not limiting it (SFO) to any number (of companies), it depends on what sort of proposals come and the outcome that they deliver. This is not money to be given as grants but as a reimbursement to the impact investors based on the outcomes delivered,” he said.
There are 200 social enterprises in Malaysia but there are still organisations out there that have not psychologically categorized themselves as social enterprises.
The SOF is based on AIM’s Social Progress Assessment (SPA), which commenced concurrently with the SOF project. The scope of the SPA is to identify key social issues and direct and tangible costs incurred by the government.
The SPA quantified the impact of social interventions, starting with identifying and analysing over 500 social indicators, their baselines and the unit cost of delivering associated social services by the government.”
Source: Sun News Daily Malaysia
