２０１９Annual Report

SIIF: Japan Social Innovation and Investment Foundation
6F M-City Akasaka 1-chome Building, 1-11-28 Akasaka, Minato-ku Tokyo 107-0052, Japan
Tel. +81-3-6229-2622 | Fax. +81-3-6229-2621 | Mail. info@siif.or.jp
http://www.siif.or.jp

Building a Market for Impact Investing and an
Impact-oriented Framework for Resource
Circulation in JapanI am pleased to present our Annual Report 2019 to ourstakeholders.
The Japan Social Innovation and Investment
Foundation (SIIF) was formed from the merger in
October 2019 of the Japan Social Impact Investment
Foundation and the Institute for the Advancement ofSocial Innovation, marking a new start for theorganization. Through this merger we have been able
to put in place a structure to move forward with thefurther expansion of our mission from the previousorganization’s focus on creating a market for impact
investing in Japan, to building a mechanism forcirculating social and economic resources in a way thattranscends the framework of self-help, public help andmutual help, and that aims to create a society in whichsocial problems are resolved and diversified value
creation occurs spontaneously and sustainably. I am
deeply grateful for your support, without which thesechanges would not have been possible.
Looking back at fiscal 2019, there was a global trend of
promoting activities aimed at the creation of a better
society, such as SDGs and ESG investment. One
could also say that it was a year in which it became
widely accepted that corporate activities’ negative
impact on society should be eliminated. Buoyed by thistrend, the market for impact investing recorded
dramatic growth, primarily in the United States andEurope. In Japan also we are seeing a rise in interest,
albeit gradual, across society, with not only major
financial institutions but also community foundations
entering the market. However, despite the global
market for impact investing having grown to an
estimated total of ¥54.0 trillion, it must be noted thatthe market in Japan is believed to be no more than¥317.9 billion, and is still undeveloped.
Faced with this situation, SIIF implemented thefollowing initiatives in fiscal 2019 in order to provide aforward-looking model for the impact investing market
in Japan.
◎ Began full-scale management of social impact funds
created in cooperation with financial institutions, etc.
◎ Created and made proposals for an impact investingmodel that utilizes dormant deposit accounts (aninitiative in which we have been involved since theplanning stages of the system), and was selected asan Organization Distributing Funds.
◎ Created Japan’s largest social impact bond (SIB)
partnering with companies, and the first SIB in theworld to support giving up smoking, which werecreated and financed jointly with local governments
and business operators.
◎ Provided financing and initiated support programsfor human resources and organizations to build newmechanisms to drive circulation of regional
resources such as personnel, nature and culture.
At the Osaka G20 summit in 2019, Prime Minister Abe
declared Japan’s intention to be a leader in theinternational discussion and investigation of diverse
and innovative means of funding, including impact
investing and the use of dormant deposit accounts, inorder to secure the funds necessary to resolve
problems at the global level. This provided fresh
impetus to the ongoing activities of SIIF, and we aredetermined to continue moving forward to play a keyrole in the impact investing market.
Since the beginning of the year the global spread ofnovel coronavirus has had an impact not only on theway we work and live our lives, but even on our values.
I feel that each and every one of us is beginning toconsider the question of what a better society might be.
In addition to creating new model projects thatencourage the circulation of funds, people, knowledge
and other resources in pursuit of a better society, andmaking pump-priming investments in them itself, SIIF
will broaden the scope of such case studies to include
a greater number of collaborators. In addition, by using
research and policy proposals to put in place anenvironment that allows the expansion anddevelopment of model projects, we aim to build an
ecosystem for the circulation of resources in which theresolution of social problems and the creation of value
occurs autonomously and sustainably.
I myself was passed the baton from Mariko Bando, theinaugural Chair of Executive Committee, in June 2020and I will lead SIIF to achieve its mission by fulfilling
the role with which I have been entrusted to the best of
my ability.
It is my hope that this annual report will help readers
attain a better understanding of SIIF, and encourage
their continued support going forwards.

Chair of Executive Committee, SIIF
Shuichi OHNO

*What is impact-oriented resource circulation?
Refers to activities aimed at resolving social problems and creating value that emphasize social impacts, and the circulation of funds that cannot be described as investments (funds thatare close in nature to donations or subsidies), of human resources and knowledge and of other social, human and emotional capital whose value cannot be measured in economic terms.
The previous iteration of SIIF also aimed to build a market for impact investing, but since the merger we have also been considering ways of support that include more flexible provisionof funds, by which we mean methods of providing funds that should not be called “investments,” because material financial returns cannot be expected (for example, in situations where
only the principal is repaid), but that require a greater level of responsibility from the recipient of funds than would donations or subsidies. We have positioned this statement at the
beginning of the document because our goal is an environment in which more flexible approaches to providing funding that take into account the risk tolerance of the provider of funds
can be utilized for the resolution of social problems.

1

Capital For
Social Innovation

２０１９

An n u a l R e port

1

Message from the Chair of Executive Committee

2 Contents
3 Vision/Mission
4 Five strategic themes
5 Results of activities (Fiscal 2017-Fiscal 2019)
7 Impact investing11

Overview of impact investing activities

1 2 Impact investing case studies
1 5 Social impact measurement/management
1 7 PFS/SIB
1 9 PFS/SIB case studies
21

Alternatives

23 Progressive philanthropy
24 Global partnerships
25 Organizational summary/Financial status

2

Who we are“Impact” signals our intent for
the future.

Five strategic themes

for accomplishing our mission

In today’s world we are seeing the end of an era in which economic value wasplaced above all else, and the emergence of a diversity of benchmarks to measurevalue, such as society, the environment and culture. Social impact means positivechange that is not limited to economic value. The meaning of this term, which is not
yet clearly defined, is something that each and every one of us chooses and

1 Impact investingThree-dimensional investment
structures experiencing global growth“Impact investing” aims to generate simultaneous
social and economic impacts alongside financial
returns. The objective of SIIF is to create projectmodels in Japan and to expand the market.

creates. It also signals our “intent for the future,” as it were.

VisionTo build the foundation for asociety in which the resolution ofsocial problems and the creation ofvalue take place autonomously andsustainably
The goal of SIIF is an inclusive society in which the
dreams of both individuals and communities are
realized. We believe it is a society that individuals
and communities must continually seek, choose
and create for themselves.

MissionTo build an ecosystem for thecirculation of social and economic
resources that transcends theframework of self-help, public help
and mutual help
Self-help centered on the market economy. Publichelp based on a centralized system of redistribution.
And mutual help and reciprocal aid, which are a formof interdependence at the individual level. SIIF aims
to build a new model for the circulation of resources
such as funds, people, and knowledge thattranscends these frameworks, and to present diverse
benchmarks for measuring the value of social
outcomes.

3

impact2 Social
measurement/management

Measurements designed to grasp the qualitative &quantitative social impact generated by projects
and activities, and social impact management forthe continuation of activities that utilize thesemeasurements to enhance social impacts. We areworking on the practice of both in Japan, as wellas on knowledge development.

3 PFS
SIB

Contributes to building reform mechanisms formore results-oriented public services, such as byusing contracts in which payments areproportional to successful social outcomes (PFS),
and methods for sourcing funding from investors
on such occasions (SIB).

Presenting new benchmarks formeasuring value

Paradigm shift in the public sector(Pay-for-success) contracts(Social impact bonds)

4 Alternatives

We are working to build mechanisms and projectmodels to express the value in social, natural,cultural, human, and emotional capital in a waythat would be difficult using an economic capitalist
approach.

5 Progressive philanthropy

We will provide backing for philanthropic activities
that generate sustainable social impacts, so as toenable the transformative effects of individual
donations and charitable activities byprivate-sector foundations.

A new economy supported by theexchange of value other than money

Intentional funding drives innovation

4

Five strategic themes and main results of activities(Fiscal 2017-Fiscal 2019)
Five strategic themes

1

Impact investing

Fiscal 2017
Impact Investing Forum 2018 held
Investing in the “Plus Social Investment” platform for
impact investing for communities in which it is held

Fiscal 2018
The GSG Japan National Advisory Board held ameeting with the G20 Development Working Groupon the theme of impact investing

Fiscal 2019
Established “HATARAKU Fund” impact investing
fund aimed at resolving social problems related to
the life events of working people
Selected as an Organization Distributing Funds for dormant
deposit accounts
Began project to support growth of social businesses forrevitalizing regions

Invested in program to support startups by single
mothers
Impact Investing Forum 2019 held
Conducted survey into consumer awareness of
impact investing
G8 Social Impact Investment Task Force (now the Global
Steering Group for Impact Investment, or GSG)

impact2 Social
measurement/management

3

PFS (Pay-for-success) contracts/
SIB (Social impact bonds)

4 Alternatives

published “The Current State of Impact Investing in Japan 2018” and “Position Paper on Expanding Impact
Investing”

Agrees to introduce social impact measurement in
Healthcare New Frontier Fund established by
Kanagawa Prefecture“Healthcare New Frontier Fund Impact Report
2018” published

Chief sponsor of “Social Impact Day” held by Social Impact

Measurement Initiative (SIMI; now the Social Impact Management Initiative)

The City of Kobe issued a social impact bond aimed
at preventing progression of severe diabetic
nephropathy

Hiroshima Prefecture and six local governments
within the prefecture issued a social impact bondaimed at raising screening rates for bowel cancer

The City of Hachioji introduced a social impact bondaimed at raising screening rates for bowel cancer

The City of Okayama partnered with companies toissue a social impact bond that uses health points

Made policy proposals through participation in Council on

Investments for the Future, etc., issued survey reports, and held seminars

The City of Toyonaka issued a social impact bondaimed at supporting those trying to give up smoking

Launched “Hallucigenia Lab” seed accelerator
program for research and development of new
mechanisms for resource circulation
Invested in ADDress Co., Ltd., which operates aplatform for enabling residency across multiple
locations by utilizing unoccupied housing

5 Progressive philanthropy
5

Began investigation into philanthropic services forhigh-net-worth individuals

6Strategic theme ❶Three-dimensional investment structures experiencing global growth

Why is impact investing necessary today?

Impact investing

It is estimated that a maximum of $7.0 trillion is needed annually to achieve the Sustainable
Development Goals promoted by the UN, and there is considerable expectation that the use of private
funds will help accomplish this. Moreover, the interest of millennials in social issues is growing, andimpact investing is being viewed as a market with growth potential.

Impact investment is investment that aims to generate positive and measurablesocial and environmental impacts in addition to financial returns. Traditional

Millennial generation withinvesting is measured on the two dimensions of risk and return, but impact investing

an interest in sustainable

is based on measuring the three dimensions of risk, return, and impact.

investment

95%

Returnct

pa

ImAnnual investment neededto achieve sustainable
development goals
Up to$7.0 trillion

Source: 2019 Sustainability Report, Morgan Stanley

Four core characteristics of impact investing(annually)

Source: World Investment Report 2020 UNCTAD

Uses clearly intentioned investments to contribute to positivesocial and environmental impacts alongside financial returns
Utilizes evidence and impact data in design of investment

Number of social impact

strategyRiskbonds launched globally

Manages investments through an understanding of impact
Source: Prepared from UBS, “Doing well by doing good,” 2016137

performanceContributes to the development of impact investing

Source: Impact Bond Global Database, Social FinanceSource: GSG Japan National Advisory Board’s “Position Paper on Expanding Impact Investing
2019,” based on GIIN website (https://thegiin.org/characteristics) - Japanese translation

General investing

ESG investing(Negative screening)

Financial Only

Impact investing

General donations(Positive screening)

Responsible

Sustainable

Impact Only

ImpactInvestments that could generate competitive financial returns
Investment/provision of funds focused on awareness/mitigation of environmental,
Active investment/provision of funds to environmental,

Investment/provision ofCompetitivesocial and governance risks
social and governance initiatives

funds to initiatives with measurable social impacts for the resolution of social problems
Has financial return

Below-market financial returns
Source: Prepared from G8 Social Impact Investment Task Force, “Allocating for Impact,” 2014

78

Strategic theme ❶History of impact investing

Assets under management[2007-2010]

Global ($502.0 billion)

It is thought that the phrase “impact investing” was first used at a 2007 conference hosted by The

Total impact investing assets under management were reckoned by a 2019 survey to be $239.0 billion(approximately ¥25.8 trillion), but are estimated to have actually reached $502.0 billion (approximately¥54.0 trillion). New impact investments in 2018 alone exceeded 13,000 transactions, for a total of $33.1
billion (approximately ¥3.6 trillion), and particularly since the bankruptcy of Lehman Brothers there has
been a steady flow of new entrants to the market.

Rockefeller Foundation. Since then, investment behavior aimed at resolving social problems has
spread rapidly, primarily in Europe and the United States, and from 2010 onwards it also gained
attention in the context of reassessing financial capitalism based on the lessons of the global financial
crisis.

Source: GIIN: Sizing the Impact Investing Market[2013-2015]
At the 2013 G8 summit at which the United Kingdom held the presidency, it was decided that there
would be a global push for impact investing, and later in the same year the G8 Social Impact
Investment Task Force (now the Global Steering Group for Impact Investment, or GSG) was launchedwith the countries that had attended the summit at its core. The GSG consists of 32 countries, mainly

Japan (¥317.9 billion)
Assets under management for the Japanese impact investing market were confirmed by a 2019 survey
to be ¥317.9 billion. Assets under management grew approximately 9 times from the ¥33.7 billion
confirmed for the initial survey in fiscal 2016.
Source: GSG Japan National Advisory Board, “The Current State of Impact Investing in Japan 2018”from the developed world, and the European Union, and is chaired by the UK’s Sir Ronald Cohen. Its
policies are implemented by the various governments, and have driven the growth of the market.

Global market size

[2018-2019]$502.0 billion

Impact investments are referred to in the 2018 G20 Buenos Aires Summit Leaders’ Declaration, andthe leaders’ speech from the 2019 G20 Osaka Summit mentioned that “other innovative financing
mechanisms, including blended finance, can play an important role in upscaling our collective efforts by(approximately ¥54.0 trillion)

all countries.” These developments have led to the further promotion of impact investing.

U.S. & Canada$291.2 billion(approximately ¥31.4 trillion)

The GSG Japan National Advisory Board is established.

Western, Northern,& Southern Europe$105.42 billion(approximately¥11.4 trillion)*Converted at $1 = ¥108

Eastern Europe, Russia, & Central Asia

$5.02 billion(approximately ¥540.0 billion)
East Asia$10.04 billion

The Government Pension Investment Fund (GPIF) signs the UN Principles
of Responsible Investment.

Domestic(approximately ¥1.1 trillion)

The Social Impact Measurement Initiative(now the Social Impact Management Initiative, or SIMI) is established
Dormant Deposits Utilization Act is enacted
Japan’s first social impact bond is launchedSocial impact bonds are included in the agenda for the PPP
meeting of the Council on Investments for the Future

2007

2009

2010

2012

2013

2014

2015

2016

2017

2018

2019

Southeast Asia

$10.04 billion

IRIS+ toolset to enable investors themselves to measure,manage, and utilize impacts is announced(approximately ¥1.1 trillion)

The importance of impact investing as a means of resolving
problems at the global level is mentioned in the leaders’speech at the G20 Osaka Summit

South Asia

Impact investments are referred to in the G20 Buenos Aires Summit
Leaders’ Declaration

Global$15.06 billion(approximately ¥1.6 trillion)

TPG, a major private equity firm, establishes a ¥200.0 billion impact investment fundG8 Social Impact Investment Task Force (now the Global Steering Group for Impact Investment GSG) is established
United Kingdom: Big Society Capital, an impact investment fund funded by dormant deposits, is established
United Kingdom: the world’s first social impact bondis launched
Global Impact Investing Network (GIIN), a global network of
impact investors, is established
United States: The Rockefeller Foundation uses the term “impact investing” forthe first time and begins to promote impact investing

No Single Headquarter
Location

Middle East & North Africa$5.02 billion$5.02 billion(approximately ¥540 billion)(approximately¥540 billion)

Latin America & Caribbean(including Mexico)

Sub-Saharan Africa(approximately ¥2.2 trillion)(approximately ¥3.3 trillion)$20.1 billion

Oceania$5.02 billion(approximately ¥540 billion)$30.12 billion

Source: GIIN: Sizing the Impact Investing Market

910Strategic theme ❶Strategic theme ❶ [Case studies]

Overview of impact investing activities“HATARAKU Fund”

Based on the Act on Utilization of Funds
Related to Dormant Deposits to Promote
Public Interest Activities by the Private Sector(the “Dormant Deposits Utilization Act”), wewere selected as an Organization Distributing
Funds in fiscal 2019.

Measurement process for this fund
Fund design

Preliminary examination

Examination

Investment decision

Establish a theoryof change for thesocial impacts thefund is aiming tocreateChooseinvestment
targets tocontribute to thefund’s ToC

Establishing ofprovisional logic
models forinvesteecandidates

The investmentcommittee’s
investment
decisions are
made from theperspectives of
economic risks,
returns, andsocial impacts

Verification of
estimated
impacts andnegative risks

Impact Investing
Forum 2019

Forum 2019 held

Single mothersupport project
In our program for supporting single mothers
who start businesses while raising children,
we offer a choice of new work styles that are
not restricted to a certain time or place. Thisis a framework for supporting the acquisitionof the skills and financing required to start abusiness.

11

Investment recovery
Search for buyersof shares who
have a highaffinity for impact
IPO andinvestees

Finalization of
investees’ logic
modelsEstablishing ofsocial impact
measurement
indicators andmeasurement
methods

Preparation andpublishing of
impact reports
Use ofmeasurement
results ininvestee decision
makingComparison ofsocial impacts
before and afterinvestment, etc.

Comments from those involved- Post-G20: the potential of innovative finance in achieving SDGs -GSG Impact Investing

During the investment period
Data collection and analysis

With a focus on pressing social problems
such as the declining birthrate and the aging
population, this is a fund that aims to create
the human resources and environment
required to enable people to continue to workthrough a variety of life events.

Individuals

Fiscal 2019 highlights

Theory of Change (ToC) for this fundThe “HATARAKU Fund” was established in a joint
effort between Japanese banking groups and SIIF,
Care(Child raising, nursing)as one of the few examples in Japan of an impact
investing fund that is open to external investors.
With a focus on pressing social problems such as
Reduction of the
Improved accessindividual burden to high-quality
the declining birthrate and the aging population,of child care andservices
nursing care
Improved
this is a fund to invest in companies that create theRealization ofcooperation foraccommodative
child care andenvironment required to enable working people tochild care andnursing care innursing care
Creation ofsocietycontinue to work through a variety of life events.
diverse ways ofworking andHaving designated the creation of diverse ways oflivingFostering aculture thatworking and living as targeted long-term social
enables diverse
Reduction ofwork styles andchanges (impacts), the fund invests in the work
workloads
expandingrelevant
Accommodative
domain in areas such as care, including childmechanisms
ways of working
raising and nursing, and in the nurturing of
next-generation human resources, in order to build
Work
more substantial mechanisms for supporting(Work/self-investment)
working people in society.

Society

Acting from the standpoint of an organization that has played a central role from the dawning of the ageof impact investing in Japan to the building of the ecosystem, SIIF creates successful examples ofimpact investing in partnership with important stakeholders. We are nurturing human resources andorganizations involved in impact investing, and using research and policy proposals to put in place therequired environment for the promotion of impact investing. We are also actively participating indevelopment processes for shared rules and methodologies related to impact investing that are moving
forward globally.

For creating the human resources and environment
required to enable people to continue to work

Continued to support Plus Social Investment,
which acts as an intermediary support
organization for building impact investingmechanisms in the community

Conducted Japan’s
first survey into consumerawareness of impact investing

We wanted to create a full-fledged impact investing fund still unusual in Japan thatcombined both financial returns and social returns and in which institutional
investors could also participate. Our plans were brought to fruition with thecooperation of the Shinsei Bank Group and Mizuho Bank, two leading Japanesefinancial institutions. Furthermore, we also received participation from financial
institutions who have made social impact and SDGs a priority, as well as receiving
many inquiries from startups who wished to maintain and expand the social valueof the project, all of which has given us a real sense that interest in impact
investing is rising day by day. The key of impact investing is measuring andmanaging social impacts. By practicing the measurement of social impacts forinvestee projects and the creation of impact reports for investors in fiscal 2019, wewere able to put in place the foundations of a social impact measurement andmanagement model. Going forward we intend to continue to work diligently tocontribute to the building of full-fledged models for impact investing funds.

General Manager, Projects
Fumi Sugeno

Introduction to investees

Life is Tech, Inc.

UniFa Inc.

Our mission is to stretch the possibilities for each and every
junior and senior high school student to the maximum
extent possible. Rather than simply enabling such students
to acquire programming knowledge and skills, we provide
an IT programming education that emphasizes creation of
the abilities that will be needed by the people who will leadthe process of resolving social problems.

Our organizational purpose is to create new social
infrastructure around the world that realizes the dreams offamilies, and we use cutting-edge technologies such as AI
and IoT to improve the working environment in childcare
facilities and to raise the quality of childcare itself. We aim
to achieve a more prosperous society and to contribute to
the SDGs.

12

Strategic theme ❶ [Case studies]

Dormant deposit accounts utilization project“Project to support growth of social businesses for revitalizing regions”
In accordance with the Dormant Deposits Utilization Act, a system whereby deposits, etc. for which
there had been no transactions over the 10-year period beginning January 1, 2009 (dormant deposit
accounts, etc.), are used for the resolution of social problems and for the promotion of public interest
activities began operation in fiscal 2019. SIIF was selected as an organization distributing funds, andhas been implementing a project to support growth of social businesses for revitalizing regions, and theformation of an ecosystem that allows sustainable generation of impacts. In order to solve the problem
of diminishing vitality in regional society, caused by the progressive decline in birth rates and the aging
population, we support the social businesses that form the core of local communities by reinvigoratinga variety of resources not used in the regions.

Project organizational chart
Citizens(Depositors)

Deposits

Financial
institutions

Transfer

Deposit Insurance
Corporation of Japan

Dormant deposits
Payment request
Payment○○ Bank / △△ Shinkin bank(Organization conducting
public interest activities)

As part of its research, SIIF conducted the first ever survey into the level of recognition and interest in
impact investing among general consumers in Japan. The result was an overall level of recognition for
impact investing of 6.8%. We found that individuals with experience in investing had a higher level ofrecognition. In terms of affiliation, millennials in their 20s and 30s had a high level of recognition, in
addition to which the higher the household income, the higher the degree of recognition. Potential
purchasers came to 20.7% of the total. In terms of affiliation, support came from the millennial
generation and from people involved in social contribution activities, such as volunteer work anddonations. Among those likely to purchase, 11.7% responded positively to the statement “If it were tocontribute to resolving social problems, I would buy impact investing products even if the financial
return were somewhat low.” The outcome was that we caught glimpses of intent to participate intransforming society through investment activities. Having digested the results of this survey we findthat levels of awareness are low compared to those of other countries, but that domestic interest inpurchasing is high, which gives us hope for the future.

People who understand thePeople who would like tomeaning of “impact investing”

purchase impact investing products

6.8%

Subsidies

Organization
Distributing Funds

Supervision

Subsidies(Overall level of interest)

Very interested

1.7%

2.8%
Know it a little

Hand
over

Supervision

20.7%(Overall level of awareness)

Know it well

Public interest activities

Executing organization

Results of survey into consumer awareness of
impact investing (level of recognition and interest)

5.1%
Have heard of it,
but do notunderstand it

DesignatedUtilization Organization

Somewhatinterested

Not interested

11.3%

17.9%

29.8%

NeitherHave not heard of it

NPO, etc.
“Executing organization”
means the organizationthat receives subsidies
from an Organization
Distributing Funds sourced
from monies related todormant deposits, etc., andconducts the public
interest activities.

“Organizations Distributing
Funds” means anorganization that
distributes subsidies
sourced from monies
related to dormant
deposits, etc., toexecuting organizations.

Not very interested

81.9%

Project report

Project reportSupervision

Approval of project plan

22.3%

Application for
project plan
Project report

Cabinet OfficeCouncil for Utilizationof Dormant Deposits

Awareness of impact investing by generation *among those with investment experience
Millennial generation to be 20s 11% 13.4%
the driver of future growth
in impact investing

Comments from those involved

In raising a hand to become an Organization Distributing Funds, we had two
objectives. One was that we sympathized with its basic policy of using dormant
deposits in experimental or innovative initiatives, and wanted to run as apacesetter with executing organizations. The other was to see whether we could
not apply an “investment” approach to dormant deposits. In the dormant deposits
project, we are conscious of a chain of mechanisms that consists of making
dormant regional resources visible, measuring the social impact obtained fromutilizing them, and generating sustainable social impacts while obtaining income
from the project. We thought we might be able to generate sustainable social
impacts by nurturing innovative social startups that have their roots in the regions,and to that end we concluded a comprehensive cooperation agreement with the
Shinkin Central Bank. Rather than simply providing grants and leaving it at that,
we aim to use grants as fertilizer to nurture projects, to help them achievesustainable growth, and to cultivate businesses that in the future will no longer rely
on dormant deposits.

27.3%

30s 8.4% 16.8%

40s

9.1%

23.2%

52.4%

24.5%

50.3%

15.9%

73.2%

1.8%

50s

16.4%

77.2%

1.6% 5.2%

60s and above 7.6% 12.9%
Impact Officer
Yuka Ogasawara

79.1%

0.4%

Know it well

Know it a little

Do not understand it

Do not know it<Survey overview> ■ Purpose of survey: To gain an understanding of the level of recognition, understanding and interest in social impact investing in Japan ■ Outsourcing
contractor/methodology: Survey conducted by Macromill, Inc. ■ Target/sample size: 2,071 general consumers nationwide (number of respondents) ■ Sampling method: Stratified
two-stage random sampling from Macromill’s registered population, so as to resemble the national population by sex and by age bracket ■ Survey period: August 19, 2019 (Mon) - August21, 2019 (Wed)
Source: “Survey into general consumer awareness in relation to social impact investing” report, October 4, 201913

14

Strategic theme ❷Strategic theme ❷ [Case studies]

Presenting new benchmarks for measuring value

Social impact measurement/management
What is “Social impact measurement/management”?
With global interest in building sustainable societies rising steadily, we have arrived at an era in whicheven companies are being measured not only by economic activity such as profitability, but by the
degree of their contribution to society. In addition, there is also a movement among not-for-profit
organizations such as NPOs to clarify the degree of their contribution to resolving social problems. The
process of making visible the results and changes in society and the environment caused by theactivities and services provided by companies and not-for-profit organizations is referred to as “social
impact measurement.” The process of using information related to social results to improve businesses
and to make decisions with the intent of enhancing social impacts is referred to as “social impact
management.”

Overview of activities
As an organization whose goal is to popularize impact investing and impact-oriented philanthropy inJapan, SIIF is engaged in the practice of, and development of knowledge and nurturing of practitioners
for, the social impact measurement and management initiatives that constitute the preconditions forsuch activities.

Strategic theme ❷ [Case studies]

new fields (sports, healthcare, social
capital, support for the homeless).
(2) Held events, delivered support.
● Held “Social Impact Day 2019”

Constituent elements of logic model following
the flow of the project(example of project to support finding work)
Project flow

Example of project to support
finding work

Four elements of
the logic model

People, objects,
and money• Instructors, research materials, andtraining locations, etc. required forprogram to support finding work

InputsMore than 200 people fromprivate-sector companies, NPOs,
providers of funds, and measurement
specialists, etc. participated, sharing
information and opinions on the latest
trends in social impact management.
● Implemented “impact management
seminar”
Introduced case studies of social impact
management, aimed at NPOs andproviders of funds.

15

Comments from those involved

2019 represented the second year of our unprecedented attempt to tackle thechallenge of conducting social impact measurements for venture capital fundinvestees and to summarize them in the form of impact reports. In addition to theexisting eight investee companies, we created logic models for six newcompanies, and conducted numerous discussions regarding which social KPIs
should be used as targets. What is most pleasing is that we have seen a deeper
understanding of the significance of social impact measurement and wider usageof such measurements, not only on the part of the staff of the investee but also
among venture capitalists. We will continue to practice this approach so that weare able to provide new benchmarks that measure social value in addition tofinancial returns.

• Business improvements
rooted in analysis• Reports to stakeholders

In Japan, the Social Impact Measurement Initiative (now the Social Impact Management Initiative, or
SIMI) was established in 2016 as a platform to promote social impact measurement and management,
and the operations of this organization, and the roadmaps and action plans it has created, form thebasis for implementation.

(1) Published measurement toolset for four

The Healthcare New Frontier Fund is a venture capital fund that was established with the aim ofextending healthy lives (an initiative being promoted by Kanagawa Prefecture) and resolving social
problems by creating new industries in the fields of preventative measures to be taken before people
actually become ill, and of cutting-edge medical treatment. SIIF has not only invested in this fund, but it
also implements social impact measurements for every venture capital firm investee to support thegrowth of the investee’s business as well as increases in its corporate value in both social andeconomic terms. In 2019 we implemented social impact measurements for six new investee
companies, and eight existing investee companies, for a total of 14 firms.

Impact Officer
Yuka Ogasawara

Measurement process for this fundUtilizing social impact measurement for management“”

Actual example“Healthcare New Frontier Fund Impact
Report 2018” published

Activities• Development of programs to
support finding work
• Recruitment, etc. of people toparticipate in programs

Activities

Objectsand services• Provision of programs to support
finding work

OutputChangesand results• Acquisition of skills necessary forfinding work
• Enhancing motivation to find work
• Achieving continuous employment

Outcomes
Source: SIMI

• Realization of outcomes• Factor analysis ofrealization of outcomes

ActionPlan

Utilization indecision-making,reporting

Creation of logic models
Setting KPIs

Check

Do

Analysis

Project implementationand data collection• Pre-verification of logic
models• Determining outcomes tobe measured• Determining metrics,
measurement methods,
measurement design• Monitoring of metrics

Investee voices

Emimen Co., Ltd.

In the retirement home industry, which is the area of ourcompany’s operations, we frequently see tragic social
problems that arise from a variety of misconceptions. We
have developed the business precisely to contribute to
the resolution of such problems, but until now we had not
applied quantitative metrics to the social value generated
by the company. As a result of this process ofmeasurement, I hope that our employees will be able totake even more pride in the business. In addition, by
sharing this metric with others outside the company I
expect an increase in the number of people who takenote of the value provided by our product, and support
us, and I also expect it to show which metrics should be
used by the industry, and for it to open the way tohealthy development.

Rehab for JAPAN Co., Ltd.

Social impact measurement is one of the items on thescorecard we use to execute the business. That is
because our mission is “Delivering dreams andinspiration to everybody involved in nursing care,” andbecause we aim to simultaneously realize both capitalvalue and social value. The former can be measured
through accounts such as the income statement andbalance sheet, but with regard to the latter we had
difficulties with procedures and techniques for measuringsocial changes and outcomes. The initiatives in question
have enabled logical explanations based on the creationof logic models and statistical measurement processes,
and I really feel an evolution in the content of theactivities themselves. In future, in order to achieve
meaningful outcomes on an ongoing basis we will
actively engage in external public relations.

16

Strategic theme ❸Domestic trends

Paradigm shift in the public sector

The first full-fledged projects were those created by the cities of Kobe and Hachioji in 2017. By 2019around 20 PFS/SIB projects had been created, primarily by local government bodies nationwide,
representing a total investment of approximately ¥900 million. SIIF was involved in the creation of threeof these 20 projects, and in the provision of funds for eight.

PFS (Pay-for-success) / SIB (Social impact bonds)★ SIIF acted as intermediary/provided funds● SIIF provided funds

What are PFS and SIB?
Pay-for-success contracts are agreements for outsourcing administrative services to the private sector
under which the final payment of commission is linked to the success of the project. SIB is anabbreviation of Social Impact Bond, and refers to external provision of funds from the private sector
accompanied by pay-for-success contracts with the private sector. As of 2019, 137 such SIBs had been
established, primarily in the United Kingdom and the United States, representing a total investment ofapproximately ¥40.8 billion. A wide range of fields has been targeted, centered on areas where social
problems need to be resolved, such as support for finding work, support for the destitute, andhealthcare.

Hokkaido
Sapporo City, Hokkaido
Investigation into SIB creation★ Okayama City, Okayama
Prefecture (Cabinet Office)Health points

Kyushu region

Sakura City, Chiba Prefecture(Ministry of Health, Labour andWelfare)Support for finding work for thedestitute
Ina City, Nagano Prefecture
Prevention of lifestyle diseases

Omuta City, Fukuoka Prefecture(Ministry of Economy, Trade andIndustry)
Controlling rise in nursing careneeds(5) Payment of commission in accordance with outcomes

Koshi City, Kumamoto
Prefecture (Ministry of Health,Labour and Welfare)
Preventing need for nursing care

PFS(1) Pay-for-successoutsourcing agreement

Business operator(NPO, private-sector
company, etc.)(2) Prior provisionof funds to business

Kinki region★ Kobe City, Hyogo Prefecture(Ministry of Economy, Trade andIndustry)
Prevent progression of severe
diabetic nephropathy

Private funds
providerShikoku region(4) Measurement and reportingof service outcomes

Third-party
evaluators

Saijo City, Ehime Prefecture
Support for starting community
businesses(3) Provision of services

Mima City, Tokushima
Prefecture (Ministry of Economy,
Trade and Industry)
Improvement of motor functions

Beneficiary(4) Measurement andreporting of service
outcomes

Overview of activities

Fiscal 2019 highlights

PFS/SIB are new mechanisms that seek to transform public services to a more outcome-oriented
approach. From the standpoint of an organization that has led the way in the adoption of PFS/SIB in
Japan, SIIF is not only involved in creating model projects but also aims to achieve a paradigm shift in
the delivery of public help by sharing knowledge and submitting policy proposals.

2019

Report creation for SIBs

In cooperation with Mitsubishi UFJ
Research and Consulting, SIIF has madetwo reports on SIBs available on theInternet. Those who wish to know more
about SIBs should refer to the reports
shown on the right.

17

Implementing outcome-oriented public services- A look back at the - introduction of pay-for-success contracts(PFS/SIB) in Japan Research into the state of pay-for-success contracts in Japan- A retrospective view on case studies in Japan -2020● Hachioji City, Tokyo (Ministry of
Economy, Trade and Industry)
Improved rates for bowel cancer
screening● Tama City, Tokyo (Ministry of
Health, Labour and Welfare)Partnership with drugstores toprevent progression of severe
diabetic nephropathy● Oita Prefecture (Ministry of
Health, Labour and Welfare)
Normalization of prescriptions

SIB

Kanto/Koshinetsu
regions

Yokohama City, Kanagawa
Prefecture
Investigation into SIB creation

Fukuoka City, Fukuoka
Prefecture (Ministry of Economy,
Trade and Industry)Normalization of prescriptions

PFS/SIB mechanisms

Government

Chugoku region● Hiroshima Prefecture/Six
prefectural cities (Ministry of
Economy, Trade and Industry)
Improved rates for bowel cancer
screening*Source of contribution noted in parentheses

Higashiomi City, Shiga Prefecture(Ministry of Health, Labour andWelfare)Support for starting community
businesses● Osaka Prefecture (Ministry of
Health, Labour and Welfare)Promotion of foster parent
registrations, free schools
Tenri City, Nara Prefecture (Ministryof Health, Labour and Welfare)
Prevent progression of severe
dementia★ Toyonaka City, Osaka Prefecture
Support for giving up smoking
Ikeda City, Osaka Prefecture(Ministry of Health, Labour andWelfare)Management of free schools
Sakai City, Osaka Prefecture(Ministry of Economy, Trade andIndustry)
Preventing need for nursing care
Kawanishi City, Hyogo
Prefecture (Two local
government bodies, Cabinet
Office)Health promotion program

May

Invested in health promotion SIB using Health Points,
Okayama City, Okayama Prefecture

July

Invested in SIB project for support of giving up smoking,Toyonaka City, Osaka Prefecture

AugustHeld SIB stakeholder workshop

NovemberParticipated in the Council for Promotion of Regulatory Reform,
Council on Investments for the Future

February

Presented a paper at the Cabinet Office PFS seminar

18

Strategic theme ❸ [Case studies]

Initiated world-leading SIB project for support ofgiving up smoking

Toyonaka City, Osaka Prefecture“Social Impact Bond for Support of Giving up Smoking”
Began “Toyonaka Giving Up Smoking Project,” the world’s first
SIB to support people trying to stop smoking.
We discussed the thoughts behind the structuring of this SIB
with members of the team involved in its creation, and also
asked them where they had struggled.

What is the significance of startingan SIB for this project to support
giving up smoking, what are yourthoughts on creating the project,and did you encounter any
difficulties?
Toda: SIIF acted as an intermediary support
organization and as a provider of funds. As anintermediary support organization, at thestructuring stage we undertook the design ofthe measurement and the payment conditions,which are the key to SIB projects, and also
provided overall coordination. Since the launchof the project, we have been monitoring its
status through participation in progressmeetings. As a provider of funds, we also
invested in the project itself.
Previously, administrative support for people
giving up smoking was generally restricted tohaving the city office give people the contact
details of medical institutions with an
outpatients department for stopping smoking.
In the case of outpatient departments for
stopping smoking, the requirement for theindividual to travel to the medical institution
seems to constitute a high hurdle for busy
people. The services provided by this Toyonaka
City SIB project for support of giving up
smoking are all delivered online, allowing
individuals to work on stopping smoking in a
way that matches the rhythm of their own
lifestyle. I think one of the significant
characteristics of the introduction of SIBs is thatthey enable citizens to use outsourced
administrative services that are packed with theoriginality and ingenuity of private-sector
companies.
Nakamura: During the 10-year period from2009 to 2019, the price of a packet ofcigarettes rose 1.5 times, while the number ofplaces where it is acceptable to smoke
decreased rapidly, and smokers began to feelincreasingly unwelcome. This SIB is aimed atpeople who have been unable to stop smoking
whatever they do, and provides more active

Q1

19

intervention and effective support for giving up.
We feel that participation in this project isworthwhile because it helps large numbers ofpeople maintain their health.
Yamamoto: In the “Action Plan for the
Promotion of Pay-for-Success Contracts with
Private Service Providers,” the Cabinet Officerefers to the creation of guidelines, between
fiscal 2020 and fiscal 2022, in relation to suchmatters as measurement and payment
conditions. However, I feel that currently thecreation of SIBs incorporates a substantial
order-made element. We have benefited fromconsiderable cooperation from the employeesof the ordering entity, which is Toyonaka City,
and also from the employees of CureApp Inc.,
which received the order. Our frame of mind as
we created the structure was that we did notwant to waste this cooperation, and we werekeen to make the best project we could.
The program began in July 2019.

progress has there been up to
Q2 Whatthe end of March 2020?

Nakamura: CureApp, Inc., which operates thebusiness, has implemented a variety ofmeasures in partnership with Toyonaka City,
such as social media advertisements,
door-to-door distribution of leaflets andinsertion of leaflets into shopping bags,

placement of advertisements withintransportation facilities, and approaches tolocal businesses. The number of newparticipants is increasing. Even as we speak,
our partners are working with great enthusiasm
to further increase the number of participants,
analyzing and continuing to use methods thathave produced results, and engaging with new
approaches. City residents made positive
comments to the effect that while traveling to
the hospital for the outpatient department forgiving up smoking seems too difficult, oursystem is convenient and they think they will beable to continue with it, that the advisers arevery helpful and reassuring and have motivatedthem to keep going, and that the project has
led them to reassess their own health.
What are your expectations for SIB
going forward, and what are theissues? Also, in what areas do you
see the introduction of SIBs
increasing?
Toda: The first SIB in Japan was launched in2017, so it is still very much undeveloped as ascheme. In the United Kingdom, which was thebirthplace of this instrument, the first scheme
was only launched in 2010, so even on a global
basis it is still a new initiative. Globally, there

Q3

Overview of this project’s support for stopping smoking
Physically andpsychologicallyeasy to start

Full-featured,“tripartite” support

Support given
remotely/online rather
than traveling to hospitalor undergoing medical
examinations

Three elements toeffectively support giving
up smoking

Dedicated app for giving up
smoking can be used
wherever you are

Specialist provides video
guidance to 8 PM on
weekdays and Saturdays(and also Sunday within six
months)Because there is no travel tohospital or medical
examination, psychologicalhurdle is low

Daily follow-ups
over an extended
period (six months)
Daily support structure
plays a role inovercoming psychologicaldependence

App andcontent
Receive support
anywhere on
smartphone

Guidance is also given via
video call, so the effort oftraveling to a hospital isavoided (from the first timeright to the end)

(Left) Impact Officer Michiru Toda
(Center) Impact Officer Yuko Nakamura(Right) Impact Officer Taiki Yamamoto

are many cases of SIBs being used to help
people find work, or to support the destitute, so
in Japan also we expect more projects to becreated in those areas.
Nakamura: With regard to the “frailty
countermeasures” that require local
governments to come up with uniquely effective
initiatives, we feel that SIBs that are able toutilize the proprietary know-how of business
operators, and that have the effect of
encouraging more active programs, areparticularly promising. By asking investors tocommit funds in advance to share the risk, we
facilitate a bolder approach to initiatives bybusiness operators.
Yamamoto: In Japan, until recently many
projects emphasized reductions in
administrative expenditures (downside), with afocus on cutting medical costs. Conversely,
SIIF is aiming at the implementation in societyof upside SIBs with a focus on increasing tax
revenues, and was involved in the program forsupporting single mothers starting businesses
as a model project. Depending on the nature of
the social problem or project in question, we
feel that designs such as this that focus on theupside may be appropriate, and we expect
such projects to be created going forward.

6 months

Overcome psychologicaldependence through along-term program extending
over six months

Medicine
Sold online anddelivered to thehomeDedicatedadvisors

Public health nurses
and pharmacists, etc.
with guidance
qualifications
accredited by
JSTC/JASCS

Care also provided aroundthe 4 to 6-month mark, where
there are many
discontinuations anddropouts

Time spent giving guidance is a substantial
30-45 minutes per session

We check progress made in helping others give up smoking one year after the program is initiated, as a rule

20

Strategic theme ❹A new economy that supports the exchange of value other than money

Alternatives

Strategic theme ❹ [Case studies]

Research and development of new mechanisms
for resource circulation“Hallucigenia Lab”

Overview of activities
Going forward, we believe that impact investing will need the construction of a new economy (animpact economy) to support sustainable solutions to social problems and create new value, such as bytransforming existing financial systems, rebuilding flows of money in order to redefine self-help, public
help, and mutual help, and creating new mechanisms for exchanging value. To achieve this, SIIF
intends to build a new ecosystem for the circulation of resources, to which end it is creating models andnurturing players.

We have begun the “Hallucigenia Lab” accelerator program for research and development of new mechanisms forthe circulation for resources such as people, objects and money. In addition, the four organizations participating inthis program have been selected. This program is open to organizations that have ideas for businesses that could infuture become ecosystems with a role in the circulation of resources. These organizations are provided with funding
and six months of business support. Each of the recipients of this support work on the development of new
businesses involved in the building of new resource circulation mechanisms. In addition to providing backing toeach organization for the development of new business prototypes, SIIF identifies the success factors within thatprocess, records explicit knowledge related to the business growth process, and provides know-how to the business
operators, with the aim of inducing them to build new mechanisms for resource circulation.

Program details

Comments from those involved
Today, with the limitations of the existing capitalist economy that assumes growth as a precondition
becoming apparent, we must change the structure of society and the economy. We invested in ADDressCo., Ltd. not simply as a means of revitalizing regional economies, but because we expect it to play a role
as a new community hub that allows required resources, such as “people” and“objects,” to flow to the regions and be conserved there. We are currently working
with others to make the social impact of the “related population” visible, andattempting to clarify the positive impact on local communities of connections
between individuals. At Hallucigenia Lab, we are taking up the challenge ofthinking about and generating new mechanisms for society and the economy.
Specifically, while providing support and cooperation for ecosystem players in
multiple regions, we are working to develop new projects that will generate a newcirculation of resources such as people, objects and money. While boldly
introducing advanced concepts such as gift economy theory, community marketingand speculative design, we aim to develop a new methodology for creating
Impact Officer
regional ecosystems.
Yasufumi Furuichi●Provides uniquely developed and designed 6-month training program●Supports business development by assigning a dedicated supervisor for each company

Provision of funds
Hallucigenia Lab

Organizations that have ideas forbusinesses that could in future build an
ecosystems

Business support(6 months)

Identification of success factors/recording of explicit
knowledge related to business growth process

Development of new businesses
involved in the building of new
resource circulation mechanisms

Strategic theme ❹ [Case studies]

Recipient of subsidy

Practicing population sharing between cities and regions“ADDress”

In preparation for the creation of the impact
economy, venture capital company ADDress Co.,
Ltd., which SIIF supports and in which SIIF has
invested, provides a co-living service (“ADDress”)
that utilizes unoccupied housing to allow members
to enjoy residency across multiple locations. By
collaborating with people around the country who
are active in areas such as starting businesses andurban planning, we aim to create related
populations in each region that are involved in
multiple businesses, education, culture, medical
activities and so on. Since the service began
operation last year, it has developed 30 locations
nationwide. Recently, this has produced examplesof new lifestyles that transcend the provision of
housing, such as families who practicedual-schooling (a setup whereby students canattend to schools in cities and in the regions) whilestaying at an ADDress location. Going forward, thefocus will also move to revitalization of the regions
by encouraging the transfer of populations from
cities to regions, and by promoting the creation anduse of idle assets through renovation.

21

K.K. Next Commons Lab(Tono City, Iwate Prefecture)

Project organizational chart

Unnan Community High School Consortium

Owner(Unnan City, Shimane Prefecture)
Provision ofunoccupied
housing

Rent

Makigumi LLC(Ishinomaki City, Miyagi Prefecture)

Investment
Multiple-location
residency

ADDress
ADDress subleases unoccupied
housing and second homes fromtheir owners, raises their value
by committing the initial capital
investment and by managing andoperating the properties, andprovides a stable rental income
for their owners.

Kokohore Japan KK(Okayama City, Okayama Prefecture)

Creation of new community economic zones
by developing union organizations throughthe utilization of cryptoassets
Building relationships that transcend
generations between local junior and seniorhigh school students and adults, by meansof a helper app.
Collects donations for housing materials
aimed at those who have difficulty insecuring a place to live, forming of a gift
economy platform to support independence
Developing media platform to ensure thecontinuation of regional businesses.
Operates “keigyo.jp” for regional businesses
that need assistance to survive

Renovation

Origin of the name “Hallucigenia Lab”
The mysterious “Hallucigenia,” which is thought to have been endowed with a highly unusual structure, has become arepresentative of the Cambrian period that saw an explosion in diversity of new lifeforms, and which included creatures that

Monthlymembershipfeedeviated from the logic of the ecosystem. Our goal is to produce as many entities like the Hallucigenia as possible, in theMember
Provideshousingsense that although they may look distorted or unnatural today, they symbolize an attempt to resolve social problems thatwill in future become recognized as necessary throughout the world.

22

Strategic theme ❺Intentional funding drives innovation

Global partnerships

Progressive philanthropy
Overview of activities“Progressive philanthropy” goes beyond traditional philanthropic approaches (activities to improvesociety) in which the emphasis is on donations and subsidies, and seeks to resolve social problems byadopting techniques from impact investing, such as diverse approaches to providing funds, including
investments, and making results visible. By committing funds to support the building of prototypes forbusinesses that have no precedent, we aim to have a substantial impact on society.

SIIF cooperates with organizations that are involved in the
global promotion of impact investing and social impact
measurement/management, and in addition tocommunicating the latest trends in Japan, it works todisseminate leading cases and knowledge from overseas
within Japan.

What is progressive philanthropy?
Catalytic• Provides risk capital• Performs pump-priming role for otherproviders of funds• Provides flexible funding ranging fromdonations to investments, as required

Impact-oriented• Plans and executes strategic philanthropy• Holistic awareness of social systems rather
than individual issues• Aims to make recipients of support
sustainable

Fiscal 2019 highlights
Conducted overseas surveys, wrote survey reports and planned study meetings in preparation
for realizing ecosystems that enable progressive philanthropy• Finding from on-the-spot survey in the United States• We confirmed the existence of a wide range of philanthropy advisory organizations and impact
investment advisory organizations, which vary according to the nature of the customer, andunderstood that they each have their strengths and special characteristics.
• We found that interest in impact investment among family foundations is rising, and that the majorphilanthropy advisory organizations are setting up impact investment promotion teams.
• We discovered multiple communities for peer study, which spark inquiry-based learning amongst
philanthropists• Began writing survey report on formation of new philanthropy ecosystem• Planned study meetings for people with an interest in participating in progressive
philanthropy activities

GSG

GIIN

IMP

AVPN

The Global Steering Group for
Impact Investment

The Global Impact Investing
Network

Impact Management
Project

Asian Venture Philanthropy
Network

An internationalorganization established
for the purpose ofpromoting impact
investment globally inresponse to an appeal inJune 2013 by Prime
Minister David Cameronof the United Kingdom,which held the presidencyof the G8 at the time.

A networking organization
for investors that wasestablished in 2009 by agroup of investors centeredon The Rockefeller
Foundation for the purposeof popularizing impact
investing. Conducts
research and advocacy
related to impact investing
and contributes to theformation of the impact
investing community.

An international initiative
established in 2018 topromote social impact
management for businessand investment. Supports
the practice of social
impact management andthe development ofrelated know-how.

An international
not-for-profit organization
established in Singapore
in 2012, with amembership consisting ofover 600 organizations
and companies
associated with impact
investing and strategic
philanthropy, drawn from34 countries around theworld.

Sir Ronald Cohen’s message“Japan’s GSG National Advisory Board for Impact
Investment, supported by SIIF, has been successful
in leading the Impact Investment sector in Japan
since its inception in 2016. This includes many
initiatives underway, including building Japan’s
impact ecosystem, the utilization of dormant
accounts for social purposes and the design of new23

Comments from those involved

impact investment business models. Together weJapan is sometimes called an asset superpower, but the level of donations andimpact investing is lower than in other major countries. There are limits to thestate’s ability to resolve problems, so we believe it is necessary for each individual
to act with the intent to build society. Progressive philanthropy refers to theintentional pursuit of capital (knowledge, passion, or money committed to projects
with measurable social impact) by each individual, and also to the ecosystem that
supports the investment and business activities that arise as a result of thispursuit. We believe it is necessary to consider and practice ways of using
individual capital to initiate social and economic resource circulation in a way thattranscends the framework of self-help, public services and mutual help, by raisingawareness among impact-oriented asset owners, and seeking the evolution of aself-generating ecosystem of philanthropy.

continue to drive the flow of private sector investment
to bring social innovation to improve lives in Japanand the planet.” – Sir Ronald Cohen, Chair, GSG

Sir Ronald Cohen, Chairman, GSG
Impact Officer
Yuko Koshiba24Organization Summary

Organization name Japan Social Innovation and Investment Foundation (SIIF)
Address

6F M-City Akasaka 1-chome Building, 1-11-28 Akasaka, Minato-ku Tokyo 107-0052, Japan

Date established

September 2018

2015
2016
2017

2018
2019

Net Assets Variation Statement

Balance sheet

I Change in general net assets

I Assets

1. Change in ordinary revenue/expenses

1. Current assets(1) Ordinary revenue

The Nippon Foundation started to engage in research to promote social impact investment in Japan
A social investing promotion office was set up within The Nippon Foundation, and The Nippon Foundation and its partners
represented Japan on the G8 Social Impact Investment Taskforce (GSG; now the Global Steering Group for Impact Investment)
The Nippon Foundation hosted a secretariat managing the strategic and day-to-day activities of the GSG Japan National
Advisory Board
Start of SIB pilot projects in Yokosuka, Amagasaki, and Fukuoka Cities
Founding of the Social Impact Measurement Initiative (SIMI; now the Social Impact Management Initiative)
In order to further accelerate the social impact investment market building initiatives, founded Japan Social Impact
Investment Foundation (SIIF)
Start of first, full-scale Japanese SIB projects in Kobe and Hachioji
Participated in the Healthcare New Frontier Fund initiated by Kanagawa Prefecture
Set up and managed jointly with Shinsei Corporate Investment and Mizuho Bank the social impact investment fund
Merged with the Institute for the Advancement of Social Innovation and renamed ourselves as the Social Innovation and
Investment Foundation

334,426,334

Total ordinary revenue

AuditorYumiko IGARASHI [Attorney at Law, Igarashi Law Office][Representative Director, Marunouchi Business Consulting Ltd., Certified Public Accountant]Akemi SUNAGA
Councilors[Senior Professor, National Graduate Institute for Policy Studies; Vice Chairman, the Japan Productivity Center]
Hiroko OTA[President, The Nippon Foundation]
Takeju OGATA[Professor, Waseda University Graduate School of Business and Finance]
Yuko KAWA
Masayasu KITAGAWA [Professor Emeritus, Waseda University; Advisor, Waseda University Research Institute of Manifesto]
Hiroyuki SHIBATA [President & CEO, Shinkin Central Bank][Advisor, Japan Center for Economic Research; former Chairman, Nikkei Inc.]
Ryoki SUGITA
Tsuyoshi TAKAGI [Adviser, Japanese Trade Union Confederation (Rengo)]
Yoko TAKAHASHI [President, Japan Philanthropic Association][President, National Graduate Institute for Policy Studies]
Akihiko TANAKA
Hironori TARUMI [Professor, Faculty of Law, Hokkai-Gakuen University]
Yasutake TANGO [Chairman of the Board, Japan Tobacco Inc.; former Vice Minister, the Ministry of Finance][Actress, writer]
Yuri NAKAE
Masahiro FUTAHASHI [Chairman, Japan Center for Local Autonomy; former Deputy Chief Cabinet Secretary]
Tsutomu HORIUCHI [Professor, Center for Social Investment of Tama University; former CFO, Mori Building Co., Ltd.]
Yoshinori ISOZAKI

Organizational summary and officers, etc. valid as of March 31, 2020.

2. Non-current assets(1) Endowments

10,000,000

Operating expenses

233,013,993

Total endowments

Total administrative expenses

93,618,451(2) Designated assets

326,632,444

Prepayments

1,400,000

Total ordinary expenses
Current change in ordinary revenue/expenses
before adjustment by appraisal gain or loss

7,793,890

Business management equalization fund30,000,762

Current change in ordinary revenue

7,793,890

Basic surplus

332,216,892

Social transformation project assets

149,950,184

Dormant deposit project assets

153,505,800

Marketable securities

247,638,202

Fixtures and fittings

2,591,370

Equipment attached to buildings

11,126,078△ 1,410,947

Rental deposit

27,156,480

6,382,943

Total designated assets

955,585,768

Total fixed assets

965,585,768

Total assets

989,247,790

2. Change in extraordinary revenue/expenses(1) Extraordinary revenue

0

Total extraordinary revenue(2) Extraordinary expenses

1,410,947

Total extraordinary expenses

Chair of Executive Committee[Chancellor of Showa Women’s University]
Mariko BANDO
Vice-chair of Executive Committee
Mitsuaki AOYAGIMember of Executive Committee
Nanako KUDO
Yoshinobu TAKAISHI
Director
Takuya OKAMOTO [President & CEO, Chitose Kensetsu, Inc.]
Osamu KANEDA [Founder & CEO, Yo-ren Limited]
Shunichi NAGATA [Director, Trust Museum, Mitsubishi UFJ Trust and Banking Corporation; former Chairman, Deposit Insurance Corporation of Japan]

23,662,022

Total current assets(2) Ordinary expenses

History
2013
2014

Financial status

Change in current extraordinary revenue

Current change in general net assets before taxes

105,000

Income taxes
Current change in general net assets

6,277,943

Opening balance of general net assets

0

Closing balance of general net assets

6,277,943

II Change in designated net assets
Dormant deposits and other subsidies

103,505,800

Private subsidies received (amount transferred
via merger)

710,554,202
814,060,002

Total subsidies, etc., received
Donations received (amount transferred via merger)

3,218,500

Appraisal gain or loss on designated assets△ 920,828

II Liabilities
17,384,079

Total current liabilities

0

Total non-current liabilities

17,384,079

Total liabilities

III Net assets
1. Designated net assets
Dormant deposits and other subsidies

103,505,800△ 317,312,135

Private grants

856,782,296

Current change in designated net assets

499,045,539

Contributions

6,218,500

Opening balance of designated net assets

466,540,229

Appraisal gain or loss on marketable securities△ 920,828

Closing balance of designated net assets

965,585,768

Transfer to general net assets
Transfer to general net assets

Total designated net assets

6,277,943

2. General net assets

III Closing balance of net assets

965,585,768

Total net assets

971,863,711

Total liabilities and net assets

989,247,790

971,863,711

April 1, 2019 to March 31, 2020 (Units: yen)

As of March 31, 2020 (Units: yen)

The operations of the Foundation are implemented with the assistance of subsidies from the Nippon Foundation.

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