European Venture Philanthropy Conference

Last week our Responsible Business Club attended the 3rd Annual European Venture Philanthropy Conference. It was the first time in the Club's history that participants were sent to the event. In addition to helping with the logistics of the conference there were many networking opportunities.

What is Venture Philanthropy?

According to the EVPA website it is as follows:

Venture philanthropy is a field of philanthropic activity where private equity / venture capital models are applied in the non-profit and charitable sectors. There are many different forms of venture philanthropy but the EVPA believes it can be characterised as:

• The active partnership, or engagement, of donors, volunteers and/or experts with charities to achieve agreed outcomes such as organisational effectiveness, capacity building or other important change;
• The use of a variety of financing techniques in addition to grants, such as multi-year financing, loans or other financial instruments most appropriate for a charity's needs;
• The capability to provide skills and/or hands-on resources with the objective of adding value to the development of a charity;
• The desire to enable donors to maximise the social return on their investment whether that be as a financial donor or as a volunteer of time and expertise.

In essence it is a partnership between the charitable organization and the investor that is bound together by one overriding objective; maximize the return on the investment. The only difference is that the definition of return includes social and environmental in addition to financial returns. In my opinion venture philanthropy is no different than any other philanthropy that is done well. All it does is bring to the table business skills and acumen that are potentially lacking in a charitable organization.

To me a more interesting angle to venture philanthropy is when they partner up with a social entrepreneur in order to help the entrepreneur scale his/her business. It is these venture philanthropists that are bridging the gap between traditional philanthropy and traditional investment and are helping social entrepreneurs not only create economically viable and sustainable businesses, but also tackle some of the world's toughest challenges.