Venture Philanthropy, a lift for no more extreme poverty. By 2030

I recently returned from a trip in Singapore where I attended the first general meeting of the Asia Pacific Venture Philanthropy Association, AVPN, a membership based not for profit network that advocates for more effective, high impact forms of philanthropy in the region.

Mainly composed by a mix of foundations, not for profit organizations, social enterprises, private and investment banks and investment funds with also a good number of consultancy firms, AVPN aims to generate knowledge for innovative practices to lift millions of people out of poverty.

Venture philanthropy, with its truly pragmatic approach, can be a transformative platform for creating social and economic development, bringing prosperity to those still lacking it.

Initially, when I first heard about venture philanthropy, I was kind of skeptical of a new “movement’, characterized by strict boundaries mirroring a “silos mindset”, more focused on differentiate itself from others in a bit elitist fashion rather than getting things done in a novel way.

In my mind there was all the fuss about defining and understanding the overinflated concept of social entrepreneurship with unending theoretical discussions that had followed.

Instead I have never been so wrong. The definition of venture philanthropy offered by EVPA, the European Venture Philanthropy Association, sister organization of AVPN, is very clear and straightforward:

Venture philanthropy works to build stronger social organizations by providing them with both financial and non-financial support in order to increase their social impact.

What strikes me is the fact that organizational development, an approach that goes well beyond the narrow capacity building and passive granting, is the foundation of any venture philanthropy effort.

Here we are talking about providing an engaged form of support to actors that have the potential to be real trailblazers in the fight against poverty or any other calamity affecting humanity.

A venture philanthropist is someone who combines technical expertise with “guts” understanding of realities on the ground, someone capable to “feel” that a good idea, with the right support and learning by doing attitude, can be really break ground in solving a particular societal problem.

During the conference in Singapore, I had the opportunity to feel myself the pragmatism and “hands on” character of this approach.

In short venture philanthropy is “smart philanthropy”, no nonsense and possibly no frills (let’s think about the overheads of traditional development!!!!) way of turning things for better: any penny used for a social cause, either expressed through loans, equity or grant, should be a real multiplier for positive change.

AVPN by choosing “Creating Social Impact: Blending Philanthropic and Investment Capital” as title of the conference, could not have made a better job in describing the syncretism embedded in the concept of venture philanthropy.

Stressing effective and enduring impact based on strong measuring, venture philanthropy, while opting for accommodation and flexibility towards “crosspollination” with other forms of social interventions, breaks the walls of standardized approaches of doing development.

It sets a valuable minimum common denominator for the “old school” of charity and the “new frontier” of investment capital, creating new forms of understanding among different platforms.

By brokering new knowledge and bridging gaps, venture philanthropy offers a new and vast platform for promoting smarter way of bringing social change.

Importantly venture philanthropy must be understood for what really is, a sort of farsighted, cross cutting, long term approach well positioned to link up with private sector in general via corporate social responsibility, the cooperative movement, the social business and of course the more traditional aid.

The challenge ahead lies in creating more awareness about this new philosophy of life, not only among those actors trying to do “good” but struggling with doing it well but also among other sectors’ dominant players who might want to protect their “niche” of intervention.

Indeed you can be a budding Bill and Melinda by donating few bucks or you can decide to invest in a promising company with a financial and social return or you can be a company committed to corporate citizenship but the basic rules of the games are the same: spending money to improve people’s lives is a damned complicated job.

You need to get the foundations right, you need to get the “scale” right in order to have a fair good chance of doing something lasting and sustainable.

Either through a donation, a soft loan or an investment in equity, venture philanthropy proves that chances for change are much higher with the right ingredients and a good back up.

Adaptation, adjustment and continuous improvement are the key features for ensuring a collective social impact. Venture Philanthropy offers some new venues for improving the “rules of engagement”, strategically rising the standards in step by step fashion.

The Economist recently said that it is possible to do it by 2030. Maybe venture philanthropy can be one of the lift to achieve that.

More soon