Reposted courtesy Asian Venture Philanthropy Network (AVPN)
Ruth Jones (top left), the CEO of Social Venture Partners International (SVP), a network of Social Venture Partner Organisations in North America and Japan, has years of experience working in the venture philanthropy space. Prior to SVP, she worked with Community Foundations of Canada and Philanthropy Australia, the membership association for Australia’s private, family, corporate and community foundations. SVP has 2300 members in a network spanning 27 cities. Its partners have collectively given US$46 million and thousands of skilled volunteer hours to more than 550 NPOs.
Shaks Ghosh (top right) is the first CEO of the Private Equity Foundation (PEF), which is focused on helping the disadvantaged young to develop as learners, workers and good citizens. Its mission is Full Potential, and it borrows tools and techniques from the business sector and supports community organisations to increase scale and impact. The foundation has raised US$20 million for social causes. Shaks was earlier the chief executive of Crisis, a homelessness charity in the UK, prior to which, she pursued a career in housing and regeneration.
During the course of the next month, Ruth and Shaks will deliver workshops for AVPN on ‘Venture Philanthropy in Practice’, in Hong Kong, Mumbai, Singapore and Tokyo. We spoke to the two practitioners ahead of the road show about their motivations for entering the area of philanthropy, the effectiveness of venture philanthropy vis-à-vis aid, and initiatives their organisations are working on.
Having begun her career as a journalist, Ruth worked in the public, private and the non-profit sectors. About 12 years ago, she was managing a large arts nonprofit and had the chance to learn more about organised philanthropy. It was then she decided to work in this field. "I found the idea of supporting individuals to be thoughtful, effective philanthropists tremendously appealing and a way in which I could make a meaningful contribution to the social issues and causes that mattered to me,” she says.
Shaks says she had become increasingly interested in how business skills might translate into NGOs in her former role at Crisis. "Venture philanthropy was the new buzz word and while NGOs are amazing at the cause and the compassion, it is a fragmented marketplace, with too many sub-scale organisations, struggling for want of back office investment,” she says. About then, the private equity industry was offering an "exceptional opportunity” through its new foundation. The aim was to bring together its business skills and financial donations with Private Equity Foundation staff expertise in not-for-profits and to unlock the potential of the best NGOs, helping them become more effective and to scale up.
AVPN asked both what were some challenges they faced in employing venture philanthropy principles in their respective organisations’ social investing activities. "Venture philanthropy is not for everyone,” says Shaks. Some NGOs prefer to stick with traditional grant funding.
"Some believe that business, with its focus on profit, can never truly understand NGOs which, with their commitment to social change, are driven by much more complex ‘bottom lines’,” she says. However, she adds that experience has shown her how much the two worlds can offer each other. "Both donor and NGO are likely to be motivated by the same social change agenda, even if they have different ideas regarding how best to get there.”
In Ruth’s view, the grant committee’s due diligence process is key: "SVP will be working with a nonprofit for 3-5 years, so it’s important that everyone is on the same page about what is involved in capacity building efforts.” SVP works with nonprofits which are well-suited to partnering with it. This means an organisation that has enough internal capacity to engage with SVP; it is not so large that SVP will "be lost in the shuffle or so small that involvement with SVP will overwhelm it”; it is not a standalone programme; it is stable enough; has solid programmes and mission; and is willing to embrace an SVP partnership.
We live in the age of aid, so what is it about venture philanthropy that makes it more beneficial and appealing? For starters, Ruth says, "well-managed nonprofits with strong internal systems are more likely to achieve greater impact” because they can be financially stable; retain key staff; have strong external leadership of the organisation; adapt to changes in the landscape, funding climate or sector; and be committed to results because they have the evaluation capacity to monitor performance.
It is why SVP focused on capacity building: "the development of core skills, management practices, strategies and systems to enhance an organisation’s effectiveness, sustainability and ability to fulfill its mission.”
Shaks says that "when managed the right way, venture philanthropy has the potential to deliver for both donor and charity and that’s what makes it so powerful.” From a donor’s perspective, giving opportunities need to go with the grain of people’s lives so for those who come from business or professional backgrounds, venture philanthropy strikes a chord. "It taps into their skill set, whether that’s accountancy, law, HR, IT, consultancy, sales or marketing, as well as private equity.” In Shaks’ view, recipient charities typically have fantastic leadership, ambition and the best programmes, but may suffer from under-investment of expertise or money in their infrastructure. "Venture philanthropy can provide the key to help them unlock their potential.”
To date, however, venture philanthropy has only touched the surface, she says. "If there are business people out there who are looking for a new challenge, who can give not only their time and money but also their genius I would encourage them to look into venture philanthropy.”
These are exciting times for SVP, which is in the process of opening in Bangalore. The group there – headed by founding partner Ravi Venkatesen – is getting ready for its first grant cycle. Ruth says the Bangalore partners are choosing to focus on poverty alleviation and livelihoods. "The degree of interest in the SVP model coming out of India has been thrilling,” she says, adding that they are very optimistic that SVPs in Mumbai and other Indian cities will follow in the not too distant future.
The one area where venture philanthropy can make the greatest difference in the world goes beyond just providing financial support, according to both. Ruth is of the view that building powerful relationships among people who want to give back and the nonprofits that make change possible is essential. She says that SVP’s greatest contribution is in preparing a new generation of informed, thoughtful, action-oriented community leaders. Shaks says that we live in a world where NGOs "supply the lifelines to the most disadvantaged”, adding that the world needs NGOs to be the most effective and impactful organisations they can possibly be. "That’s where venture philanthropy can make the greatest difference.”
Catch Ruth Jones and Shaks Ghosh on the AVPN Road Show 2012, when they travel to Mumbai, Singapore, Hong Kong and Tokyo. Register for the seminar and networking reception at the links below:
More information on Social Venture Partners International can be found at svpi.org, and Private Equity Foundation.