The European Venture Philanthropy Association is taking a new look social purpose organizations this year. at the value of venture philanthropy and social investors this year, aiming to help philanthropic organisations become more efficient in deploying their resources and achieve even more social impact.
Using the right mix of financial instruments, the EVPA believes venture philantropists can help social purpose organizations (SPOs) gain access to capital needed for achieving self-sustainability and growth. They believe tailored financing and hybrid finance will help promote a more effective deployment of resources in the venture philanthropy and social investment arena.
A new report, titled ‘Financing for Social Impact – The Key Role of Tailored Financing and Hybrid Finance,’ was launched on 9 November at the 13th EVPA Annual Conference.
The report assesses how funding can be shaped in a way that meets the financial needs of SPOs and how they can have access to more resources by having different actors in the venture philanthropy and social investment space collaborating.
In order to help SPOs grow and scale, EVPA argue that it is crucial to choose the right financial instrument for each investee in the portfolio. EVPA have developed a three-step process of tailored financing to help connect venture philanthropists with the most suitable methods for supporting an SPO.
The report, focusing on SPOs’ adoption of new and evolving business models and with new actors entering the venture philanthropy arena, stresses the value of channelling resources efficiently. Hybrid finance, the allocation of financial resources to impact-oriented investments, combining different types of financial instruments and different types of risk/return/impact profiles of capital providers, is also discussed as a promising and powerful tool for social investors.
According to EVPA Knowledge Centre Director Priscilla Boiardi, ‘The three-step approach of tailored financing developed in the report helps social sector funders channel their resources in a more efficient and effective way.
‘Hybrid finance, on its side, opens up a highly divided market of pure philanthropy and pure commercial investment, in order to give space for the true complexity of the market, in which SPOs act at the intersection between both and are particularly in need of funding that reflects their character of being neither purely philanthropic nor purely commercial.’
For more, visit the EVPA website.