Venture philanthropy in Europe hits €1 billion

 

Chris Carnie

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Chris Carnie

€1 billion, the cumulative total of philanthropic investment by venture philanthropy in Europe. This was the big announcement at last week’s European Venture Philanthropy Association(EVPA)  annual conference in Turin. The sum, drawn from the first analysis of a pan-European study by EVPA, is seen as evidence that the sector has grown up. It has grown up – but as with the mainstream foundation sector the growth has been uneven and the bulk of the value is concentrated in a few large funds.

Martine Godefroid

EVPA was founded in 2004 by five venture philanthropists from France, the UK, Italy, the Netherlands and an adopted American. Last week’s conference had a full house of 400 participants including now maturing VP funds, start-ups, major foundations and a handful of people from traditional NGOs. The corridors and coffee breaks were packed with bankers, social entrepreneurs, venture funds and foundations talking about social impact and social enterprises, philanthropy and social change; one delegate said that he had never known a sector so keen to share information and best practice. Outside, Italy was changing its government and the Turin students were protesting against the worst of capitalism. Inside the mood was optimistic and the talk was of growth.

What were the big themes of this year’s conference? Case studies of success and lessons from failure, growth and sustainability, impact, and ‘impact investing’ all emerged during an intense two days. Let’s look at these in more detail:

Venture philanthropy is new to Europe, so the first results of this investment approach to philanthropy are only now emerging. Italy’s Oltre Venture, led by veteran investor Luciano Balbo, reported on its successful social housing initiative. Sr Balbo had wanted for years to do something about homeless people – something other than offering them charity on the streets – so he put together an investment group including a multi-billion-euro foundation and the City of Turin. They built a social housing unit that self-sustains by renting hotel apartments to paying guests; the apartments fund the social housing. At the other end of Europe, Norway’s Ferd had invested in Forskerfabrikken, ‘The Scientist Factory’, a social enterprise that earns income by training teachers to teach science, and uses the surplus to provide proven-successful, fun, science classes for kids as an after-school activity. The Scientist Factory is now mature enough (it was founded in 2002) to be able to demonstrate the successful outcomes of its work with kids.

Growth and sustainability were common themes in the conference. The growth is coming from all sides. The conference itself has grown – this was the largest ever conference on VP in Europe – as have the numbers of members of EVPA. Investors – people, foundations and companies – have grown in numbers and in investment value, with banks and institutions now putting their money into VP – such as the funding from BNP Paribas for Oltre’s microcredits investee PerMicro. Sustainability was mentioned frequently. In an offstage moment Damon Buffini told me that people want lasting solutions for social problems, not an eternal round of charitable hand-outs. He talked about the Social Business Trust, which he co-founded in 2010 with partners including the consultancy Bain and Co. When Bain carried out a survey of its staff this year to find out where they wanted to direct their volunteering activity, the universal response was ‘social enterprises’. Social enterprise – so popular that it now has its own Twitter hashtag, #socent – is one of the futures that this conference focused on.

The other was impact investing. The idea that people of wealth, foundations and companies should direct their investment portfolio to focus on social impact was expounded forcefully by Charly Kleissner of KL Felicitas Foundation. He envisioned a world in which the ‘dinosaurs’ who invest only for profit will die out to be replaced by investors whose holistic view of impact will do better for them and better for the world.

A key part of impact investing is, of course, impact. And that means measurement – a common theme in VP and one that has been discussed at every EVPA conference. A variety of methods are emerging and EVPA is pushing for better and clearer standards for impact analysis. But impact measurement remains an uncertain science and there is no clear acceptance of a single impact measure. A copy of Mario Morino’s book A Leap of Reason: Managing to outcomes in an era of scarcity (Venture Philanthropy Partners, 2011) was given to each delegate, emphasizing the message that however they are measured, social outcomes and then economic impact are central to the future of this type of philanthropy.

No one believes that VP will wholly replace traditional philanthropy. So long as humans want to help others we will carry on simply giving. But we are wrestling with social problems whose scale, in an era when governments offer only draconian cuts, means that sustainable models must be developed. Last week’s conference confirmed that VP can show us one route towards that future. Turin showed that the voice of venture philanthropy is getting stronger and its influence, among new and old philanthropists alike, is growing.

Chris Carnie of Factary was the chair of this year’s EVPA conference; Martine Godefroid is managing director of Factary Europe. The views given in this article are the personal views of the authors and do not reflect EVPA policy.

 

Tagged in: Europe EVPA Impact investing Measurement sustainability Venture philanthropy


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