Interview: Steven Serneels, chair of EVPA

There’s investing for impact and investing with impact. On the heels of the recently concluded EVPA annual conference, new chair Steven Serneels explains the distinction to Alliance and also outlines the Association’s convening role in bringing different forms of capital provider together in innovative responses to social problems.

Steven Serneels. Photo courtesy of EVPA.

Alliance magazine: The association has just got a new CEO and you’ve moved to the role of board chair. It seems that roles rotate quickly at EVPA. Is that deliberate policy or just how things have turned out? Steven Serneels: When I became CEO in mid-2018, I was already a board member, so it was a deliberate choice that we would shift gear and that I would put EVPA back on the rails and transition out once we had a clear and good successor. We hope to have Roberta with us for a number of years, so there is a long-term view to safeguard continuity.

What do you mean by ‘back on the rails’?
This space is changing so rapidly that we felt after 15 years there was a danger that we were continuing to do what we’d been doing fairly well in the past but which wasn’t good enough for the future. We were very innovative when we started and it took a while to make sure that all those concepts and ideas and the entrepreneurial spirit in philanthropy were visible and people were starting to talk about them. I think we succeeded but like any organisation, there is a danger that you get stuck in what you are good at and we felt that we should change how we position ourselves and the narrative we were putting forward.

How will your role change, now that you have moved from CEO to board chair?
As part of our plan in 2018, we decided we would look not for a managing director, but for a CEO which means that she has full responsibility from strategy to operations. So, while we’re a very supportive board, we don’t get involved in the day-to-day running of the operation. We are much more about setting out the long-term vision. Once we have that, it’s up to the CEO to determine the path forward and the means of getting there. So my role along with my fellow board members is to make sure we’re continuing to move in the right direction and to think three to five years’ ahead about where we need to go.

There are now venture philanthropy associations around the world – AVPN in Asia is well established and AVPA in Africa and Latimpacto have recently been formed. How closely are you all associated and what’s the relationship between you?
That has changed too, and the relationship between the RMAs – the regional membership associations you named – has become much closer over the last nine months. At EVPA for example, we have a liaison officer whose explicit role is to oversee the exchange of assets, capabilities, etc, that the others can benefit from. We’re in the midst of a process of how to maintain strong and distinct RMAs and, at the same time, build a global narrative.

Our hope is that much more grantmaking becomes long-term, patient, results- and outcome-driven.

So the liaison officer maintains the links between the different associations?
On the operational level. On the strategy level, it’s the CEO him- or herself who gets together with their counterparts and has regular meetings to craft this future of growing together.

And what do you think is the value of this relationship to the different organisations?Honestly, we are still dealing with that question. As to internal benefits, it’s quite straightforward. Asia has a deal share platform which they have put a lot of work into and we can benefit from that. We have a strong programme for corporate social investors, and on training and capacity building from which the others could benefit and so on. But that’s not the prevailing reason why we come together. The prevailing reason is that we feel we could bring value to our members and should build a global narrative on investing for impact in which we can be a clear and loud voice to communicate with other global stakeholders in this space because it’s changing so fast. The United Nations is involved, the European Commission, OECD and many corporates, all of them trying to figure out what to do about impact and in order to be a strong voice in the field, we have to make sure that we come forward as a unit – to be recognised as such by the others, but also to shape the story.

The trajectory of EVPA is an interesting one. When it started, venture philanthropy was a new approach in Europe but, since, it’s become accepted and almost mainstream. Is there any real distinction between venture philanthropy and more traditional approaches now?
I would love to say that the boundaries are blurred, but I don’t think they are yet. I would say that there is still a lot of short-term grant giving, while VP has a much longer, more patient connotation. There’s also still a lot of transactional grant-giving, where the giving of the grant is the main thing, whereas VP tries to define much more clearly what the overall aim is, building the organisation so that it can achieve its outcomes. The way we do that is not prescriptive. Our hope is that much more grantmaking becomes long-term, patient, results- and outcome-driven.

Your rhetoric is now investing for impact, which is much broader than VP. Is there a point when it becomes too broad and increasingly difficult to keep all those interests together?
Let me first make the distinction between investing for impact and investing with impact. In investing for impact, you take the social goal first then you reverse-engineer it to the kind of financial tools you need to get to that impact, whether it’s grants or loans or equity or some form of hybrid capital doesn’t matter – it’s about how you best create impact. Investing with impact is the reverse. You have a fiduciary duty to fulfil certain financial returns, but taking impact into consideration de-risks some of the financial risks and might give a better return in the long run, so Investing with impact is a means to another end. We have just calculated the investing for impact market in Europe at about €6 bn. That’s a bottom-up figure, so it’s probably conservative. We spoke to our members and to some financial institutions and we confined it to direct social investments, not funds of funds and so on. Now, it’s a reasonable number, right? But at the same time, it’s dwarfed by the trillions of mainstream capital. That capital is also talking about impact, corporates are talking about impact, governments are talking about impact, We felt that, in order to have a voice and a presence, it was critical to occupy a space where impact is the driving force and we saw it as our role to ensure that that and the different financial means used to achieve it are at the heart of the debate.

The value of investing for impact is not its size, it’s its innovation and its bold approach to risk in addressing social challenges.

I see that, but I wonder if the term impact, in becoming a buzzword as you point out, is in danger of becoming meaningless and even the investing for impact distinction includes a large number of very disparate groups. How hard is it to fairly represent all of those voices?
In EVPA’s development, there have been three phases. The first is that we wanted venture philanthropy to be recognised. We think, as you mentioned, we’re about there. Maybe not entirely but close. The second is that each of the players in VP, whether it’s a social impact fund, a social accelerator, a foundation or whatever, should understand their role. So in the last two years. we’ve set up sub-groups to that end. In the third phase, we see EVPA reconvening all the different actors around a concrete social challenge. Let’s take an example – social housing. To be successful, impact oriented commercial capital needs to come together with grantmakers and social investors because the amount of money which is needed in Europe to set up really good social housing is massive. How do those forms of capital sit together? It could be that investors with impact invest in the bricks because that’s the physical part. It needs large amounts of money and they can get a financial return, but the people living in those houses also need to be supported. For example, making digital services accessible and affordable for those people, which in turns makes processes, such as paying electricity bills more efficient for the service providers, so grantmakers or social investors might provide digital literacy for residents. All this is part of building that community. So if you start from the social challenge, you reverse-engineer to the different components that are needed and you find the different roles and the different forms of capital providers to create holistic solutions. The role of investing for impact is to make sure that all those impact-driven resources – financial, intellectual and human – come together in the right blend to solve the social issue.

And you see EVPA’s role as bringing all those interests and capabilities together on a given issue?
Yes and over the next three to five years, we’d like to be growing into that role, together with the other organisations who want to join us as custodians of the investing for impact space because we need to collectively define this space with foundations, with social investors, with social enterprises and so on.

You are talking about different forms of private capital. What is the role of public authorities?

It varies from geography to geography. When I first entered this field about 10 years ago, I joined Ashoka Global and my first assignment was to find out how many social entrepreneurs and social enterprises there were in different parts of the world and, guess what? I could find almost none in the Scandinavian countries or in Japan. Where there is a strong state welfare model and citizens trust it, there are fewer gaps for social enterprises to address. It’s interesting that impact investing is flourishing in the US, in the UK, among other countries. That’s where we have to be adaptable and that’s why our sister organisation AVPN is addressing the invest for impact space from a slightly different angle than we are in Europe.

You talked about your convening role. Obviously, there are a number of infrastructure bodies in Europe of which you are one. Do you see a clear demarcation between what you do and what EFC or DAFNE or NEF does?
I prefer to see us as complementary. I also strongly believe that we should work together. When we started this investing for impact narrative, the first thing we did was to reach out to EFC. EFC is very strong on understanding the foundation space and on tax issues for cross-border giving, for example, where EVPA doesn’t have a clue. EFC and DAFNE are strong on advocacy for philanthropy. EVPA is not addressing that question. DAFNE is very grounded in the different national networks. NEF is strong on convening foundations around a particular topic – migrants, democracy, and so on. We are very strong on understanding how multiple financial tools can come together along the spectrum of capital to address social challenges. That’s where the different components should align and reinforce each other.

Another major challenge to be addressed … is the issue of digitisation. We should be able to give good numbers on investments in our space and we should look at how to build a digital community.

So it’s a question of streamlining rather than redundancy. You all have your different strengths and the key is to find a way to play to them and put them all together.
Yes, absolutely. Of course, there is overlap because for instance foundations are exploring the spectrum of capital. They used to be pure grantmakers and now they are beginning to set up social impact funds, so they become members of EVPA as well as EFC, so when we launched a programme to help European foundations in this journey along the spectrum of capital, we asked EFC to join.

You’ll have seen Larry Kramer’s recent sceptical remarks in Alliance about impact investing ‘nibbling around the edges’ of the existing system, whereas what’s needed is a radical change. What’s your view on that?
Here again, I think making the distinction between investing for impact and investing with impact is very helpful. The value of investing for impact is not its size, it’s its innovation and its bold approach to risk in addressing social challenges. I come out of the corporate world and I often compare it with companies’ R&D budgets. It’s generally small, maybe five per cent of the total turnover, in exceptional cases maybe as high as 15 to 20 per cent, but it’s crucial. It defines where the company is going in three to five years time. Similarly, you need innovative, risk-tolerant, long-term capital in order to explore social and environmental innovation. That’s a role that investors with impact or corporates will not play. As an example, the microfinance space which is now a multi-billion dollar industry involving commercial parties would never have happened if investors for impact had not spent big money in grants to create that space and sometimes to fail. We need the risk capital or else investors with impact will not have a pipeline. The problem is that impact investing full stop is too vague a term, but if you break it down into these two categories it becomes much clearer and you see the roles and responsibilities in each. And we can collaborate much better with each other because collaboration starts when you can see your own strengths and your own limitations.

I think there’s a wider question in what Larry Kramer is saying which is whether you can use the means a system provides to change it. Investors buy into the existing system, it shapes their intellectual map, if you like. Are they able to break out of that to change the whole structure?
There I fully agree with Larry. Again, defining the impact space in the way we suggest might help craft the beginning of an answer. Innovations supported by investors for impact can help create a paradigm shift. It’s not just about the innovation of an individual social enterprise, but if you have hundreds or thousands of innovations in a certain sector or on a specific social challenge at a point in time, the critical mass is such that you tilt the sector and innovation becomes accessible and attractive to mainstream capital and bigger parties, like investors with impact, become involved. For me, that’s what happened with the green revolution. In the 70s, ‘green’ was very marginal. It took a lot of investment and experiment and failure, but now there have been so many innovations in the green space, that many of them are commercially attractive. We should do the same in the social sector. Social is the new green.

You mentioned collaboration a few moments ago. In your keynote speech, you urged investors to be more ambitious about collaborating. Can you expand on that?
There is definitely one thing we, as member organisations in the invest for impact space, should do better. We should connect and create transparency on the common interests of our different members so that they can find each other more easily. If one is providing technical assistance and infrastructure support in a certain area, another might invest in that space because their colleague de-risked the investment. We should be better at creating these opportunities. The second thing we should do is to showcase – and there are some good examples of this like DOEN Participaties, Kampani and Pluralis – where initiatives are walking the talk using blended finance and bringing together many stakeholders to create and scale solutions, as well as create continuity along the lifecycle of the venture.

You talked about EVPA’s role in convening different forms of investment. How do you see the association developing over the next five years or so?
As I mentioned earlier, we should focus on a couple of concrete social challenges, maybe social housing as I said earlier and healthcare systems. We should make sure we create sufficient social innovation in health so that the treatment systems become far more proactive than reactive and in ways that are affordable and accessible for everyone. Another area might be employment. How do we make sure that not only disabled people but also people who need to be reskilled and migrants and so on, can be integrated into the workforce. We need sufficient cases that can be shown to work.

Another major challenge to be addressed – and it’s something EVPA absolutely cannot do alone and all networks in the invest for impact sector should come together – is the issue of digitisation. We should be able to give good numbers on investments in our space and we should look at how to build a digital community. That’s a massive effort but we should make sure that in three to five years time, we’re doing that.

We felt that, in order to have a voice and a presence, it was critical to occupy a space where impact is the driving force and we saw it as our role to ensure that that and the different financial means used to achieve it are at the heart of the debate.

How will that work? Are you thinking of initiatives like the data centre that Fondazione CRT has just opened in Turin?
That’s one element and a good start. DAFNE, EFC and EVPA are in the process of convening the players in that area and of thinking through what it should look like. Again, it should go beyond philanthropy. It should bring in all those in the invest for impact space. It will take time and a major effort to figure it out.

It’s impossible to conduct an interview these days without mentioning Covid-19. There were lots of positive noises at the conference and lots of examples of what people are doing to combat it but as you mentioned in your keynote, even in the Netherlands, with a strong tradition of social welfare provision, inequality is increasing. Despite the innovations that are undoubtedly happening, are we losing ground and has Covid made that worse?
A very difficult question. I’m a realist but I’m also an optimist and those two things are struggling with each other. I don’t want to be blind to what’s happening and say, ‘No, no, we’re innovative, we’re resilient, we’re going to get there.’ That’s too naive. There are forces that are working against us and we should be very conscious of them. Where I’m a pessimist is that I think we have to go through hard times before we fully understand the threat we face. Like with climate. We need another couple of disastrous floods – although we rationally understand it now – before we start acting en masse. My optimistic side says that, once we get to that kind of exposure, we have the agility and resilience to act but – and that’s where my belief in continuing to work on solutions comes from – we should also have at that point the insights and the armoury of tested solutions to then turn things around in the right direction.

How much of an obstacle to EVPA’s development has the inability to convene face-to-face meetings been?
It is an obstacle because – take Spain, for example – you have to go there to see and visit the important players, like ONCE, Ship2B Foundation, Open Value Foundation, Repsol Foundation, etc and talk to those people and sit together to really see and understand what is happening and how it can progress. Only capturing this by hearing people talking to you through a computer doesn’t take you where you want to be.

Andrew Milner is Associate Editor at Alliance magazine.

  • Read Alliance magazine’s coverage of EVPA’s 16th annual conference here.

Comments (1)


I loved all the insights from this interview! At Latimpacto, a feel proud to create a network following all the lessons learned from our sister Network EVPA and see the opportunity to connect Latin American social investors with their peers in Europe, Asia, and Africa. There are vast opportunities for working together the 4 RMAs to move more capital towards impact!

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