I am writing in response to Peter Kenyon’s letter in the December issue of Alliance. I was also in Frankfurt last year at the European Venture Philanthropy Association (EVPA) conference and would like to pick up on some of Peter’s points.
I agree with him that it is important to look beyond the debates as to whether venture philanthropy (VP) is in fact new and consequently whether it is more effective than traditional philanthropy. If grantmakers can extract the positive elements from the VP approach, or indeed from any approach to philanthropy, and make best use of these to get on with more effectively supporting the work of NGOs, this will be a triumph.
VP has attracted a new generation of donors who have been attracted to the investment language and approach but it has also alienated many established philanthropists, especially in its early days in the USA. This is much less so nowadays, and many of the VP organizations I interviewed have suggested that for VP to be most effective and realize its potential there will need to be more hybrids, and more flexibility and adaptation of the model. This is positive and ties in with Peter’s point in relation to taking what works from wherever you find it and working towards a ‘smart’ philanthropy.
Peter also mentions a frustration with the arguments over definitions. In the context of the bigger picture, I agree. However, while VP is still currently in vogue, having attracted more attention to the field of philanthropy than anything else for a long time, I think it is important that definitions are there to ground all the hype. With so much being thrown in under the VP banner, I feel it is particularly important from the point of view of an NGO hearing about VP and trying to understand what is on the menu, as it were, that everything is clearly defined and unambiguously laid out.
For example, is VP a particular type of or approach to grantmaking? Is it venture investors looking to make a profit from the rapidly expanding social enterprise/green sector? Is it sympathetic lenders/financiers looking to finance social purpose organizations/businesses at sympathetic terms and rates? Is it all of these? At present the term is being used interchangeably in reference to all of the above and more, and this does not help the NGO that is trying to navigate the menu and figure out what is best for them. Well, there is no menu.
I am all for getting on with supporting the work – the actual ‘doing’, but I feel there needs to be clearer segmentation within the field and funders/investors need to clearly communicate their focus, eg venture philanthropy, venture social capital, social finance. This needs to be a coordinated effort across the board so that NGOs do have a clear menu and can choose appropriately.
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