The UK-based Cranfield Trust has launched the Smart Fund, a new venture philanthropy initiative that encourages philanthropists to support charities addressing issues of disability, poverty and social exclusion. In addition to generating a social return on their investment, the initiative will provide the philanthropist with analysis and evidence of outcomes, long-term impact assessments and a defined exit strategy for both parties.
The aim of the Fund is to create an attractive investment model calculated to appeal to the so-called ‘new’ philanthropists, that is, donors who have made money and are now looking for ways to put some of it to social use. One of their supposed characteristics is a more direct approach to giving, but Cranfield reckons that closer reading of the evidence suggests that what we are actually seeing among this group is a greater reliance on donor advisory services. Its new investment model takes account of this by giving investors the means to engage directly in leveraging a major step change in the operational activities and effectiveness of over a thousand charities. The appeal is that for a minor investment it provides the serious philanthropist with a unique power of influence across the voluntary sector that cannot be gained from the more generally advised philanthropy.
The aim of designing and creating a co-investment prototype has so far proved successful. The Smart Fund requires ten investors as Founding Partners and during the initial pre-launch phase (up to April this year), it found four of them.
Cranfield Trust was founded in 1988 and provides pro bono high-level management consultancy support to charities.