Venture philanthropy: Time to make an impact

For somebody with a background in venture capital or private equity, venture philanthropy (VP) provides an excellent opportunity to combine the thrills of making investments and developing new technologies, processes and approaches to tackle market challenges with doing good and helping drive societal change – through an active engagement and transfer of skills.

IK Investment Partners stumbled into venture philanthropy through a CSR engagement proposal to combat sleeping sickness in Uganda brought to us through a then portfolio company of ours. By intuitively approaching the case as a PE investment (due diligence, active engagement, use of networks, building management capacity, setting targets, measuring impact and investing for sustainability etc.) we came to realise that more could be achieved with less – and that impact was more interesting than output.

By assisting our local Ugandan partner with financial as well as non-financial multi-year support, a commercially sustainable network of private veterinary practices is being slowly rolled-out, helping to improve animal as well as human health, and in addition creating jobs for more than 100 people.

But PE/VC firms can become engaged in VP in all sorts of different ways: they can contribute time, money, networks, or any combination thereof.

Depending on their level of comfort with and understanding of the VP sector, they could for example start by becoming members or supporters of the EVPA. By doing so, they can utilise the network, workshops and conferences to learn more, develop skills and find out about the various ways of engaging with social entrepreneurs in order to drive societal change and find solutions to some of the challenges our societies are facing, in Europe as well as in emerging markets.

PE/VC firms could also use their existing CSR programmes to co-invest with or donate to existing VP funds engaged in causes they can relate to – or even set up their own VP operations, using the skills developed through PE/VC investing to primarily invest for societal impact rather than financial return (or a combination of both).  Such engagement, in whichever form, will typically also help federate staff and increase the firm’s attractiveness as an employer.

In many ways, the PE and VC sectors are already helping to generate social impact, through their day-to-day activities of channelling funding to small and medium sized companies in all stages of development and actively engaging in order to make them stronger and more sustainable, thus making a contribution to society.

What’s more, ESG matters are increasingly being looked at not only in terms of risk protection but also as value driving opportunities – while many firms are already running CSR programmes, even if not all are vocal about it.

As the venture philanthropy sector matures even further and becomes more institutionalised, we can expect to see more direct engagement in generating additional social impact from these firms.

 

EVPA’s 8th Annual Conference will place on 13–14 November in Dublin, Ireland. More than 400 delegates will come together to discuss this year’s title: “Backing the change-makers in a time of uncertainty: Can we do more?” For further information visit
www.evpa2012.com

Anne Holm Rannaleet is Executive Director of IK Aid and Relief Enterprise (IKARE Ltd), a venture philanthropy fund, a Senior Advisor in Public Affairs to IK Investment Partners and Board Member of the European Venture Philanthropy Association.