For venture philanthropists, as with most groups in the impact investing space, one of the big preoccupations is scale. More scale allows for more impact. So it was interesting to see two UK venture philanthropy groups – both of whom have strong links to the private equity industry – practising what they preach this year by choosing to merge.
Impetus Trust, founded in 2002, effectively pioneered the venture philanthropy model in the UK. Four years later – at the height of (and partly in response to) the industry’s reputational challenges – the Private Equity Foundation emerged, with a similar mission and strategy. In January, the two groups said they would join forces and become one entity, ‘Impetus – The Private Equity Foundation’, which will be run by Impetus CEO Daniela Barone Soares.
PEI caught up with Barone Soares on the day the merger was due to complete in June. It’s been a complex process, she admits. “Even though the two organisations were similar, we went about things in different ways, using a different vocabulary. To make sure that we understand each other and are talking the same language – that takes time.”
But while this merger has involved all the usual legal and technical difficulties, some of the more unpleasant aspects of corporate mergers – which tend to be focused on cost-cutting – have been mercifully absent, she says. “This is a merger of equals, which is all about gaining scale – so we can provide all our donors and supporters with a single stronger offering.”
Was she a little nervous when she first heard about the idea? “To me it was really positive, because it just made so much sense. These were two organisations that were very similar in terms of the impact we wanted to achieve in society; who had adopted the same methodology; who drew their support largely from the private equity industry and individuals around it. So given the scale and the enormity of the issues we’re trying to tackle, it made sense that we joined forces. I knew it would be a big change, and that would involve a lot of work. But I thought it was a fantastic idea. And still do.”
So far, she says, the reception from supporters has been extremely positive. And importantly, the group hasn’t lost any donors as a result. “We were actually incredibly complementary in terms of our funding sources, which was a nice surprise. The fear was that if there was a lot of duplication we might end up losing funding, but actually that wasn’t the case.”
In fact, she argues that a larger combined group will be a better proposition to donors (rumour has it that one private equity group has already pledged a seven-figure donation, though she declined to comment further on this).