Venture Philanthropy – Who’s trying it?
Monday, 19th June 2000 at 1:06 pm
In the US ‘venture philanthropy’ is the new buzz-word in the world of giving. It is regarded as a controversial movement far removed from the traditional relationship between Foundations and grantees, attracting the big time hi-tech corporations.
It is fast growing in the US, having sprung from Silicon Valley and the successful young players of the new-economy, and seeks to apply some of the techniques of venture capitalism to the Not for Profit world.
But explaining just what is venture philanthropy isn’t all that easy. Its ultimate form is still open for debate with many variations being tested in the US. While some venture philanthropists help charities generate revenue – just as a venture capitalist would do in the business world by sitting on their Boards, others raise funds from the new breed of ‘dot com’ tycoons and develop long term relationships with grantees.
So with venture philanthropy still developing in the States, in Australia it is just in its infancy.
Ricci Swart, the Executive Director of dot.Philanthropy, a strategic Internet consultancy for the Not for Profit sector , says she believes there is a lot of interest and excitement in Australia at the new opportunities available through venture philanthropy.
Swart says one of the major advantages is that it offers medium and long-term relationships that allow the sector to plan beyond the yearly or project by project cycles.
She says the venture philanthropy model uses the same philosophy as the venture capitalist who goes in and looks at the risk, key performance measures, the relationship between the donor and the recipient, funding to make a real difference, the long term picture and the exit strategies.
In the Not for Profit sector, the participants will be looking for the financial as well as the social rates of return with the belief that financial success brings with it sustainability and knowledge of their worth in the community.
Elizabeth Cham from Philanthropy Australia believes venture philanthropy is already being tried successfully by some Foundations here.
She says it’s about understanding the critical needs of the community and working out ways to help.
Cham says with venture philanthropy, these Foundations are drawn to issue based funding, possibly changing the nature of the service delivery by charities to make them more efficient, and offering a long term relationship.
She adds a cautionary note saying it involves innovation and risk taking that many small mainstream charities don’t have the staff or infrastructure to handle.
She says there are several examples of good venture philanthropy in Australia. The William Buckland Foundation has already shown the way with a number of causes for disadvantaged people including the work of the Jesuits with ex-prisoners.
However, she says some Foundations still feel the need for their traditional base of giving and of course the agencies will always welcome the cheque.