Venture philanthropy funds typically work intensively with a handful of organizations. While the approach has yielded good results for the organizations in question, the wider impact is necessarily limited. Impetus Trust, one of the first UK venture philanthropy funders, is now launching a new initiative on reducing reoffending, which will widen that very specific focus and seek change on a much larger scale. Impetus co-founder and vice-chair Nat Sloane talked to Caroline Hartnell about it.

Venture philanthropy seems often to achieve fantastic results with the resources available but the number of organizations you can work with so intensely is limited. My understanding is that the way you’re approaching the reoffending initiative is an attempt to make a broader impact with the same resources?

Our idea in setting up Impetus was to see if we could demonstrate that a venture philanthropy model – strategic money and expertise, harnessed and managed by an investment director – could make a significant difference to ambitious, innovative organizations. The focus was on helping those organizations through their step change, to grow and do more for more people. And I think we did that during the first five years. There was 40 per cent annual growth in the charities’ income and nearly 60 per cent growth in the number of people they were reaching, and their impact, which was better tracked, seemed deeper.

But we got to the point you mention of asking, ‘OK, so we’ve helped a dozen organizations, and we think we have an effective model for turbo-charging good organizations. How can that model be used to make a difference beyond just an individual organization?’ So we started talking about the idea of picking certain thematic areas where we would try to concentrate more of our resources so that, instead of engineering a step change for an organization, we were engineering system change in an area of significant social importance.

How does this change the way Impetus operates?

Naturally, you couldn’t think of doing this with a limited amount of resources in a short period of time. It requires much longer-term horizons to seek meaningful impact in a wider ecosystem. We also need to work in closer partnership with other organizations that do things we definitely don’t do and we don’t think we would be as good at doing – moving from venture philanthropy 1.0 to venture philanthropy 2.0, so to speak.

So we decided to pick some thematic areas where we thought we had knowledge, where we thought we could help innovative organizations to achieve meaningful social impact that could be measured over time, and which may not be so popular that everyone was keen on doing it. Reoffending was the first area that came up. We had already worked with St Giles and Blue Sky, and then we were approached by the Sainsbury Family Charity Trust (SFCT). They were interested in doing more work in reducing reoffending and they knew us and our methods, so they suggested creating an initiative together. The combination of how our own ideas were developing and this approach from an organization that we admired and had worked with together provided the stimulus.

Another element in our thinking was that we had decided to focus on alleviating poverty in Britain through access to education, skills and jobs. What we had seen with St Giles and Blue Sky was that skills-building and jobs are crucial to getting people out of prison and keeping them out. So it all dovetailed nicely.

Presumably, from your experience, you had some inkling of what the things in the system were that needed changing, and that you weren’t going to be able to change these through working with one organization?

Absolutely, and when we had discussions with Victoria Hornby and Fran Sainsbury (from SFCT) we decided that we were looking at a ten-year plus timeline, and that there were going to be at least two major phases. In the first phase, the first three to five years, we and our partners will look for organizations that are delivering innovative services to help reduce reoffending, or working with prisoners to build skills to help keep them out of prison for good.

So we would be doing a lot of what Impetus does with individual organizations, but working with a portfolio of maybe six organizations to assess which models of intervention and which organizations we think have the most potential. This phase will be very much about building capacity, helping to scale up and, ultimately – maybe in year five and beyond – helping them figure out how their model can be disseminated throughout the system.

St Giles, for instance, is great at through-the-gate services [when prisoners are released], and we think that could be part of the resettlement model that’s built into every prison contract. That doesn’t mean that St Giles is going to deliver the service in every prison, but under our approach we would be helping them to find ways to get the traction with stakeholders so that the model gets taken up nationally. Illustratively, you and I might be sitting here in 2020 talking about how this very effective model for getting people out of prison has been embedded into all the resettlement contracts, reoffending has come down by 10 per cent, and the government didn’t have to build the five new prisons that it was planning.

So we want to be part of a wider systemic change. Impetus is quite good at helping organizations that have a real ambition to grow, but there are two other things that I think are crucial. One is what we’re calling link-up. In terms of work on reoffending, there are activities that happen within the walls of the prison, there’s stuff that happens out in the community when you’re released, and there’s the through-the-gate transition as you come out. The organizations we’re working with are going to need to have the mindset, the ability to partner with other organizations so there’s an effective cell-to-community transition. It’s very unlikely that one organization could do all of that across the country, or even in a large region, because what’s involved in reducing reoffending is complex, multi-dimensional and taking place physically in three different places. So it’s a question of creating an ecosystem, and this is going to require organizations to work in a much more collaborative way.

And you think that Impetus isn’t the organization best suited to this element of your idea?

We’ve linked up in the initiative with SFCT, Esmée Fairbairn, J Paul Getty Jnr and Henry Smith [Foundations]. They know a lot more about the not-for-profit organizations that have been working in and around the prisons, so they’re providing knowledge of the sector. We are also talking to an organization that could provide monitoring and evaluation support. Then there’s a third element: alongside scale-up, which we’re good at, and link-up, which our funding partners are good at, there’s the speak-up part, which is much more about advocacy and promoting effective tools.

And they’d be contributing their own resources?

Exactly. So you end up with this ecosystem of organizations providing an intervention model that goes beyond one organization’s boundaries and shares a long-term vision of trying to make a meaningful difference in this area of reducing reoffending.

How far have you got with this?

We’ve started. The four organizations with Impetus have put up nearly £2 million of initial funding and we’ve identified – and we will finalize this in the autumn – the first four organizations in the portfolio, plus Blue Sky, which is currently in the Impetus portfolio. We’re looking to build up an advisory group of six to eight people – a range of people that we can draw on for expertise. We’re also beginning to think about the best way to begin dialogue with the new government.

Are you likely to add to the portfolio of five?

Probably. We have the funding for the first five, then we’d like to go out and get additional funding to add probably another two or three organizations.

This is in addition to your more general funding?

Yes. We’ll have the general work as well, which is still targeted to breaking the cycle of economic and social disadvantage – jobs, skills and training are at the heart of breaking that cycle. We’d also like to have two or three other thematic areas like reducing reoffending – we’re evaluating a couple of others at the moment.

Of the funders in your group, I believe that Esmée Fairbairn and Sainsbury have some money in venture philanthropy-type funds already and maybe this will encourage them to put a larger amount in. Do the other two have venture philanthropy-type funds?

I don’t think so, but I don’t know is the honest answer.

If they haven’t, it does seem like it will be a way of bringing new funds and possibly new funders into this sort of type of funding.

Certainly that’s the hope – it’s early days at the moment. But we also think that government ultimately is a crucial part of this if we want the model built into every resettlement activity. This goes back to your opening comment that our sector has limited resources, so we need to use those limited resources to best effect. That’s what we’re preaching to the organizations we’ve been working with, and that’s what we’ve got to practise as well.

There’s a very readily measurable element to the reoffending question. Is that one of the reasons why you decided to focus on it?

Absolutely.  It’s an area where we can measure success and there is also a clear cost benefit to society of reducing reoffending. The other element for us in choosing that sector is that it’s one that resonates with a lot of funders. Although most of us don’t have criminal records, it’s an area that people know touches them, through either crime or fear of crime. So although it’s edgy and not popular, it’s actually very easy to relate to.

Nat Sloane co-founded Impetus Trust, the UK’s first venture philanthropy organization, with Stephen Dawson in 2002. Email info@impetus.org.uk