I read the latest edition of Alliance on my way home from this year’s European Venture Philanthropy Association (EVPA) conference in Frankfurt. I was struck from your publication and the EVPA event by how much time seems to be spent arguing over definitions, in particular whether venture philanthropy is new or not and over the implied assertion that venture philanthropy is somehow better than traditional grantmaking.

I would like to build on a comment made at the EVPA event by Gerry Salole of the European Foundation Centre when he said that the issue we should really be talking about is smart philanthropy versus not very smart philanthropy – there are examples from across the board. Can we just leave the arguments at that and move on?!

As a staff member at an NGO, the key point that strikes me about venture philanthropy is how practical the model is. Venture philanthropists make a decision as to whether their potential investee’s theory of change makes sense, and whether the head of the organization can lead the organization to scale up the organization’s impact. If so, they take a close look at the organization’s capabilities, work with the organization to revise and update its ‘business’ plan, and then invest in the plan in full over a sustained period of time, provided that the organization meets certain agreed targets. Most of the time this involves an investment in the core capacity of the organization, which more often than not means investing in key staff.
 
Compare this to a more ‘traditional’ funding model, in which some funders also like an organization’s theory of change and its leader, but then choose to invest just a small proportion of the funds needed, in an uncoordinated manner with regards to the ‘cost-sharing’ required, for a shortish period of time (normally one to three years), with restrictions on where and how the money can be spent (people don’t like funding staff positions, especially if the staff are based in the ‘west’, and are frightened of what they regard as core costs, a cost-accounting chimera).

Under this model, the implication is that an organization does not need management to deliver its goals, or that staff cannot be trusted to spend their time working towards the organization’s mission.

Let us move past the sensitivities caused by the recent trendiness of and excitement over venture philanthropy. Let funders, whoever they are and whatever their histories, just focus on being smart with their philanthropic resources, by giving resources in a way that lets their investees get on with the work at hand.
 
Peter Kenyon
Operations Director, International Bridges to Justice