The European Venture Philanthropy Association (EVPA) uses the term venture philanthropy (VP) to describe grantmaking and social investment that involves six characteristics: a hands-on relationship between the social enterprise or non-profit management and the venture philanthropist; use of a range of financing mechanisms; multi-year support; non-financial support; a focus on organizational capacity-building; and performance measurement. A recent set of case studies of four European foundations found VP serving as a complement to existing practices and only in one case as an alternative.

The four foundations were: dob Foundation (dob) in the Netherlands, Esmée Fairbairn Foundation (Esmée) in the UK, Fondazione CRT (CRT) in Italy, and King Baudouin Foundation (KBF) in Belgium. The six main engagement models we identified are:

• Employing one or more of the six VP practices Many foundations already do this, often without using VP terminology.
• Funding VP Foundations that think the VP model makes sense but do not want to change their organizational structure may learn about the model by funding a VP organization. Esmée, CRT and dob all use, or have used, this approach.
• Setting up a fund that invests in VP Esmée and CRT have set up a finance fund and a philanthropic investment fund respectively, channelling funds to VP and social investment initiatives. This may be a means to overcome legal hurdles for foundations investing in VP.
• Setting up a VP fund A foundation can set up a VP fund separately from its existing operations. KBF has recently done this.
• Co-investment with a VP fund Esmée, for example, has co-invested to bring its strong social sector knowledge and skills into partnership with others to create systemic change.
• Complete conversion The complete conversion of a foundation to a VP fund involves the overhaul of the organization’s operations, strategy and perhaps even staff. dob has undergone such a change.

In the publication VP Strategies for Foundations: When, why and how to use venture philanthropy, we develop these strategies further. We also highlight how each foundation has faced and overcome legal, governance, HR and operational hurdles in developing and implementing their particular VP strategies. These cases show how VP is becoming an integral part of the foundation toolbox.  

Ashley Metz Cummings is Research Consultant at EVPA and Lisa Hehenberger is Research Director. Emails ametz@evpa.eu.com and lhehenberger@evpa.eu.com

For more information
To receive a free electronic copy of the paper upon its publication in September, email info@evpa.eu.com with the subject line ‘Foundations Paper’. A hard copy can be purchased from Kai Hopkins at kai@alliancemagazine.org.  

Stay tuned to EVPA’s website (www.evpa.eu.com) for information about a workshop related to this publication, and for a roundtable at EVPA’s annual conference in Luxembourg, 16-17 November.