Venture Philanthropy

Venture Philanthropy

The Academy for the Development of Philanthropy came up with the idea of creating the ecosystem of support for not-for-profit organisations, i.e. organisations that pursue social goals while engaging in business where profits are invested in good causes, appears to have gaps that must be bridged. Mechanisms should be put in place to help such organisations achieve sustainability. Sustainability is defined as the ability to plan forward, build strategies and budgets, improve social impacts and reduce dependence on financial assistance in the form of grants. There is no regular non-financial support in the form of counselling, training or mentoring.

This gap can be bridged by venture philanthropy that seeks to strengthen organisations that pursue a social mission by providing them with financial (various financial instruments) and non-financial (technical counselling) assistance to increase their social impact. Venture philanthropy is characterised by a partnership approach to supported organisations. Investors in the venture philanthropy sector usually concentrate on social impact rather than on financial returns[1].

The pilot grass-root social enterprise support ecosystem described in this chapter will use mechanisms of venture philanthropy to ensure support for not-for-profit organisations that focus on building and developing the common good and to foster activities leading to self-sufficiency and sustainability in programmes and projects. Both financial and non-financial support will be provided, including training, counselling and mentoring, based on the venture philanthropy model developed by the European Venture Philanthropy Association.

Non-for-profit organisations in Poland may provide their core services on a commercial or non-commercial basis or may engage in business. It has been a long experience of the Academy for the Development of Philanthropy in Poland that an organisation is more likely to achieve sustainability it relies on at least two types of operations. Therefore, organisations receiving support will be given an opportunity to develop and test business the following models:

  1. Model based on commercial and non-commercial core services;
  2. Model based commercial and non-commercial core services and business activity.

Modern philanthropy concepts will be applied in both models.

Moreover, two education campaigns will be held: first, to increase public awareness of not-for-profit operation, mainly by presenting cases in the area of education, culture, sports, and other; secondly, to increase the awareness of modern philanthropy and how it can be utilised in common good projects. The goal of the campaign will be to educate non-governmental organisations about potential funding sources for social activities and the available business models.

The proposed support ecosystem will be based on the network of Act Locally Centres, the largest support network for grass-root non profit initiatives. It has unique expertise not only in training and counselling but also in grants for local non-governmental projects. In addition, existing components of the commercial business ecosystem will be utilised. Act Locally Centres are managed by local non-governmental organisations in the framework of a Polish American Freedom Foundation programme implemented by the Academy for the Development of Philanthropy in Poland since 2000. Currently, this is the largest network of organisations that support local initiatives. It affiliates 67 Centres that operate in 618 municipalities. Act Locally Centres will be responsible for building Local Venture Philanthropy Incubators in the social enterprise support ecosystem. The role of Incubators will be to support not-for-profit organisations in their efforts to achieve sustainability by offering them financial and non-financial assistance in the framework of venture philanthropy.

The role of the Academy for the Development of Philanthropy in Poland will be to intermediate between investors and co-investors who fund civil society organisations and to provide technical guidance and leadership to Local Venture Philanthropy Incubators.

[1]EVPA Report Practical Guide to Venture Philanthropy and Social Impact Investment.

 

GOAL

The activities are designed to build an ecosystem of financial and technical support for not-for-profit organisations that engage in building the common good or shared resources and are keen on applying venture philanthropy mechanisms, have the biggest potential to achieve sustainability, to increase the scale of their operations and to assure positive social impacts.

 

ECOSYSTEM BENEFICIARIES

The ecosystem will support local not-for-profit organisations which:

  • implement sustainable social projects focused on the maintenance and development of the common good;
  • pursue social missions for maximum social impact;
  • are driven by innovation and open to long term strategic development vision;
  • are keen to work according to the change theory.

Priority will be given to organisations that:

  • have worked with Act Locally Centres;
  • have existing experience in:
    • using a variety of different financial instruments;
    • successfully investing in social operations;
    • have been involved in CSR;
  • need a capital injection (funds) to make incremental improvements in operations.

 

OUTCOMES

The following will be achieve in the next three years:

  1. A starter culture of Local Venture Philanthropy Incubators of at least five organisations each will have been created.
  2. At least 10 not-for-profit organisations will have used the support of Local Venture Philanthropy Incubators .
  3. At least three not-for-profit organisations will have received non-financial support and grants in the incubation phase.
  4. At least one not-for-profit organisation will have received a loan in the acceleration phase.
  5. Good practice in grass-root venture philanthropy will have accumulated in Poland (venture philanthropy solutions).

ECOSYSTEM STRUCTURE

In the framework of the pilot grass-root social enterprise support ecosystem three experienced Act Locally Centres with the support of the Academy for the Development of Philanthropy in Poland will create a starter network of Local Venture Philanthropy Incubators . Their role will be to promote venture philanthropy, build local partnerships around the concept and ensure financial and non-financial assistance to local not-for-profit organisations in the area of common good development that are keen on applying venture philanthropy mechanisms, have the biggest potential to achieve sustainability, to increase the scale of their operations and to assure positive social impacts.

Figure 1. Pilot social enterprise support ecosystem at the local level.

 

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