The SVP model: Investing in Canada's social economy

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Social venture partner groups, or SVPs, are a fresh face on the Canadian philanthropy landscape. Often unnoticed by the public, social venture partners are trying to reshape the way Canadians address social needs. A combination of innovators and forward-thinkers, SVPs apply more permanent solutions to longstanding problems. Though they struggle to gain acceptance for their plans, they persevere to improve every Canadian's life.

Creating a viable economic future

One such group is British Columbia-based Renewal Partners (RP), a seed capital company that invests in for-profit, socially conscious businesses in BC. RP supplies tools such as early investing, professional mentoring, and networking to businesses promoting conservation and other socially responsible activities. Their mission statement says that, "profitable enterprises with maximized social good are a necessary formula for a viable economic future."

Joel Solomon, president of Renewal Partners, believes in sustainable, profitable businesses with a commitment to the future well-being of all Canadians. He writes that we must start, "building lasting businesses that place environmental and societal returns on the same level as financial and grow all three." Since starting their social venture enterprise in 1993, RP has invested in such socially conscious companies as Happy Planet Foods, Ben & Jerry's, and Mountain Equipment Co-op.

Connecting venture philanthropists and local nonprofits

Also doing their part is Social Venture Partners Calgary (SVPC). Established in 2000, it's a Canadian division of the larger SVP International, which is headquartered in Seattle and operating in 23 cities worldwide. SVP Calgary is committed to linking resources from venture philanthropists to aid local nonprofits. Boasting more than 100 partners, SVP Calgary effects positive financial and social change among a variety of organizations.

Kathleen Speakman, executive director of SVP Calgary, says it's critical to discern between the "old philanthropy" (read: just throwing money at organizations) and the newer trend of cultivating social venture partnerships. "We use a self-assessment tool that measures a nonprofit's organizational capacity. It includes areas like HR, legal, accounting, fundraising, and strategic planning. [This] helps nonprofits identify their strengths and weaknesses and establishes capacity building goals over time."

SVP Calgary differs from other funders because they believe in addressing the daily operations of nonprofits first. "They don't tend to have the money to put into organizational capacity building," says Kaulback. "As a fund provider, we recognize that it's easy for nonprofits to get start-up money. But to get money for professional development or classic administration needs is much tougher. We're in the minority in that regard."

Working together to achieve sustainability

Indeed, SVP Calgary follows an "engaged philanthropy" model. SVP investors work alongside their investees to guide the nonprofits into sustainability. "It's a matter of building relationships," Kaulback asserts. "The culture of the nonprofit sector is different than the profit sector. There has to be learning that occurs on both the partners' part and the nonprofits' part. We invest [time] to build that trust. Once they're comfortable sharing their challenges with us and not just telling us about their successes, that's when we get to the meat of really helping them." And they're not alone in that outlook.

BC Technology Social Venture Partners (BCT-SVP) is another new player. Founded in 2001 by business leaders in the technology industry, this Vancouver-based operation also derives its philosophy from the SVP International model, linking venture philanthropists' resources and skills to nonprofits. BCT-SVP focuses its funding and resources in helping local nonprofits in the areas of children's aid, inner-city issues, and women at risk. The organization also has youth on its side.

Kathleen Speakman, executive director of BCT-SVP, explains that because the tech sector contains a relatively young demographic, BCT-SVP partners take a very engaged and enthusiastic approach in helping their investees. "It's a fairly young industry sector, but it began to mature," she says. "A sign of maturity is [when] you start to think about giving back. [The partners] began looking around for something that would appeal to them. They came across the SVP model and they thought 'this is for us!'" With more than 70 partners, that youthful exuberance allows for flexibility in other ways as well.

Willing to learn while also taking risks

"There's a higher tolerance for risk in the grantmaking. The group has a tendency to be attracted to grassroots organizations with a higher need for human resources," says Speakman. "There's an interest in more innovative ideas...in replication, in scaling, and it's a very active and action-oriented type of support." As such, BCT-SVP partners and investors enjoy very close working relationships with their investees, often with pleasantly surprising results.

"The partners maintain that they learn as much as the investees do. They have their eyes opened to so many different problems. They also see that there are many talented people working in the not-for-profits, helping to address really pressing social issues," Speakman says. "[In] some of our most successful partner/investee teams...the personalities are very similar. Our most successful projects are a result of a match between very entrepreneurial, opportunistic personalities. That has been a pleasure to discover for everyone involved."

Speakman knows that venture philanthropy is still the new kid on the block, filled with energy and a fresh perspective. However, she also sees it as a great complimentary player with other tried-and-true approaches. "Venture philanthropy is a big part of what we're now calling the 'social economy'." Still, there are others who want to contribute with more singular creative proposals.

Supporting new and powerful ideas

Ashoka Canada approaches venture partnerships differently. They support individuals looking to implement social change through unique ventures. Those chosen become fellows in Ashoka's global network. Executive director Andres Dussan explains. "Unlike other venture partners, we do not invest in 'for-profit' organizations with social missions. We only invest in not-for-profit social ventures. And we only support new and powerful ideas," he says."We do not expect a financial return on our investment. We give them a stipend and the fellows never need to repay it. We expect only a social return on our investment."

Ashoka's Canadian office was newly opened in 2002, but Ashoka has a robust history. The organization has been a leader in funding more than 1,200 fellows in 44 countries worldwide for 20 years. There are currently six Ashoka fellows in Canada, and Dussan hopes to expand that base by 2007. "We support two to three new social entrepreneurs every year," he says. "We are currently supporting [fellows] in BC and Ontario. But we are in the middle of a big push to get into Quebec and the northern territories." No doubt their presence will help make a difference in those regions.

These social venture partner models could represent a solution to the needs of Canadian communities. Though still primarily a western phenomenon, with Canadian SVPs taking their lead from (and often branching out of) established organizations in the American west, it's early yet and the movement may still make inroads in the east.

But at Imagine Canada, VP of corporate citizenship Sue Tomney sounds a note of caution. "Part of the challenge in Canada now is there are less people giving more, but less people giving overall," she says. "That's certainly not a trend that's sustainable."

With any luck, it's a trend that social venture partners can reverse.

Andy Levy-Ajzenkopf is a freelance writer living in Toronto. He can be reached at aajzenkopf@yahoo.com.

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