Venture Philanthropy: Boldly going forward

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Once the new kid on the block, venture philanthropy has grown into its own in the past decade. The urge by young and emerging entrepreneurs to spur social change and increase capacity in the charitable sector while still making a profit may have started off small, but it's gaining a lot of credence.

And Canadian organizations are helping the tide along.

From humble beginnings

According to Jason Mogus, CEO of a for-profit, Internet strategy and development firm called Communicopia that supports organizations "working for sustainability and social change," the landscape has definitely changed.

"Five years ago, Renewal Partners was the only established (five years old at the time) group in Canada doing this work. BC Social Venture Partners (SVP) and Calgary SVP were just getting started, and Social Capital Partners in Toronto were also just getting going," says Mogus, who is on the board of BC SVP and currently serves as Chair of Philanthropic Innovation for the organization.

"No one knew about the [venture philanthropy] model. I was reading about it happening in Seattle and Silicon Valley, where many great ideas start, but not much here. Today, as you know, all four groups mentioned are much more established and more people are doing 'engaged philanthropy,' from big names like Bill Gates and Warren Buffet, to Richard Branson, who I work with," he states.

And the appeal of the venture philanthropy ethos, as Mogus sees it, is what has kept the model from falling out of favour with businesspeople of his generation.

"The biggest idea in venture philanthropy is that the volunteer actually has direct skills and experience with running an organization," Mogus explains. "Most foundation grantmakers are very smart on social change, but few have had direct experience founding or managing an enterprise. What BC SVP does is we are all successful [business] entrepreneurs and when we combine with social entrepreneurs, we can offer a unique experience base on things like reading spreadsheets, managing staff, business development, business planning, marketing plans, and more. You can only teach what you truly know, and the best impacts come from sharing something that you have truly mastered."

That said, there are voices in the voluntary sector that tend to view the trend with some wariness.

Slow and steady wins the race

In Montreal, Hilary Pearson, president and CEO of Philanthropic Foundations Canada (PFC) takes a more cautionary approach to the venture philanthropy phenomenon.

"From my perspective of foundation philanthropy, I am not seeing a more significant number of foundations committed to a social investor/venture philanthropy approach, although there is much greater interest in rigorously setting and assessing specific or measurable outcomes from charitable investments [grants or program spending]," she explains.

Pearson categorizes the PFC's current approach to venture philanthropy as "typically prudent and skeptical, taking some of the useful concepts of venture philanthropy but not throwing ourselves wholeheartedly into a venture approach."

However, she singles out a number of organizations who have "taken the lead" on social entrepreneurship in the country, naming Ashoka Canada, Tides Canada Foundation and the McConnell Foundation as prime examples of established funders who have taken steps to actively support social entrepreneurs and/or venture philanthropists.

Take the following snippet from the McConnell Foundation's website on social innovation under their "what we've learned" section. Based on a study the foundation conducted in 2005, it "has come to appreciate better the importance of innovation, the exploring of new and effective ways of addressing intractable social problems." The foundation then broke down the necessary phases to implement innovative social change. And what was the very first phase? To quote directly again from their site: "In phase one, a social entrepreneur or group of entrepreneurs either inside or outside the voluntary sector will see an opening for a new program, knowledge and skills, process or concept that they think will address a persistent problem. The confidence to act on this opportunity requires leadership and vision."

Venturing far off (or on) course

However, Pearson raises a cautionary tone again on the matter, telling CharityVillage that even the most thoughtful of foundation philanthropists "tend to be skeptical of...the notion that there is a point in time when measurable value can be captured and a return on social investment pinpointed."

"Social change, unlike technological change, is incremental and difficult to associate with specific individuals or investments. Nor are its benefits segregated or limited to certain domains that can be protected by patent or license," she states. "Social capital should be freely shared. Unlike most private investors, social investors are passionate about open sourcing and knowledge dissemination. This, frankly, makes it difficult sometimes for foundation boards to sign off on projects that call for deep and long investment."

Unsurprisingly, venture philanthropists like Mogus view the model with much less trepidation and see a new era of social change being zealously spearheaded by the venture philanthropy and social entrepreneurial models. In his opinion, the old methods of giving are growing less appealing to many of his ilk.

Today, he says "there is more interest in engaged models of giving back. People don't want to just write cheques to an NGO that tells heartwarming stories. They want to know the real deal: real stories, real challenges, real impact. They want to roll up their sleeves and offer useful skills and make a real difference."

And with companies like Mogus' Communicopia populating an ever-expanding and increasingly Internet-dependent, globalized world community, venture philanthropy today is getting a healthy digital boost.

Canadians engineering change online

Mogus insists that the web has helped bring venture philanthropy out into the open by empowering those who can connect their causes to the hearts and minds of likeminded individuals.

"It's created significantly more transparency into the previously obscure work of social change organizations," he says. "Those who tell great stories attract more supporters. Those that quietly do their work but don't tell anyone about it generally have trouble gaining new supporters."

But Mogus cautions that venture philanthropists and their organizations need to remember that certain values must always be present for their message to be received. These are the same values that any good netizen upholds, namely transparency, collaboration and participation.

"You need to have an open culture, be truly good at working with others, and get excited about asking for help - meaningful help, that others can provide," Mogus counsels. "If you don't have that kind of culture you won't realize the incredible benefits that the web and networks of self-organized people can offer in support of your work."

To that end, Mogus also runs a website called Webofchange.org, which he says is an online community created for venture philanthropists and social entrepreneurs. "It's had a big impact on capacity building in the sector by convening a community of practitioners, sharing stories and knowledge, and inspiring people that there are others who share their values and can help them with their work."

Get talking

Feeding off of the above expertise, the best advice for young and new social entrepreneurs and venture philanthropists, is to research like crazy and speak to as many people and organizations as you can before embarking on any important social endeavours. As the saying goes, information is power. And in this case, it could be the power to effect tremendous societal change.

A last consideration

In 2003, the Canadian Centre for Social Entrepreneurship (CCSE) at the University of Alberta put out a paper titled The Changing Corporate Landscape and Its Effect on Charitable Giving (PDF). Though slightly dated, it's an engaging study on how funding for venture philanthropy is being affected by globalization and foreign ownership of domestic corporations.

Top 5 ways of successfully pushing your social brand (courtesy of Communicopia)

  1. Actively listen to your constituencies.
  2. Gear up to respond to clients’ ideas.
  3. Lend support to clients to bring the brand into their communities.
  4. Tell real stories about your organization or product, not just "polished" ones.
  5. Don’t worry about losing full control over your idea.

Andy Levy-Ajzenkopf is president of WordLaunch professional writing services in Toronto. He can be reached at andy@wordlaunch.com.

Please note: While we ensure that all links and e-mail addresses are accurate at their publishing date, the quick-changing nature of the web means that some links to other web sites and e-mail addresses may no longer be accurate.

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