CandleFocus

Venture Philanthropy

Candlefocus Editor
Venture philanthropy is an increasingly popular practice in the investment world, where the resources of venture capitalists are customarily used to promote more philanthropic goals. The traditional venture capital model of investing focuses on stimulating economic development through investments in potentially profitable projects, while venture philanthropy draws on a capitalistic impulse to take on risks, reward innovation, and bring about lasting social change for all members of society; particularly underserved, underprivileged, or otherwise socially vulnerable groups.

Venture philanthropy lays the groundwork for long-term social and environmental change by aligning values with mission, managing risks, and tackling difficult problems through creative and enterprising solutions. Venture philanthropists take a consciously investigative and experimental approach to their investments, taking calculated risks whenever necessary and assessing the quality of their investments over extended periods of time. This can include grant funding, venture building, coalition building, and impact investing.

In a venture philanthropy model, the non-profit and for-profit organizations look for ways to create a mutually beneficial partnership. Jointly, they work together to generate financial returns that can be reinvested in projects that further their common goals. All projects are evaluated, monitored, and improvised continuously. The venture philanthropist and their partners collaborate, mentor, and challenge one another to optimize both their return on investments and their social impact.

The combination of knowledge, resources and risk-taking, which characterize the venture capital world, can be effectively deployed in the philanthropic pursuit of social change. In doing so, venture philanthropists have the potential to do far-reaching and lasting good. Through the expertise and access to resources, they can create maximum social impact while listening to and understanding the needs of their partners and the local communities they help.

Glossary Index