October 30, 2017

Catalysing more and better venture philanthropy in the UK

Annual Conference 2016

In the last few months, Big Society Capital carried out some research to understand the state of the Venture Philanthropy (VP) sector in the UK, in collaboration with the European Venture Philanthropy Association (EVPA). 


The conclusion of the project was that some 60-70 organisations were investing using two or more elements of the VP approach:

- Tailored financial support;

- Non-financial support;

- Impact management/measurement.

See here a more detailed definition of VP.

However, in the UK very few organisations call this approach “VP”. The sector is rather disconnected and difficult to navigate for both social sector funders that are interested in pursuing the approach to charities and social enterprises that could benefit from such support. 

When asked through a survey what they would need to expand their venture philanthropy offering to charities and social enterprises, most cited connecting with other practitioners and learning best practices.    As a next step, a steering group has been set up, formed of 18 organisations (a mix of funders like Access, networks like the ACF, and delivery organisations such as UnLtd, Impetus PEF and Sumerian Partners) – chaired by EVPA. The purpose of this steering group is “to develop the capacity of charities and social enterprises to improve their sustainability through the delivery of more and better venture philanthropy in the UK.” A wider learning and connecting group is being set up, which in due course will be managed by the EVPA, and is allowing the 60-70 organisations mentioned above to begin connecting and partnering with each other. This work is important to EVPA who has been building the market for venture philanthropy since 2004. Earlier this year, EVPA launched a similar initiative to build the market for VP in Central & Eastern Europe. 

Building the market for venture philanthropy and social investment is also important for Big Society Capital as it will help facilitate the development of a healthy pipeline for social investment, and ties in with the development of Access’s capacity building strategy.   

What else have we learned?

Prevalence of Venture Philanthropy in the UK  

When asked “Do you consider yourself to be an organisation that invests using the VP approach?”, 42 organisations responded ‘yes’    

Harnessing enthusiasm 

29 organisations said they would be extremely likely to expand their VP offering in the next 2 years (marked 5/5) and a further 38 marked 3/5 or 4 /5. 

Based on our (full) survey results and conversations with a broad range of players in the UK, we see strong momentum around this topic.  

Venture Philanthropy in the UK 

Trust:  - A trusting relationship is key to successful VP. This is because VP is a highly engaged approach, where the venture philanthropy organisation works very closely with the front line organisation to realise the societal impact. In the absence of trust between the funder and the front line organisation, the front line organisation will not fully benefit from such an engaged approach. One long standing VP delivery organisation mentioned that this kind of high engagement support was absolutely key in being able to effectively help the front line organisation in achieving its impact. 

Lexicon: - Venture Philanthropy is rarely used as a term in the UK, even amongst venture philanthropists. Understanding of the concept is varied, with many assuming it includes only grant funding or focuses only on supporting scalable organisations. As a result, a more common way of expressing the VP approach is for funders to describe it: e.g. “we provide a long term and highly engaged approach to supporting charities and social enterprises…providing support that goes beyond just money…”

Cost vs Impact: - Pursuing a VP style approach in supporting charities and social enterprises can be expensive, usually because the funder provides more intensive support to a smaller number of enterprises. Though a common method is to provide non-financial support directly, some are also externalising it. The following table is from “A Practical Guide to Adding Value Through Non-Financial Support” by EVPA and offers a helpful look at the pros and cons: 

Blog Daniel 1


Although the term “venture philanthropy” is not yet well known in the UK, we see strong interest in pursuing the methodology. Through the VP Steering Group we are working with those already pursuing VP as well as those in various stages of developing their own VP approach. And that is the beauty of VP as a methodology – each social sector funder will apply the concept in a slightly different way. Some funders may move into VP but only practice two of the three pillars. Others will pursue all three. Some funders might decide that VP is not right for them – and that’s ok too. It’s our goal to share best practices, resources and opportunities so that funders are at least aware of the concept and hopefully begin to experiment with how to adapt it to their own needs. If we can do that, as a start, we’ve already begun to move the needle in the right direction.

Authors: Joanna Heywood (Big Society Capital), Daniel Rostrup (EVPA), Francesca Spoerry  (OnPurpose)

Kindly supported by

European Commission

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