Venture philanthropists seeking to make strong social impact in Africa have affirmed their desire to help the continent’s business and political leaders channel their resources more effectively to solve the problems of youth unemployment, underperforming educational system, infrastructure decay, and other social issues.
Doug Miller, founding chairman of European Venture Philantropy Association (EVPA), and Paul Carttar, founding director of the US social innovation fund (US SIF), have teamed up with other innovative philanthropists to offer their over 15 decades of combined experience in creating social and financial value around the world to Africa. This will help the continent to channel its financial, human and intellectual capital to make increased social impact.
Speaking at a cocktail organised by the African Capital Alliance (ACA) to honour Miller and Carttar, Dick Kramer, Chairman, ACA, said that the two foremost global venture philanthropists do not seek to replace the various charity works that are being done in each country in the continent.
With the theme, ‘Developing an African Venture Philanthropy Association’, the cocktail was organised to discuss the potential for creating an Africa-based membership organisation to advance venture philanthropy and social investment in Africa.
“It is helping us do it the right way, and mobilise local and international resources behind us,” Kramer said at the cocktail held in Wheatbaker Hotel, Ikoyi, Lagos. “Their main job is to help us do it and do it successfully.”
Venture philanthropy is a model that applies business principles to the social sector to obtain stable funding, build capacity and partnerships in social enterprises and other social purpose (philanthropic) organisations, with the objective to help these organisations to tackle social issues more effectively.
Miller said that venture philanthropy is about helping others to help themselves. He said that his team of venture philanthropists have deployed the model to Europe and Asia with measurable and observable results; the team launched a separate initiative in India in November (2016).
“It is not something that is new as we have successfully done it in 49 countries. We are acting as a catalyst, as a facilitator, and as an enabler for people here to do it.”
Venture philanthropy emphasises measurable outcomes in social investments.
Miller said that venture philanthropy will help to tackle, in a more efficient way, such societal issues as poverty, illiteracy, unemployment, poor health care delivery, corruption in government, inadequate security, and so forth.
“We are acting as a catalyst, as a facilitator and as an enabler for people here to do it. Our model is that if you have the ‘want to’ then we can help with the ‘how to’”.
Paul Carttar said that the disciplined investment process could be applied to a lot of different targets as all the business models can be categorised into 5 broad economic entities according to their revenue models. These entities are: non-profit (grant dependent), social enterprise (more impact, 50% -100% trading revenue), social enterprise (some impact, profitable), business (with clear social impact goals), and business (mainstream company).
“Venture philanthropy is about applying the same business discipline (of due diligence, strategic thinking, clear planning, accountability, etc) to investments intended not to generate financial returns exclusively, but also social return.
Carttar said that venture philanthropy is crucial for Nigeria and Africa for two reasons.
“First, traditional approaches to applying money to generate social impact are currently under stress. Government budgets everywhere are being stretched; aid budgets are being stressed; governments are prioritising domestically leading to international aids becoming less available. And a lot of these efforts have never been proven to be effective in the first place,” Carttar said.
“Second, there has been innovation explosion – smart ambitious people using their talents to find new ways to solve problems. These have been implemented in Africa, United States, Asia, and other regions.”
Donald Trump, United States president, has been widely reported to have initiated plans to significantly reduce funding to the United Nation (UN) and its agencies. Bulk of the aids to Nigerian and other African countries come from the UN bodies.
Carttar said that private leaders are growing increasingly ready to drive change with more governments appreciating private-led social investment initiatives.
Rob Wilson MP, United Kingdom’s (UK’s) Minister for Civil Society, said in a foreword to ‘Social investment: a force for social change 2016 strategy’, a document of the UK government, that social investment (venture philanthropy) signifies a transformation in the way that public services are delivered, presenting a huge opportunity for more people to use their savings and investments to change lives for the better.
“Social investment can accelerate the growth of new businesses, transforming the impact of our public services, and support stronger communities to tackle the social challenges that they face,” Wilson said.
“It has the power to transform lives and I am more committed than ever to helping social investment achieve its full potential”.
Carttar said that the team wants to do in Africa will be modelled after the EVPA, headquartered in Brussels with 15 members of staff, and the Asian Venture Philanthropy Network (AVPN) with headquarters in Singapore manned by 9 members of staff.
He told audience at the cocktail presentation that the EVPA and AVPN have established knowledge centres that have been beneficial to members.
EVPA and AVPN members have invested an aggregate of 5 billion Euros and 2 billion Euros through partnerships with Impetus-PEF (UK), Central Square Foundation (India), and Social Venture (Hong Kong). EVPA has grown, with membership increasing from 13 in 2005 to 222 in 2016; AVPN has grown from a membership of 105 in 2012 to 316 in 2016.
Carttar said that they have conducted due diligence on the continent, which shows potentials for success. He said that he expects the African Venture philanthropy association to mirror the membership growth experience of EVPA and AVPN.