MVCA believes in the intrinsic and long term values of applying venture capital skills to charitable and socially relevant activities.

  

As the terms social venturing and venture philanthropy are used interchangeably, we will apply venture philanthropy (VP) in the wide sense of the word.

 

VP goes beyond the financing of the original do-good idea. It seeks to build long term, sustainable success by developing excellent teams, leadership, creative thinking, partnerships, efficient use of resources and so forth. It puts monitoring systems in place and contributes (some more actively than others) to the attainment of the goals by offering those skills that may in the beginning be lacking.

 

Within venture philanthropy, strategies are reviewed based on results and adapted where necessary, unlike some charitable organizations which find it difficult to move away from the original (failing) plan which the donor sought to finance.

 

VP is getting increasing attention from donors who become more and more critical of where their money goes and what the impact is. Donors want to see results and many of them want to be engaged either front line or behind the scenes. The funding is based on output with clear terms and conditions, comparable to a term sheet between venture capital investors and a company.

 

Another (maybe even more) important dimension of VP is that the donor does not hand down his donation, but he elevates the recipient of funds to an equal partner. More and more donors become aware that this psychological component is enormously important. Professional funding (micro-credits are an example) empowers the individual who then also acts as a role model. The funding of the program is an expression of confidence; the achievement of the goals gives the funded party self-reliance and dignity.

 

This sense of autonomy plays an important role in VP’s aim to create sustainable activities. Sustainability often fails because of a lack of skills and engagement once the flow of aid has run dry. VP incorporates long term independence in its original vision which includes the transfer of knowledge and management skills.

 

MVCA is developing its venture philanthropy centre together with its members who are active both in financing and philanthropic activity. A number of events will be dedicated to VP and resources will be mobilized to contribute to those activities where venture philanthropy makes most sense.