Paradigm Shift in Global Giving: Philanthropy and Impact Investing

  

By David Drake

Traditionally, giving a portion of one’s income to a charitable foundation is enough to say that you

have helped the poorest of the poor. Or one may opt to go directly to a community in need to

distribute goods, clothes, food items. Both ways means just giving per se. The people are left on

their own devices and nothing changes.

Today, a shift in the paradigm of giving is emerging. This means that giving does not end with the

transfer of money or goods. Rather, people that give want to see the impact on the lives of families

and communities that receive, sharing their wealth so that people will gain more than just money,

but a way of life.

 

Philanthropy, Impact Investing and Crowdfunding

Philanthropy and impact investing are the backbones of crowdfunding. The internet and the online

crowdfunding platforms on giving have magnified the ways and means to reach anyone from all

over the world, both those who need financial and livelihood assistance as well as those who want

to send their aid and seed fund in a fast and effective way. The offline advocates of a cause or

social enterprise have to take their support online to serve as the water that will prime the pump of

giving.

Held in the City of Berlin, the 10th Annual European Venture Philanthropy Association (EVPA)

Conference brought together more than 500 attendees — social investors, venture philanthropists,

academics and other supporting organisations from across Europe and around the world and

discussed collaborations for social impact in the next 10 years.

To EVPA, venture philanthropy is an approach to build stable investee organizations with a societal

purpose by giving them monetary and non-monetary supports to impact society. The approach

uses social investment and high engagement grant making.

Philanthropy is giving to people who needed them most, but unlike charity, with the aim to uplift

their capacity to live with dignity — able to provide for their basic needs and more. Venture

philanthropy upgraded it to another level, where the financial and non-financial support impact to

the community.

The conference melded together the possibilities in upping philanthropy and impact investing and

in reaching beyond the accredited investors as well as high-net worth individuals and families.

Reaching beyond the rich individuals and families for sources of philanthropy funds is now possible

for the individuals into social networking are in staggering numbers. Around 110 billion minutes are

spent around the world on social networks and blog sites per month, which is equal to 22 percent

of time spent online. Thus, these online people can be potential sources of philanthropy funds

through crowdfunding. Thus, people across the globe can be engaged in collaborative endeavors

for philanthropy and impact investing.

EVPA Chairman Pieter Oostlander opened the conference. Afterwards, Director of Open Society

Initiative for Europe Jordi Vaquer reflected on the past 10 years of EVPA. Essentials of venture

philanthropy, raising capital and the challenges posed by its ecosystem are among the topics

discussed in the conference. The next 10 year of collaboration for social impact and venture

philanthropy as well the role of research on building stronger impact were also discussed.

The conference was organized by EVPA, an association of organizations that are either practising or

are interested in social investing and venture philanthropy throughout Europe. According to EVPA’s

CEO Kurt Peleman, venture philanthropy has to do with monitoring performance and impact as well

as finding long-term monetary and non-monetary support.

Ms. Hedda Pahlson-Moller, Member of EBAN Board of Directors and Impact Investment Committee

Member, says “The conference was a great success — a special opportunity to celebrate EVPA’s 10

year anniversary and the important developments in the field of Venture Philanthropy. Over 500

participants joined together to share knowledge, learnings and set goals for the next 10 years. The

future of investing and philanthropy lies in Venture Philanthropy, and we are very excited about

the years ahead and collaborating with new partners to drive this space forward. “

Results of the EVPA 2013/2014 survey on venture philanthropy and social investments showed that

over 5 billion euros have been invested since the start. The average financial support per Venture

Philanthropy Organization (VPO) increased by 28 percent to 8 million euros from fiscal year 2012 to

2013.

The non-financial support is only 6.5 percent of total spend on aggregate for fiscal year 2013.

During the fiscal year 2013, VP / SI organizations support economic and social development (22

percent), education (14 percent), research (14 percent), health (13 percent) and culture and

recreation (9 percent). These top five sectors comprised 71 percent of total spend in fiscal year

2013.

The main beneficiaries of VP/SI investments are: children and youth (62 percent), people in poverty

(36 percent, unemployed people (21 percent), disabled individuals (19 percent) and women (17

percent). For more research highlights, visit http://evpa.eu.com/

 

 

Note: This article appeared on The SohoLoft with this linkhttp://thesoholoft.com/paradigm-shift-in-

global-giving-philanthropy-and-impact-investing-by-david-drake/ on Jan 15, 2015. 

Photo credit to marsdd.com

 

 

David Drake is an early-stage equity expert and the founder and chairman of New York-

based Victoria Global with divisions   LDJ Capital , a family office and private equity advisory firm,

and The Soho Loft Media Group – The Voice of Capital Formation – a global financial media

company involved in Corporate Communications, Publications, and Conferences. You can reach him

directly at David@LDJCapital.com.