The Power of Venture Philanthropy to Drive Social Change

Paweł Oksanowicz interviews Loïc Comolli, Co-CEO NESsT

This interview was originally published in the “Benefactor of the Year” report available in Polish here. The “Benefactor of the Year” Competition promotes philanthropy and social involvement of companies. It promotes examples of CSR and charity engagement of corporations and awards those who help solve local problems as well as contribute in a significant way to introducing permanent changes to their communities.

In 2017, the Academy for the Development of Philanthropy in Poland organized the Competition for the 20th time, where NESsT Co-CEO Loïc Comolli was a speaker.  For more information.

Is Venture Philanthropy (VP) for those who have already succeeded in business and want to tackle something else, for example something “more light”?

VP is for individuals who are passionate about leveraging private sector approaches to achieve scalable social impact. Venture philanthropists identify a social problem that is deeply personal to them, and they make a commitment to supporting solutions that will significantly address the problem. The strategies of venture philanthropy combine financial investments in social-change organizations with additional capacity-building, mentoring, or management to help organizations in meeting their goals.

Is Return on Equity (ROE) of funds and companies investing in Social Investment (SI) models an important indicator for investors? Maybe they are different, more important?

VP is recognized for its emphasis on performance and accountability. Recognizing that impact is difficult to measure, venture philanthropists establish mutually agreed-upon benchmarks and metrics with their grantees for monitoring progress. Venture philanthropists treat both financial and social returns as equally important since both are important for measuring success.

What are the main benefits for VP investors?

Some individuals feel that VP is a more effective model since they can closely participate in the organization’s work. In addition to giving financial support, venture philanthropists enjoy the substantive partnership that comes with making their professional skills and network of contacts available to organizations. For example, venture philanthropists get involved as volunteers, providing their business expertise and coaching. They may serve on as board member to assist with overall organizational development.

Please give examples of companies from the USA or Central and Eastern Europe (CEE) with social mission that evolved through the VP model.

In Poland, the organization Siedlisko, based in Kolonowskie, manages a nursing home to provide full-time care for the elderly and people with chronic illnesses, as well as catering and a laundry service for local companies. Siedlisko trains and employs at-risk youth and long-term unemployed people to operate its services. For many of the employees, Siedlisko provides the first opportunity for formal employment and sustainable income.

For the past three years, NESsT has leveraged is venture philanthropy approach to assist Siedlisko in growing its business and impact. NESsT has provided funding for the organization to invest in equipment and infrastructure to expand its operations, as well as business assistance to identify new business opportunities and generate more sales. To date, Siedlisko has improved the lives of more than 300 marginalized individuals.

What should be the role of the state in supporting the VP?

On the supply side of VP, specifically the VP investors, the state can foster a legal framework to encourage philanthropy to develop more quickly. The state can also support funding vehicles that bring more patient capital to social-change organizations, and de-risk investments for VP investors.

On the demand side, specifically the social-impact organizations, the state can design legal structures that facilitate organizations to raise capital from a diverse set of funders. The state can also support accelerator and incubator programs that provide technical assistance to early-stage social-change organizations and prepare them for venture philanthropy.

What are the chances of success of the Venture Philanthropy in Emerging Markets, such as CEE?

VP has already succeeded in a number of emerging markets. For example, the Asia Venture Philanthropy Network is a thriving ecosystem of VP organizations that promote entrepreneurial approaches to social impact. The Venture Philanthropy Africa is an impact investment network to promote venture philanthropy in Africa, in a bid to aid charities efforts to become self-sustaining social enterprises in the long-term.

In Poland and CEE, the European Venture Philanthropy Association, together with its CEE-based members such as NESsT and Valores, have made great strides in promoting VP across the region. Hundreds of CEE business professionals use VP to support social-change organizations. Annually, NESsT awards the Venture Philanthropy Award to a member of the CEE business community to recognize their contribution to the field.

What arguments we should use to promote VP / SI in Poland and other countries in the region?

VP is one of many approaches to philanthropy, depending on the personal or strategic goals of the individual. VP represents a significant opportunity to move philanthropists from project-based to organizational support. Venture philanthropists recognize the value of building overall capacity in order to advance impact goals more effectively or on a larger scale. That is the best way to achieve long-term sustainable impact.