Social Ventures / Social Entrepreneurs


I have been wanting to write a review of Philanthrocapitalism for a while. But on speed reading through it in the last couple of days I started to question the immediate relevance for us in Australia.

Yes, there are interesting chapters on Andrew Carnegie, Ted Turner and his billion dollar gift to the UN, Bill Gates and libraries, AIDS and malaria, Bill Clinton and his advocacy of philanthropy, “celanthropists” – think Angelina Jolie as an advocate for child refugees, Madonna and her illfated Raising Malawi exercise and the ubiquitous Bono, as well as the divergence of opinion between ebay founder Pierre Omidyar and Grameen Bank’s founder Muhammad Yunus as to whether microfinance should be run for profit or not for profit.

But the book doesn’t refer at all to what is happening here. The only examples outside the US are in the UK and Latin America – which makes me ask – does philanthrocapitalism exist in Australia? That is, are successful business people applying their business models and practise to philanthropy? Should they be doing this?

This question led me to think about who might even qualify as an innovative business person involved in philanthropy – as opposed to a person or family who has set up a foundation based on wealth and dutifully grants out the minimum required 80% of the income on investments (currently under review for public ancillary funds) or 5% of net assets for private ancillary funds each year.

Dick Smith and Andrew Twiggy Forrest came to mind. Now bear in mind I am a blogger and not an academic researcher, so my method of having a little bit of a look into the kinds of philanthropy they are involved in involves a relatively quick google search. Dick Smith gained some notoriety at the end of last year while encouraging “greedy bank managers” to give more to charity, but I don’t quite see any clear strategy or “capitalism” in his philanthropy. While Twiggy has admitted to being quite influenced by Bill and Melinda Gates – he still seems to be just giving funds away rather than applying his own business model to his philanthropy.

Suddenly Social Ventures Australia (SVA) came to mind. SVA does approach philanthropy in a different way. SVA’s model for philanthropy is about considering support as a social investment, rather than a gift, with a particular emphasis on supporting organisations and projects which can be replicated on scale across the country. SVA is a kind of sophisticated donor circle, which pools funds raised and focuses on a small number of recipient organisations at any one time.

SVA even supports a School for Social Entrepreneurs for people with ideas to learn how “to enhance the effectiveness of Australia’s social entrepreneurs and their social ventures”.

These graduates will be our philanthrocapitalists. They find social problems which may have had charitable attempts at assisting them in the past (or may be new issues) and discover creative ways to solve them.

Perhaps philanthrocapitalism may not be as measurable here as elsewhere because there is indeed less of it, but that is not to say that people, donors, companies and foundations are not looking at strategic, thoughtful and inspired ways of giving and encouraging sustainability in the not for profit sector.

Later this week, and at an ungodly hour, I will be attending the Anglican Archbishop’s talk at BMW Edge on philanthropy, volunteering and something or other – called Better to give than Receive? The speakers are Australian of the Year (and philanthropist (not philanthrocapitalist)) Simon McKeon, Di Winkler who is working on the issue of young people in nursing homes, and Michael Traill, founder of Social Ventures Australia. I would argue that Michael is indeed a philanthrocapitalist as he has translated his business nous from his time at Macquarie Group into a model for philanthropy.

Can you suggest any other Australian philanthrocapitalists? Do you think it is important to be able to identify people as such? Isn’t being a philanthropist enough, without having to be extra smart and innovative as well? I am hoping some of these questions come up on Wednesday morning. Let me know if you want me to ask anything? I will report back.

Sharon

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About ozphilanthropy

#Philanthropy. Posts by Sharon Nathani. Consultant, blogger, speaker & committee member/grantmaker @Impact100Melb. Sometime pianist & knitter. Learning more to share with you in philanthropy studies @acpns_qutozphilanthropy through Masters in Business in Philanthropy and Not for Profit Studies. Former Executive Officer Inner North Community Foundation.
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6 Responses to Social Ventures / Social Entrepreneurs

  1. John Godfrey says:

    It would be interesting to uncover some examples of Oz philanthrocapitalists. The authors, Bishop and Green did recently pay these shores a visit under the auspices of Social Ventures Australia (SVA). SVA exists, in part, to promote ‘venture philanthropy’ (which is the old fashioned term for the neologism Bishop and Green coined for their book). It does not, in my view qualify in its own right as an example of philanthrocapitalism per se because it was funded by existing philanthropic foundations, including the Benevolent Society who remains a supporter. Nonetheless SVA are probably the best placed to answer your question. Who/where are the emerging Oz philanthrocapitalists?

    • Hey John, thanks for this – yes, the philanthrocapitalisism authors’ visit recently was for invited audiences only (see my Philanthrocapitalism preview post.

      I hadn’t quite put two and two together that they were invited out by Social Ventures Australia. I do agree that the setting up of SVA is not in itself philanthrocapitalism, but perhaps the funding models they are exploring for the projects they are working with could be, and it is great to have more vocabulary around this – I like venture philanthropy (amazing how quickly things do become old fashioned these days). Is it all a matter of semantics?

      Sharon

  2. Thanks Sharon, for a great post and John, for suggesting that SVA chime in.

    Firstly wanted to clear up that while a copy of the book ‘Philanthropcapitalism’ does sit on the SVA bookshelf, we didn’t actually auspice the authors’ visit to Australia!

    While SVA was established in 2002 on a classic ‘venture philanthropy’ model, the scope and scale of our work over the last nine years has evolved. We continue to provide both funding and strategic support to a selected portfolio of venture partners who are focused on improving education and employment opportunities for disadvantaged Australians, but in recent years have also launched a number of services focused on helping to remove the sector-wide barriers that impede social change. We also work to help the sector to build an evidence base, ensure organisations can access the talent and expertise they need to increase their impact and look at ways to improve capital flow to the sector.

    In 2009, we saw an opportunity to use our networks and the investment banking pedigree of our CEO to play a pivotal role in orchestrating a non-profit syndicate that successfully bid for and purchased 660 childcare centres from the ailing ABC Learning Centres business. Funding for this transaction comprised a medium-term loan from the Australian Government, debt financing from the NAB as well as investment by a number of private investors in a debt instrument that provided both a financial and social return. It remains the largest social finance deal in Australia and demonstrated how cross sector collaboration and the application of commercial skills and discipline can achieve positive social outcomes.

    To build on the goodwill shown through the GoodStart deal and our work in improving capital flow to the non-profit sector, SVA has established a new social finance team, to be headed up by ex-Macquarie banker, Ian Learmonth. The team’s task will be to build this new asset class in Australia and help provide additional, innovative, funding to the social sector. We’d propose that these new social finance models will play an important role in the development of ‘philanthrocapitalism’ in the future.

    Catherine

  3. John Godfrey says:

    My apologies to Catherine and SVA – it was Perpetual and University of Queensland who hosted Bishop and green on their Australian tour.

    I have just, it so happens, completed the book and think it excellent. Don’t be fooled by its title. It offers a very well rounded survey both of contemporary philanthropy and insights into the history of philanthropy. The authors describe five “golden ages” of philanthropy. of which the fifth is now. Its cast of characters are primarily British, American and contemporary Indian billionaires; and it is hard to point to Australians whom at this stage provide comparable case studies.

    A central thesis is that philanthrocapitalists have the potential to be “hyperagents” able to apply their acumen to “tipping points and bottle necks” in a pluralistic system where governments, corporations and NGOs combine to meet the world’s biggest challenges. I recommend a read of it.

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