Photo by EVPA
Clara de Bienassis and Sophie Robin, both partners at Stone Soup Consulting, recently attended the annual European Venture Philantropy Association conference, of which Stone Soup Consulting is a member, in Casa de America, an old and elegant place at the very heart of Madrid.
As usual, the event was a success with 500 people attending and more in the waiting-list. Unfortunately as it seems, many important Spanish players of the philanthropic sector did not attend the conference, showing that -despite the important and regular increase of members of the association- there is still an important number of organisations implementing philanthropy in a more classical, less hands-on approach. At least, that is the first reason that comes to mind.
Despite these noted absences, the event was a perfect place to showcase the incredible rise of the venture philanthropic world in Southern Europe. And here is another interesting tendency: in this event, the world "venture philanthropy" was largely overtaken by that of "impact investment". Indeed, in Spain and in other countries, it seems that both concepts are converging in such a way that some new comers even find it difficult to differentiate them.
Impact with a social investment philosophy
In impact investment, which used to be balanced between impact-only (grant type, no return expected) to impact first (with or without expected returns), the latter is clearly now dominating the space. Again, the young and fast growing Spanish industry is a reflection of that: of the 18 members, around 10% are philanthropic entities with a donations-based philosophy, whilst around 30% are or include a social investment philosophy.
An interesting trend, which will probably get stronger over the next few years given the European Investment Fund and the European Commission push for it, is the interest of impact investors currently acting mainly in their own country to grow outside their traditional frontiers. That will mean that new collaborative patterns will emerge with cross-cultural investments in social enterprises, which might lead to more expansion of the impact of social enterprises outside their natural playground.
In any case, this transeuropean collaborative element might be something the EVPA conference would like to reflect on in the future. In fact, in general, a reflection about how to collaborate between several funds to achieve greater impact seems to be largely absent of the discussions. Some panels recognised the need for collaboration in general, but no examples have been displayed on strategic alignment of two funds intervening on a specific topic in a particular country, in order to maximise the value of their intervention. After all, investors return is one thing, but seeking greater impact should be at the heart of the strategy and hence drive investors to collaborate in order to achieve this. Collaboration should not be about co-investing only, but also about aligning investment strategies. Collaborative or collective impact is the only way to tackle the complexity of social challenges.
Take, for instance, this great documentary that was presented at EVPA's conference about a Nigerian venture - We Cyclers - improving communities' quality of living by incentivising them to recycle (See the full video story). The fact that families have improved their wages to let their kids go to school should/could be combined by the replication there by Bridge International Academies which seeks to give these kids high level education for a relatively small cost. And so on. The idea being that the virtuous cycle doesn’t stop at one point because of yet another obstacle, be it social, infrastructural, economical or environmental.
Again, there are probably many things that are done in a collaborative manner; we just missed not hearing about them at this EVPA conference, which showcased individual experiences of several venture philanthropists. And therefore we look forward to these insights in the next one.
Photo by EVPA
Lessons learnt from failure
One of the panels that we most liked was the one around failure. It is not the first year EVPA organises a session on experiences that didn’t work as expected. In fact, I remember attending the one in Geneva two years ago which attracted so many people that even EVPA staff was surprised of this success around failure!! Even if they don't like much to report their own, people and organisations are eager to listen and learn from failure, because of course, it is how we tend to grow, mature and improve. So we applaud EVPA’s initiative (their interesting findings on failure on venture philanthropy and impact investment can be read here). As Stone Soup Consulting we are also looking forward to publishing our own impact report, which we are currently working on, and expect it to be an honest account of what we achieved, from the goals set by our theory of change, and where we could still improve. We liked Caroline Fiennes mention of an "honest report" instead of an "impact report", which well reflects our philosophy. We are thinking of borrowing her words to refer to our own evaluation process.
Speaking about honesty, we also appreciated Antonio Miguel's pragmatic approach to implementing social impact bonds or SIBs in Southern Europe. Portuguese have a very interesting case to present to other countries where data is not really available to convince stakeholders about the benefits of social impact in terms of savings. They suggest working around the concept of innovation rather than savings. That might help some of the hundreds of SIBs in preparation all over the worlds (from only 52 today!), many in countries similar to Portugal, to overcome barriers to implementation of SIBs.
The reflection around impact
Another challenge facing social impact bonds, that is shared by all other programmes and projects of venture philanthropists and impact investors is the reflection around impact. Every year now, EVPA dedicates at least one session to impact, and the same questions seem to be popping up: is there a cost-efficient way to gather reliable evidence from the field? How can we present data so that it makes sense to our board but is meaningful to the organisations we support? Fortunately, the debate around customisation versus standardisation is now coming to an end, most people recognising that only bottom up approach really makes sense and that some kind of standardisation might come up if it is sector-based and comes from the analysis of concrete impacts on the ground. At global level, the now accepted good practice is around processes, described first by the EVPA, and mostly adopted by the EU and the G8.
Interesting though is the mention again in that context, of the difficulty of sharing to create common ground and improve collective learning.
We also appreciated the interesting insights about non-financial support. How can your money make a true and lasting difference?. That should be the question each investor should ask himself when financing a project. Indeed many overbusy social entrepreneurs need and ask for more support…some complain if they receive only cash as then feel they might not spend it wisely enough because of lack of preparation! That is why investors tend to be more innovative about non-financial support and to work in a more collaborative way with their investees. Probono strategy, legal or communication advice can be really helpful for entrepreneurs, as well as the integration of an experienced person in the board of the social venture. Network with peers is also essential, social entrepreneurs are full of ideas and experiences (good or bad) that can be extremely relevant for others starting a business. Pity non-financial support only represents 6,5% of their overall investment budget, as the EVPA found out…
There would be much more to say, because EVPA is one of the few conference where we actually feel we are learning all the time, and we indeed learnt a lot in every panel, and discussing with the wide array of European stakeholders who participate in it. We liked the speedating sessions a lot! (Maybe next time we get a couple of them?)
Surely, for that and many other reasons, we will be in Paris next year to carry on sharing, learning and connecting!
By Sophie Robin, partner at Stone Soup Consulting.
Within Stone Soup Consulting, Sophie has been specializing on scaling-up strategy of social initiatives, as well as on social impact, advising social entrepreneurs and Venture Philanthropy (VP) organizations on how to measure, monitor and report on their social impact. She has lectured on the topic at the ESADE business school and the Open University of Catalunya (UOC). Sophie Robin also sits on the Advisory Board of Grup33 – a Catalan based NGO which aims at promoting a therapeutic- based prison model, as a strategy to reduce re-offending.
Before co-founding Stone Soup Consulting, Sophie Robin worked for the Food and Agriculture Organisation of the United Nations as the Liaison Officer with Civil Society Organisations for Latin America and the Caribbean. She has also worked for several NGOs and served as CEO for the Portuguese NGDO Platform.