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Venture Philanthropy and Network Leadership

Connecting the dots in business and charity

How can we solve social problems by applying venture capital’s approaches?
How can business leaders collaborate with stakeholders from different sectors?
How to strategically bring business acumen and resources into social organizations?

Together with Social Venture Partners (SVP), the world’s largest network of engaged donors, our center organized the event “Venture Philanthropy and Network Leadership” on March 29 to discuss these questions. Lydia Price, Professor of Marketing and Director of Center for Leadership and Responsibility at CEIBS hosted a panel discussion with Mark Holloway and Jianzhong Lu, Partner at Brunswick.

As Prof. Lydia Price addressed in the beginning, to develop responsible executives who can integrate sustainability into their organizations would be the biggest impact that CEIBS can make. Sustainability has been accepted in both academia and industry in the past decades, but both sectors are still searching for how to do it. That was why we invited SVP to share their experiences.

SVP is a Venture Philanthropy organization which uses business acumen to help social purpose organizations (SPOs) grow. Venture Philanthropy is a "social value first" kind of Impact Investing (Impact investing, defined by Monitor Groupd as "Actively placing capital in businesses and funds that generate social and/or environmental good and at least return nominal principal to the investor") . They operate as a social "venture capital" for SPOs.

In supporting SPOs, there are three most important pillars from SVP: Strengthen SPOs (Capacity building), Network Leadership and Mobilize Assets of the Community.

Primary education has been a big problem in Oregon, where Portland locates. The children poverty rate is 26%. The group of children often don't have good kindergarten education opportunity, leading to an integrating problem when they grow older. SVP Portland thus put Kindergarten education as their working priority.

Rather than engaging with the activity itself, SVP Portland first analyzed the demographic structure of the local children to identify the problems and set up respective organizations to solve the problems.

This approach can be very useful for foundations in China: in the past, I talked to several foundation project managers who complained about receiving repeated proposals to the same problem and felt the resources should be better allocated to tackle problems more strategically.

SVP Portland not only provides financial support to the SPOs,but also helps the SPOs develop their management capacity. For example, in helping Latino Network, SVP identified that the organization needed to prove its skills on finance, HR and project management. Then SVP introduced respective resources to develop Latino Network. By applying the same method in growing another SPO, Reading Results, SVP helped the organization to grow the number of students served by 455% and revenue by 425% in three years.

With its network leadership and business acumen, SVP successfully leveraged the resources from local government, social organizations and companies. In 2015, SVP invested 410 thousands dollars to mobilize more than 3.8 millions dollars and about 13,600 professional hours to develop the SPOs. The ability to leverage resources serves as a best practice not only for social entrepreneurial activities, but also for commercial businesses.

CSR, social entrepreneurship, impact investing...Many new terminologies were born in recent years, by the end of the day, it is the outcome and problems solved that counts, no matter the solution comes from business or non-profit. It is becoming a trend that both commercial and social sectors are touching each other recently.

Like people, organizations may need both good heart and smart mind to solve problems.

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