Investment Model

INVESTORS

A growing range of investors are backing Inspiring Scotland. As you would expect, there are some well-known philanthropists; there are also individual investors and business people who are getting involved in philanthropy for the first time. Grantmaking trusts and foundations and Corporates are investing and the Scottish Government is also a committed partner. The ventures we are funding will also be investing in their own work.

UNDERSTAND BASELINE OF THE ISSUE

Each issue will be independently examined, giving a clear starting point of need and a picture of what is currently being delivered and where the gaps are. This allows us to strategically manage the portfolio of organisations we support.

PROPOSALS DEVELOPED BY CHARITIES

There is an open process for charities to develop proposals.

As well as working to develop the capacity of organisations we invest in, capacity building will also take place during proposal development. This will support the development of a wider range of charities and also means we’ll understand which of the charities are best placed to fully engage with the venture philanthropy approach as opposed to traditional grant making. This means we can be sure we’re backing the right organisations and can have confidence in their delivery.

INVESTMENT

The length of investment in each charity will be 5-10 years. This is much longer than most other traditional philanthropy models and will allow significant strategic work to be delivered.

An 'Expert Group' will be set up for each issue to be tackled. Drawn from a range of backgrounds but all recognised as experts in their own areas, the strength of this group is their impartiality and breadth and depth of knowledge.

DELIVERY OF OUTCOMES

The relationship with charities will be about collaborating and working with them, promoting their ownership of the work. We have high expectations of what can and will be delivered, but won’t be taking control out of their hands.

ONGOING EVALUATION

High quality evaluation has been built in from the start, working with Evaluation Support Scotland and using their expert advice. From the time funding is committed we will be measuring the individual and collective delivery of the charities funded.

FINAL EVALUATION

From day one we will actively plan with funded charities for the period beyond our investment, working to develop their sustainability. We want the relationship to be inter-dependent rather than co-dependent or dependent. A measure of our success is how well the charities continue to deliver once our support is over, and we will help organisations to achieve financial self-sufficiency as an 'exit strategy'.

DISSEMINATION OF LEARNING

We'll be reporting progress against the outcomes we agree with each charity we fund, and any significant changes taking place within the charities themselves. We’ll also be sharing what we learn about addressing strategic social issues and the impact this is having on people in communities across Scotland.

Venture philanthropy is an approach to charitable giving that applies venture capital principles, such as long-term investment and tailored development support, to the voluntary sector. This is a relatively new approach to addressing social issues, which brings new money into the voluntary sector and follows the principles of:

  • High engagement - we will actively participate in helping organisations to succeed.
  • Long term sustained support and investment, both financial and non-financial.
  • Funding the general operations (core costs) of voluntary organisations as well as delivery of their services.
  • Organisational capacity building, including funding charities to grow the scale of their operations.
  • Defining clear, measurable social benefits.
  • Rigorous evaluation and performance measurement.
  • Holding organisations accountable for results and reward success.
  • Sharing successes and failures openly

Our model is simple; we raise philanthropic funding and invest it in a selected portfolio of charitable ventures. Rigorous performance monitoring ensures we achieve maximum return, just like any commercial investment fund.

All the work will be around particular themes – we are tackling issues to change the social landscape. Work will be funded around these issues as opposed to funding work regardless of its focus.

The first challenge that we have chosen to tackle is the significant number of young people who struggle to make a successful transition into adulthood, and as a result end up in a situation where they are neither working nor learning. Significant funding will be delivered over a 7-10 year period, with investment targeted at the areas of greatest need.