This is the second edition of a working paper that was first published in 2008. It is intended to capture and share the learning of a number of pioneer European venture philanthropy (VP) organisations, which were set up in the period from 2000-2004, when the VP “movement” first began in Europe. Its goal is to assist start-up or early-stage VP organisations (VPOs) in Europe by providing an insight into ‘what works’ in a European context, keeping in mind the diversity existing at individual country level. At the end of the document, there is a glossary that provides definitions of the key terms mentioned in the report.

This new edition takes into account the enhanced experience of existing VPOs, the emergence of new VPOs or new financing instruments and finally the material changes in the financial and economic climates in Europe and around the globe in the past years.

Specifically, it highlights the following:

  • The emergence of two interlinked but separate directions within venture philanthropy: the focus on social investment (investment, in social purpose organizations, that may generate a financial return, but whose primary purpose is to generate social impact) and the provision of grants to social purpose organisations with the aim of generating social return without the prospect of financial return (grant funding). New and sophisticated financing instruments are being developed in the spectrum between and including these two approaches by new and existing players.
  • We also document further VPO experience in the spheres of managing/creating deal flow; follow-on funding; developing different vehicles; portfolio management; handling failed investments; developing  performance measurement for the investments and for VPO organisations themselves and handling exits. These new experiences are included in this new edition.
  • Material change in financial and economic climate that increases the challenges of attracting start-up funding; causes some new funders to seek a financial return; and has implications on public sector  funding

Download Full Report here: Establishing a Venture Philanthropy Organisation