Similar to venture capital (VC), capital in venture philanthropy (VP) is a commodity and the value addition lies in the way funders help their investees to create social impact through non-financial means. Yet, in VP, social purpose organisations do not just need to be investment ready but also impact-ready. The capacity for impact needs to be built first and funders in VP often do not know exactly what and how they can assist SPOs with non-financial means to create impact. To address this, AVPN developed in-depth expertise in capacity building and on this basis launched workshops in capacity building with funders across India and in Taiwan in November and December 2015.
Developing the capacity for capacity building
Based on our case studies and meta-analysis of key publication in the area of capacity building, we designed the one-day workshop to take funders from diagnosing capacity-building needs via structuring the delivery of capacity building to choosing an evaluative approach for the capacity building efforts. Throughout, we included ample time for discussion, plenty of case studies and relevant insights from publications. Selected AVPN members who have participated in the Knowledge Centre’s case study creation process were invited as guest speakers to share their insights first hand.
In India, we launched the workshop series in Delhi, Bangalore and Mumbai together with our partners EdelGive Foundation and Barclays and guest speakers Naghma Mulla from EdelGive Foundation, Vijaya Balaji from Toolbox Foundation, Satya Bansal from Barclays India Wealth Management and Paul Carttar from Bridgespan Group.
Here are three patterns which run across all workshops and which are critical for success.
Making the case for capacity-building
All participating funders had different stakeholders to report to. VP Fund managers reported back to limited partners, charitable foundations heads reported back to donors, endowed foundations heads reported back to trustees or giving circles managers reported back to High-Net-Worth-Individuals (HNWIs). Justifying the costs for capacity building was a universal activity and of high priority.
This was reminiscent of the starvation cycle, the overhead myth from 2013 or simply the need for treating non-profits and social businesses as businesses from 2015. We discussed how to justify the time and money spent on capacity building and what is actually acceptable. The case for capacity building becomes stronger the more funders actually build capacity and measure the results. Getting a virtuous cycle going remains difficult though.
Individual cases vs universal templates
Learning from peers is one of the key intentions of AVPN workshops. In India and Taiwan, we achieved this by sharing case studies in the abstract, bringing in guest speakers and asking participants to share their own stories. This allowed participants to grapple with different practices and find their own. Nevertheless, we often heard that the practice they were looking for was not present and that we needed more case studies to illustrate their specific situations.
Another trend was the request for templates for assessing needs, delivery and impact. Easily dismissed as ‘lazy thinking’ by one participant, this shows us that there is a need for off-the-shelf universal solutions. In this respect, we suggest a look at the new EVPA guide to Non-Financial Support, which contains a number of tools and templates. Keeping the balance between individual cases and abstract generalisation also seemed to relate to experience. Going forward, we will strive to strike a balance between off-the-shelf solutions and illustrative individual cases to help participants evolve feasible solutions regardless of experience.
Measuring the impact of capacity-building: your background influences the type of framework
The final segment of the workshop contained an introduction to measuring the impact of capacity building. This session completes the circle of the entire day by reflecting upon the initial plan for your investee and developing a way to measure it. Given different funders’ background in commercial and/or non-profit realms, they will be more familiar with performance management or social impact measurement.
For impact measurement, measuring the impact of your capacity building is different in so far as you would measure how the output, outcome of one activity or a suite of activities leads to impact. And this impact is often qualitative, sector specific and development stage specific. If you see it this way, you’d draw ideas on how to structure your system from impact measurement frameworks.
Performance measurement on the other hand measures business metrics and in the commercial realm excludes the qualitative social impact from its core measurement. If this is an approach that makes more sense to you then you could integrate social performance into the overall performance and your activity as a funder as contributing to this performance. The potential frameworks for your system widen to organisational development measurement tools and theories. Two of the latter are Leap of Reason and McKinsey’s Organisational Capacity Assessment Tool.
Getting this right allows funders learn, find the right approach for effective capacity building and make the case to their stakeholders for capacity building.
Based on these observations and the generous feedback from all participants, we will build out the workshops on capacity building and hope to run them in an area near you. If you are interested in collaboration as partner or you want to share your experience and learnings in a case study, please contact the AVPN Knowledge Centre on: [email protected].
Beyond Capacity Building, sit tight for the 2016 launches of workshops on Impact Assessment and Portfolio Management!