Impetus champions venture philanthropy
Impetus Trust, a venture philanthropy organisation which counts some of the private equity community’s biggest names amongst its donors, has produced a report into its activities which vindicates the application of a private equity model to investments in charitable initiatives.
Impetus said charities it backs have increased their social impact – the number of people helped - by 66% per annum.
Impetus Trust offers venture philanthropy in the UK by providing money and expertise for charities and social enterprises.
The Trust said in its second Impact Report that it has delivered an additional £6 in value for every £1 donated through co-investment from private equity backers and the provision of pro-bono expertise to help in the running of charities.
Turnover at its portfolio companies rose 23% which it said was six times greater than the charitable sector average, based on National Council of Voluntary Organisations figures. Revenues across the portfolio increased to £18m (€23m).
Impetus conducts in depth due diligence before selecting charities to back and only chooses those with growth potential. It adopts a private equity approach of "high engagement and rigorous measurement of performance" over a defined period of time, usually three to five years.
Daniela Barone Soares, chief executive of Impetus, said: “Our model of venture philanthropy, based on providing strategic funding combined with expertise, is helping g to build strong organisations. The nature of our engagement enables these organisations to “leap” to a completely new level of influence, impact and robustness over three to five years. They are then on a growth trajectory, with cost effective delivery models and diversified funding mix.”
Charities backed by Impetus included Speaking Up which provides training and support for disabled people and has supported 94% more people on average over the period of investment, and St Giles Trust, which helps to reduce re-offending. St Giles Trust has helped 109% more people year on year since investment, while its income has grown 37% a year.
Impetus donors include Jon Moulton, founder of Alchemy Partners, Apax Partners founder Sir Ronald Cohen, HgCapital chairman Ian Armitage, Coller Capital founder Jeremy Coller and industry trade body the British Private Equity and Venture Capital Association.
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