Philanthropy is a broad field covering an array of topics in an even greater pool of categories. To further complicate the matter, new philanthropic trends have resulted in specific branches where there previously were none. These delineations tend to go beyond writing anonymous checks to whichever organization requests funding and expand into a realm where donors expect proof that their contribution will help to solve relevant issues. Examples include angel philanthropy, impact philanthropy, enterprise philanthropy, and catalytic philanthropy.
Each of the above examples works to accomplish a particular goal in a strategic manner. Venture philanthropy is the term used to describe the targeted nature of philanthropic branches. Charitable avenues that fall under the venture philanthropy category are required to have more purpose and should be driven by responsibility and results. Not all venture philanthropy efforts are the same, but most of them encompass the following identifying characteristics.
Strategic Framing – a calculated way of allocating assets like grants or investments so that they stand the best chance of making the most impact on an entire system.
Scales of Intervention – a process that requires organizations to focus on entire sectors or systems as opposed to solitary projects or individualized efforts.
Sector Focuses – several branches of philanthropy incorporate sector focuses. Venture philanthropy tends to overlap focuses and incorporate multiple social levels including government, markets, and civil society.
Blended Funding Mechanisms – A strategic mix of grants and investments that varies by cause but is dictated by the theory of change.
Extended Interactions – a direct, hands-on approach to engagement both with and among grantees.
Long Engagement Periods – lengthened campaign timelines that account for the amount of time it takes to change an entire system as opposed to a single aspect of said system.
Impact Measurement – continuous monitoring of progress and its effect on the overall impact on the final goal, with the ability to adapt should an effort be proven unworthy.
Branches of venture philanthropy are also said to operate within a culture that better reflects their goals. They are more experimental and innovative, and foster capabilities that demonstrate this culture.
The concept of venture philanthropy is still evolving and with it so are the industry practices. In order for the field to succeed, participants will need to embrace the transparency that younger generations have grown to expect from all of the organizations they encounter. As consumers gather additional information about the exact impact of their philanthropic efforts, we can expect that they will vocalize opinions on best practices thus shifting the paradigms and forcing a more concrete definition of the field.