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European venture philanthropy growing more sophisticated, EVPA survey finds

European venture philanthropy growing more sophisticated, EVPA survey finds

News (International)

Venture philanthropy (VP) and social investment (SI) organisations are becoming more sophisticated in their use of financial instruments to generate social impact, according to EVPA’s second annual survey released on 1st March.

The average annual financial spend per VP/SI organisation was €5.2m – a 27% increase on the previous year (€4.1m). In total 61 organisations responded to the European Venture Philanthropy and Social Investment 2011/2012: The EVPA Survey.

Key trends identified in the report include:

  • Societal returns remain the primary focus but more VP organisations are now looking for a financial return (48% in 2011, compared with 38% in 2010) or are putting societal and financial return on an equal footing (25% in 2011, compared with 10% in 2010).
  • VP/SI organisations have become more sophisticated in their use of the entire range of tools to generate greater societal impact, including a focus on impact measurement, due diligence, co-investment, capacity building, effective non-financial assistance and exits, and further use of tailored financing.
  • The use of tailored financing is evidenced by the significant increase in the use of equity and debt instruments, and in the variety of financing instruments. Debt and equity emerge as the most commonly used financing instruments, closely followed by grants.
  • European VPOs are increasingly focusing on social enterprise as a target investee and are continuing to invest in small organisations with limited track records. This indicates they are taking their role as risk-takers very seriously.

A statement from the EVPA said: “VP/SI is clearly filling a market gap by focusing on early-stage social enterprises and non-governmental organisations with financing tailored to their needs, rather than aiming to achieve market rate returns.”

The report can be freely downloaded and a printed copy (priced €25) can be ordered by contacting info@evpa.eu.com

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