Venture philanthropy consultant Werner Blatter provides an insight into a new type of charity

Werner Blatter is a founding partner of Social Investors Partners, based in Zurich and Geneva. During the Liechtenstein Congress on Sustainable Development and Responsible Investing 2010 he talked in the following interview about his involvement in venture philanthropy.



Mr. Blatter, you previously spent many years working for the UNHCR. What prompted your move into consulting on philanthropy with Social Investors Partners?

My partner Patrick Frick and I noticed that on one side there were very wealthy people that wanted to help, and on the other hand there were a huge number of opportunities – and a great deal of need – to do something. Because wealthy people these days have very little time and don’t really know their way around the complex world of philanthropy, we decided to build bridges between the philanthropists and the projects.

First of all we develop a strategy for the person or family concerned, i.e. we work with the philanthropists to define the subject area and geographical focus of their philanthropic commitment. The next step is to do the due diligence on organizations working in the selected area. We present the customer with five to seven options. The next step is to negotiate an agreement in the customer’s name between the customer and the organization that runs the project. And then the money flows directly from the customer to the organization.

Finally, the most important step for us is the ongoing monitoring. We keep track of the project, which is easy enough these days thanks to Skype and e-mail. Once a year we go out and evaluate the projects in person. As a consequence, at the end of the year the customer knows very precisely the effect his or her money has had. Essentially, what we offer is outsourcing in the philanthropy business. Nevertheless, the customer is actively included in the process – for example when budgets are being discussed. It’s not just a matter of the customer simply writing a cheque.



It sounds like philanthropy has changed a lot.

I believe that philanthropy has undergone a very profound change. Up until maybe the Second World War, people simply gave money – often to church-based organizations. But then we saw the emergence in the Anglo-Saxon world of non-governmental organizations (NGOs). These were trusted organizations, and you would send your cheque to them.
But these days, people think in a more business-like way and want to know more. If I am an investor, I want to know exactly what happens with my investment. The same is true in the world of philanthropy. The approach has changed. People want to know what happens with their money and they want an answer to the following key question: can I make a difference? Having said that, there are millions of people who help do very good things by simply donating maybe 50 or 100 euros a year. Humanitarian and emergency aid always needs this kind of support.



What role do your customers’ values play? Do they discuss these with you – or do they already have very fixed ideas?

It depends. Some people have a very clear idea, and some have none at all. To help develop a strategy we ask them: What are your values? What do you feel really strongly about? And then we move on to: Do you just want to make a donation, or do you want to commit to a different model – i.e. venture philanthropy, or risk philanthropy?

The question here is whether an organization lives from donations alone or also creates its own capital. The knowledge an entrepreneur can bring to the table can be very helpful. So we might point them in the direction of projects where this will be particularly useful. Any profits then flow back into the non-profit-making activities. We have a project in Bolivia, for example, where a school trains carpenters and joiners. The furniture they produce is sold quite normally, but the profits are ploughed back into the school.

The risk is that you don’t know at the start of the project how it’s all going to work out. But because of the potential social return, it is worth taking the risk. With a mixed project like this, you can also encourage the organization to draw up its own business plan and work on the project in an entrepreneurial way.



The question about return on investment is actually all about integrating a long-term perspective into the decision to support a project. Doesn’t this bring us back to sustainability?

The ideal case is, of course, when you can say that your money will be invested for five years, for instance, and then the organization will be self-sustaining.



What subjects are your clients most interested in at the moment?

It varies a great deal, of course. But I would say that the subjects of youth and education – including occupational training – attract a great deal of interest. Women’s projects and concrete microcredit programmes are also popular. The common aim is to give people the opportunity to work their own way out of a dire situation.


You can find more about venture philanthropy by reading Werner Blatter’s article “Venture- oder Risikophilanthropie in der Schweiz – Eine praxisbezogene Bestandsaufnahme”, which appears in “Venture Philanthropy in Theorie und Praxis”, edited by Thomas Ebermann and Andreas Schlüter. Lucius & Lucius, Stuttgart 2010.

For more information about Werner Blatter, please visit socialinvestors.com

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