Page 20 - Social_Philanthropy

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4.3 Different approaches of venture philanthropy

Source: Philanthropy (Rosebud Ventures, 2019)

The concept of philanthropy can be divided in three different approaches. First of all, charity. Charity has
an immediate objective and tries to fill in the gaps of existing problems immediately rather than addressing
issues in the long run. There is another approach entitled the catalytic approach. In this case, there is
a theory and a plan with the objective to solve complex problems. The solution is usually based on
a multifaceted approach in a complex ecosystem. Finally, the organization building, is centred in investing
in the final beneficiaries and in its own leadership, follows a theory of change, the actual ability to carry
out the mission of the organization and the possible impact that it can have.

In the case of VP, the approach that follows is the organization building approach. Traditional foundations
usually follow the catalytic approach because they take the responsibility for designing the next steps to
solve a problem and then the non-profit organisation is the one that actually delivers the programme to
the final beneficiaries. These programmes tend to be specific and planed for short periods of time but, as
we have seen, this is not the case with VP. The type of activities done through VP are complex and planned
for a long period of time, it has a plan and requires complex and specialized skills and it requires to analyse
the management options, the opportunities, viability of business models and the financial sustainability of
the organization.

VP is a good option when it comes to actions aimed at protecting the environment. There are many smart
green venture philanthropies in Europe and in the US. These ventures have the objective to invest to
protect the environment, for example, in causes related to sustainable energy, sustainable mobility
and cities, environmental finances, climate change and green innovations. There is another term called
environmental investment, coined to refer to investments that contribute to environmental preservation.
Due to the wide spectrum of the definition of the term “environmental investment”, we could say that
venture philanthropy for environmental causes is a form of environmental investment.

The truth is that green ventures are gaining popularity. Green ventures can promote new ways of making
business by protecting the environment. Usually they are high-tech ventures that take advantage of in-
novations and technologies to deliver green products or processes that are eco-friendly compared to the
traditional ways of producing. For example, they use renewable energies, they apply innovative waste
processes, they recycle, they apply new industrial processes that do not pollute etc. It is true that these
ventures are gaining popularity, however they are still at their very first phase of development when we
refer to commercialization and the acceptance of the market. This is why, it is very important to count with
venture philanthropists and investors willing to take risks (Grossman, Appleby, & Reimers, 2013).