FINANCE NEWS: Venture fund plans June launch

Mathew Little

The first general venture philanthropy fund for the charity sector is set to launch in June.

The Impetus Trust is attempting to raise £4 million to provide long-term funding of charities' core costs combined with hands-on management support.

The trust, founded by Stephen Dawson, managing director of venture capital firm ECI, is the first venture philanthropy fund to target the general charity sector rather than specific sub-sectors.

It will donate to medium-sized charities with incomes between £250,000 and £10 million and will focus mainly on "people" charities as opposed to those concerned with animals, arts or heritage. It will not support research, advocacy or religious charities.

Exploratory talks with some potential charity clients have already begun and the trust is recruiting a chief executive in time for its June launch.

Dawson said that Impetus would look to intervene when a charity was "poised for growth, suffering serious management or financial problems, or contemplating a merger".

"The starting point is different than for the traditional grant applicant.

We will sit down with the charity and discuss long-term objectives, saying 'maybe you can raise your sights because of this funding'. Performance measures come naturally from this. And also impact assessments - measuring social return," he said.

Funding will last between three and five years and be combined with monthly management meetings and input from the trust's network of associates, trustees and business managers.

Impetus has received core funding for three years from several grant-making charities, including the venture philanthropy charity World in Need.

But the trust will target private individuals to build up its grant-making fund. With its core costs secure, Dawson said it wanted to ensure that 95 per cent of all individual donations would be directly invested in charities.

Dawson said that the Impetus model offered donors a bigger role than traditional grant making. "I have been a modest donor for a few years and found it unsatisfactory just writing out a cheque to big brand charities and having no influence. This gives a greater input to donors - they are more involved," he said.

"We are looking at the best way of making ourselves accountable and enfranchising our donors. That is work in progress," he said.

John Pepin, a consultant who works with charities on preparing for venture philanthropy, said the commitment to fund core costs was an important development. "The focus on infrastructure is significant. It is a need that gets ignored by typical funders."

But he added that charities had to prepare for venture philanthropy.

"Charities can take advantage of this but they have to be aware that this is true partnering. This is not just a question of taking a grant. Trustees, senior management and programme managers have to be fully prepared to work closely with outsiders," he said.

The fund's trustee board includes consultant and former PPP Trust director David Carrington, former Charity Commissioner Michael Webber and Julia Middleton, the chief executive of citizen participation charity Common Purpose.

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