News analysis: Dynamic duo target African states

Katheryn Mohr

A Scottish millionaire and a former president are behind a venture that could change Africa.

Two of the world's poorest countries could be about to see their fortunes change dramatically, thanks to an extraordinary plan by two of the world's most influential men.

Sir Tom Hunter, the Scottish philanthropist, has joined forces with Bill Clinton, the former US president, for an unprecedented poverty alleviation scheme that will cost Hunter's eponymous foundation £55m.

The Clinton-Hunter Development Initiative, which is modelled on what Hunter calls "venture philanthropy", will focus on two impoverished African countries that are yet to be chosen, though candidates are thought to include Malawi, Lesotho and Kenya. The emphasis will be on local people identifying the best approach for their own development.

Under the venture philanthropy model, the Hunter Foundation will treat its donation as it would a commercial enterprise, setting milestones to be achieved for every investment that is made. Each investment will be independently evaluated on a monthly, quarterly or annual basis to measure outcomes against the targets. The intention is that the two countries will eventually become self-sustainable.

Ewan Hunter, chief executive of the foundation, says: "In philanthropy, the return isn't financial - it's human life, which is a much greater return to receive."

Making grand plans

Each project will be tailored to the needs of the communities involved, and major regional programmes will be piloted in sectors such as education, health and agriculture. The project will also promote entrepreneurship on a micro-level by supplying local people with loans to start their own businesses.

"Micro-credit aids the development of local businesses, which should lead to self-sustainability," Hunter says.

With the lid only just lifted on Clinton's and Hunter's grand plan, UK aid and development charities are reluctant to comment until they know more about it. But the consensus seems to be that venture philanthropy as a fundraising concept has potential.

Anna March, donor development manager for WaterAid, says the model originated in the US and has been used successfully by larger, wealthier organisations and individuals.

"With careful management on both sides, venture philanthropy has a lot of potential," March says. "It tends to attract people who wouldn't ordinarily be putting money on the table in the conventional, grant-giving way. Because of this model, the sector is attracting donors that usually invest in businesses."

Judith Brodie, chief executive of the Impetus Trust, says one of the benefits of venture philanthropy is that it offers a holistic approach to investing in charities in both a financial and a practical sense, helping to support charities through change.

"Impetus Trust does not think venture philanthropy is the answer for all charities," she says. "But it can help certain charities, at certain stages in their development, deliver more to their beneficiaries."

Brodie says the challenge for fundraising charities is to familiarise themselves with the options and understand when venture philanthropy might be right for them. "We don't look at venture philanthropy as displacing other players, but as broadening the opportunities for certain charities," she adds.

But UK aid and development charities hoping for a slice of the Clinton-Hunter action shouldn't get too excited too quickly. The foundation intends to devise the detail of its plan by consulting local communities and organisations. External assistance will be sought only if those local groups decide they need it. If they do, they and the foundation will select project partners and invite them to participate. But Ewan Hunter is clear that only those prepared to ditch their predetermined agendas will be chosen.

"We will work with organisations willing to leave their hats at the door and play a role in an integrated approach," he says. "We will proactively source the type of capacity we and the communities need, which means there may well be no application process per se.

"That said, if a collection of organisations approached us with an integrated approach that crossed organisational boundaries and capabilities, we would certainly listen," he adds.

The Clinton-Hunter Development Initiative has two primary goals: to use venture philanthropy as a means to support poor communities until they become self-sustainable, and to construct a model that can be replicated throughout the entire country.

"By using venture philanthropy we can prove, with our independent evaluations, that our programmes work," says Sir Tom.

"Our hope is that, once we've proven it, the countries' governments will step in and roll it out everywhere."

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