Venture philanthropy for family offices

This insight delves into how family offices can utilise venture philanthropy to align investments with philanthropic goals and positively impact society. By implementing traditional venture capital principles, they can invest in projects that empower communities and maximise social impact.
venture philanthropy for family offices

What you need to know

  • Venture philanthropy applies traditional venture capital principles to philanthropic initiatives, focusing on maximising social impact rather than financial returns.
  • Family offices engage in venture philanthropy to align their investments with their philanthropic objectives, create a lasting legacy, engage multiple generations, and build collaborations and partnerships.
  • Successful navigation of venture philanthropy requires conducting due diligence, measuring impact consistently, and approaching it as a long-term commitment that combines investment capital with mentoring and skill-building support for social entrepreneurs.
Impact Updated on January 16, 2024

Venture philanthropy is often compared to impact investing. While the two are similar, venture philanthropy precedes the new investment trend. The term was coined in 1969 by John D Rockefeller III in a speech before the US congressional committee.

In defending the tax benefits of philanthropy, Rockefeller argued that it played a massive role in helping society solve some social problems that governments could not address. He believed that philanthropy should support the exploration of new areas, take calculated risks, and identify emerging needs in society. In essence, philanthropy should act as venture capital for tackling societal issues.

Fast forward a few decades, and the need for venture philanthropy still persists. This insight explores venture philanthropy, why it’s important for family offices and how they can navigate the space for success.

What is venture philanthropy?

Venture philanthropy involves using traditional venture capital principles to support philanthropic initiatives. In other words, it approaches charitable giving from the lens of a professional investor. Typically, venture capitalists search for start-ups and rigorously conduct due diligence before finally investing to maximise financial returns. Venture philanthropists, on the other hand, select organisations with similar rigour. However, their primary concern is how much social impact the organisation will have in the future.

About the Authors

Lindi Miti

Lindi Miti

Writer & Content Producer

Lindi works with the content team to help benchmark and streamline family office operations.

Connect with Lindi Miti

Create your free account to continue reading this insight.

Join our community and become a Simple member today.
Not yet a member?

Sign up for a free account by clicking on the link below.

Register New Account