Venture Philanthropy maximises the social impact of major charities

Created nearly 10 years ago by Maurice Tchenio, the AlphaOmega Foundation uses private equity methods to efficiently support major charitable institutions and help extend their reach. Elisabeth Elkrief, Managing Director of the AlphaOmega Foundation explains the principles and objectives of this unique foundation that is coupled with an endowment fund invested in private equity.

Could you explain the concept of Venture Philanthropy?

Elisabeth Elkrief: Venture Philanthropy is based on a simple principle: for the best non-profit charities to carry out their mission on a wide scale, they must be structured the way for-profit companies are structured. Yet most corporate patronage is devoted to financing projects rather than to structuring the non-profit vehicle. Our conviction is the opposite. By strengthening the strategic coordination, management and operational efficiency of high-impact charities, we generate real systemic change.

We adapt private equity methods to the charitable sector, and in line with industry practices, we select only those charities whose managerial expertise and performance or “unique social proposition” has brought them to a certain critical mass. Once we are sure that we share management’s vision, we accompany the charity over the long term, providing financial support and other skills to strengthen their structure. This creates leverage which in turn strengthens our support.

What is the nature of this leverage?

E.E.: When the AlphaOmega Foundation invests in a charity, other financial partners are encouraged to participate, because our method of support ensures their funds will be invested efficiently. Similarly, we are able to attract high-quality skills patronage that is in line with our philosophy, and we endeavour to put these people’s professional expertise to work for the benefit of the best performing charities.

How do you choose the charities you support?

E.E.: We focus our efforts on education, because we consider that success in school and professional integration are the best means for social advancement. The current social crisis reminds us that we must urgently facilitate upward social mobility. Of today’s 4.5 million disadvantaged pupils, 45% will be unemployed when they leave school. Schools can’t solve this problem by themselves. So, we help socio-educational professionals who work with teachers at every critical moment in a child’s educational career, from prevention to remediation, to keep them from dropping out. We choose only those charities that support at least 7,000 young people per year, that have a budget of at least €1 million and that have sufficient geographical coverage to deploy a nationwide programme.

Can you give some examples of significant charities?

E.E.: Accordingly, the six charities we support are all of a significant size and impact. Coup de Pouce, or “Helping Hand”, is the largest charity combating early school dropout; AFEV is the largest network of university student mentors for children from disadvantaged neighbourhoods; Energie Jeunes helps 11-15-year-olds persevere in priority schools; Entreprendre Pour Apprendre, or “Learning by Doing”, opens new doors to young people who are out of the job market by initiating them to entrepreneurship. Lastly, Écoles de la 2e Chance are “second-chance schools” that help young people with no academic diploma enter the job market. Our charities help a total of nearly 180,000 young people per year.

SynLab, our most recently selected charity, trains more than 190,000 public system teachers in best educational practices so that they can better help students in difficulty succeed in school.

What specifically did you do for “Écoles de la 2e Chance”?

E.E.: Based on the strategic recommendations of McKinsey and Oliver Wyman, the 140 Écoles de la 2e Chance have structured themselves into a network recognised by the government as one of the most effective methods for professional integration. By building sound governance, formalising their educational offering and harmonising their processes (IT systems, accounting, etc.), they have created exacting standards for certification that were included in 2018 in the government’s Poverty Plan and Skills Investment Plan.

What are your objectives for the coming years?

E.E.: Thanks to Apax Partners and our partner funds, which allows us to co-invest our endowment in their deals to finance our initiatives, we work every day to create more social performance.

After giving our charities ambitious strategic plans, we must now deploy operational projects such as digitalisation and try to ultimately reach enough young people to breathe new life into the concept of social mobility.

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