It is worth noting that while there exist varying frameworks for the implementation of venture philanthropy, most tend to be a hybrid of the existing frameworks.
Performance Evaluation Based on Metrics
One way to build impact accountability -- a key feature of venture philanthropy -- into an agreement is to use a Social Return on Investment (SROI) approach. Used by organizations such as the Robert Enterprise Development Fund (REDF).
By assigning monetary values to the impact generated by an investee, it becomes much easier to assess the performance of an investment. In addition, the rigorous SROI process encourages an evaluative approach in which well-performing interventions can be further grown and under-performing areas re-assessed.
This model is, just as it sounds, characterized by a close relationship between the venture philanthropy organization and its capital recipients. Often, the venture philanthropy organization has its own growth methodology which it helps its recipients implement. A board seat is sometimes also part of the equation, for more frequent oversight and to ease a more hands-on approach.
New Profit is one example of a venture philanthropy organization that takes such an approach. They actively support service delivery of their recipients' work, focusing on education, economic empowerment, early childhood development, and public health impact areas. To date, they have invested in a high-engagement way in over 500 organizations.
The essence of this model relies on pooling funds together, whether those funds are pooled by high net worth individuals or a group of organizations, or both. This pool of funders makes decisions on where and how to allocate that capital.
Social Venture Partners (SVP), founded in 1997, is one well-known examples of such an approach. Partner affiliates of SVP, of which there are 40+ today, also play a role in the capacity building side of venture philanthropy, while the central office of SVP conducts trainings on topics like venture philanthropy itself.
As mentioned at the outset of this section, venture philanthropy doesn't have to be just one thing. Some organizations take a hybrid approach to their strategy. This could mean leveraging both a non profit 501(c)3 structure and a for-profit LLC structure to facilitate the support of both such types of entities. Omidyar Network is one of the most well known organizations that has adopted this approach.
Another hybrid model leader, the Skoll Foundation, takes a very diversified approach to venture philanthropy through its own Program-related investment strategies and also through its work to advance the ecosystem of venture philanthropy.