Investment Principles 2
Investment Principles - Delivery Model
Nearly 10 years ago, leaders in the alternative investment industry joined together to establish a charity to raise funds and support worthwhile causes.As the group became established, its members defined core values, ambitions and objectives so that the charity would be distinctive and have a rigorous approach to philanthropy.In November 2002, Absolute Return for Kids (ARK) was launched with the mission of ‘transforming children’s lives’.
Venture Philanthropy
ARK’s Trustees were keen to explore a then new approach to charitable giving known as ‘Venture Philanthropy’. This was a form of more engaged philanthropy which applied venture capital investment principles – such as long-term investment and capacity building support – to the voluntary and community sector. ARK’s approach to Venture Philanthropy is characterised by:
- high engagement and a willingness to innovate and try new approaches
- tailored financing and a readiness to shift funds between programmes based on tracking measurable results multi-year support, typically a minimum of three years up to an average of six years
- non-financial support in the form of intellectual and human capital performance measurement
A philanthropic cooperative
From the outset, ARK’s Board decided to differentiate the charity by acting as a philanthropic cooperative and ensuring that the central administrative costs of the charity were covered.
This was important, instilling confidence among other Donors that 100% of their money would go directly to the programmes identified and managed by ARK. They would also know that in-depth research was being done and excellent management teams recruited to ensure high quality implementation.
ARK would ensure that the impact of every donation was maximised by consistently applying the same principles and disciplines to managing the charity as it would to running a business.
“We believed it was essential to put accountability and measurability at the heart of our giving, and to apply business principles to our charitable actions to achieve most impact. We wanted to make sure that we and our partners could achieve a real ‘bottom line’. While the ‘return’ would not be in financial terms, success meant a fundamental change in children’s lives.”