Blog

11.12.2018

Invest in a good cause to receive greater returns

Former Baillie Gifford & Co partner Leslie Robb shares the rewards of venture philanthropy following his investment in Inspiring Scotland’s 14:19 Fund.

When an investor is running the rule over a potential deal, one question pops up again and again: what’s the return on my investment? Whether it is the dividend or the interest rate or the increase in the share price, investors want to know how much money they will make from a deal.

Yet, not all returns on investment can – or should – be measured in terms of money. As one of the investors in the 14:19 Fund run by non-profit organisation Inspiring Scotland, the return that I want to see is how many young people are being helped into education, employment and training by the charities supported by the fund.

Inspiring Scotland was launched in 2008 to help essential charities become exceptional ones. The organisation not only invests cash from its funds, but also uses what’s known as the “venture philanthropy” model.

This means that charitable organisations receive both funding and advice on how to manage their operations. This knowledge comes from performance advisors and professional volunteers, who help the third-sector organisations on a pro bono basis. The performance advisors work alongside members of staff to strengthen the day-to-day running of the charities. Whether it’s succession planning or risk management strategies, the advisors help the organisations to enhance the essential skills they need to ultimately help more young people.

One of the key factors is helping charities to improve their financial management, including the ability to carry out cost-benefit analysis. We’ve all heard horror stories about how some charities have frittered away their money on ineffective programmes or had it swallowed up in needless expenses – that’s why, as an investor, it’s so reassuring to see how Inspiring Scotland operates.

Another important consideration is how the not-for-profit organisation connects its charities with pro bono advisors. This network of more than 300 experts – from lawyers and accountants through to photographers and public relations advisors – have helped these organisations to tackle issues in their specialist fields.

This use of the venture philanthropy model was one of the attractions for me of investing in the 14:19 Fund. After retiring as a partner at fund manager Baillie Gifford & Co six years ago, I was looking for new interests when an ex-colleague mentioned Inspiring Scotland to me.

Two of its performance advisors had worked in the same industry as myself and so my interest was piqued. That gave me a kick-start to look more closely and the more I saw of what Inspiring Scotland was doing, the more I felt that it was the kind of organisation I would like to support.

I was attracted to the 14:19 Fund because it supports young people who are struggling due problems linked with their background or education. I didn’t come from a particularly well-off background and so I’m a big fan of people who strive to achieve success in whatever they do.

It’s important to try and develop young people’s skills – that’s not something the government or the education system can fully do. Many young people start their lives with serious disadvantages and it’s important to recognise that and try to find ways to deal with it.

One of the most rewarding parts of investing has come when I’ve visited the charities and met the young people who have been helped by the fund. It would be unfair to single out any one cause because they all do good work.

What links the charities is that they all provide activities that appeal to young people – whether it’s football with Street League, cycling with the Rural & Urban Training Scheme (Ruts) or cooking for the café or youth hostel run by the Callander Youth Project Trust. The charities use these activities, which young people don’t find threatening, to build their confidence, before helping them to develop other skills that will aid them in their search for education, employment or training.

The other factor that unites all the charities is how impressed I was with the members of staff who I met. The way they work with the young people is inspiring and it’s great to see how they have developed with ten years of support and investment.

As the 14:19 Fund comes to the end of its ten-year operation this month, I know that members of staff at Inspiring Scotland are busy putting the finishing touches to plans for its next thematic fund. I’m confident that any potential investors who take the time to meet with the team at Inspiring Scotland to learn about its venture philanthropy model will be impressed with the high-calibre of the organisation.

Meanwhile, the current fund is on course to hit its target of helping 35,000 young people over the past decade. That’s a healthy return on investment in my book.

This article was written by Leslie Robb and was initially published in The Scotsman on the 10th of December 2018