Around the world, sources of public funding are insufficient to provide all people with the essential social services required to live healthy lives. The role of the private capital has become increasingly critical, in order to bridge these social provision gaps. The private sector has grown bolder by adopting innovative financing mechanisms to address root social issues alongside the public sector.

Some of the recent approaches that philanthropists have taken go beyond traditional charitable giving. They are now engaging in new forms of results-based and blended financing models, and offering a wide-range of bespoke services alongside their investments. These new approaches promote innovation in service delivery, thereby allowing capital to be deployed more efficiently.

One way that investors are scaling their investments for impact is by offering cross-functional, individualised support. Started by the founders of jewellery company Pandora, North-East Family Office (NEFO) was created in 2013 to manage the philanthropic engagements of the family. NEFO goes beyond the traditional role of a grant-maker by ensuring that their early-stage investments become successful.

One of NEFO’s early-stage investments, a Dutch NGO called Mentorbarn, developed a highly bespoke method to match at-risk children with families. NEFO believed that the investment could pay back over 100 times the amount in public savings over the lifespan of each child helped. With a two-year grant commitment, NEFO supported Mentorbarn’s growth and development by offering support on organisational strategy, developing a business case, providing accounting and legal support, and by launching a social media campaign that prompted over 600 families to volunteer. Since investing, Mentorbarn has been able to achieve its mission of minimising homelelessness, mental illness, and economic marginalisation, and has secured contracts with 6 municipalities in Denmark.

Read the full article about philanthropy innovation by Danielle Todesco at AVPN.