Close this search box.

Venture philanthropy and the quest for aid effectiveness

The Guardian (09 July 2013)

Philanthropists are increasingly shaping the development landscape but what drives them and how healthy is the focus on getting ‘bang for their bucks’?

The venture philanthropy model: should we be asking questions about the strings attached to funding? Photograph: Bu Ensa/EPA

With no end to austerity in sight and aid to the developing world continuing to plummet (down 4% in 2012), donors from DfID to AusAid and Korea’s Kaidec are exploring new financing mechanisms, including working with philanthropic organisations and foundations.

According to the 2012 index of global philanthropy and remittances (pdf), while government aid accounted for just 18% of total financial flows within international development in 2010, philanthropic giving, remittances, and private capital investment accounted for 82% of the developed world’s economic dealings with developing countries.

Philanthropic organisations are also increasingly adopting corporate ethics, opting for venture philanthropy or philanthrocapitalism.

The emerging trend of philanthropy, according to the European Venture Philanthropy Association, features six main characteristics. It involves high levels of engagement, tailored financing, multi-year support, offers beneficiaries assistance beyond finance to include support for marketing or organisational infrastructure, organisational capacity-building beyond mere project delivery, and performance based management with a strong focus on measuring outcomes and impact.

New Philanthropy Capital, a UK-based consultancy, reports that venture philanthropy typically begins with funding basic frontline services where donors can see real ‘bang for their buck’, as they become increasingly familiar with the issues behind the challenges they seek to address.

NPC’s head of charity effectiveness, Iona Joy cites the example of a family trust that has come to focus on the challenge of water and sanitation as the issues drive so many other challenges that occur in the developing world.

“Something like water and sanitation is a good area for funding market, rather than straight [traditional] aid, solutions,” says Joy. “So how do you build the informal market for decent cheap toilets or affordable access to clean water? Sometimes the solutions can be market-based rather than do-gooders running around digging wells.”

One development organisation that has built venture philanthropy into its DNA is India’s Smile Foundation. Co-founded by Santanu Mishra in 2002, the organisation says it reaches out to more than 300,000 underprivileged children and youth across 25 states of India. Having benefited from a middle class upbringing and from cashing in on India’s economic boom when the country liberalised its economy in the early 90s, Mishra and his associates felt the need to give something back.

They set up a foundation and chose to run it on a venture capital model. The approach enabled them to look for individuals who had talent, ideas and a wish to do something but lacked adequate resources.

“We decided to equip them with resources to become self-sustainable and scale up the good work they were doing on a smaller scale at grassroots level,” says Mishra. “That is why instead of investing or focusing on building infrastructure we opted for social venture philanthropy as … the social return on investment was high, impacting more beneficiaries.”

However, associate professor of law, Garry Jenkins, in his paper ‘Who’s Afraid of Philanthropcapitalism’ (pdf), writes that the new venture philanthropists are “increasingly directive, controlling, metric focused, and business oriented with respect to their interactions with grantee public charities in an attempt to demonstrate that the work of the foundations is ‘strategic’ and ‘accountable’.”

The criticism of venture capitalism goes beyond the management style of its proponents. In a recent article Michael Edwards, a senior fellow at the thinktank Demos, questioned whether money can actually foster social transformation. While no development initiatives can function without some money, the wealth required to fund them in Edwards’ words, “raises questions about inequality, the strings attached to funding, and the power of those who hold them to push resources to causes they approve of, perhaps even weakening or corrupting authentic social action in the process”.

Despite his misgivings Edwards argues that there are emerging experiments in what he calls “transformative financing” – funding that, according to Edwards, “has the double impact of boosting radical changes in society and transforming relationships surrounding money in support of these activities.” One such example is the Philanthropic Ventures Foundation. Rather than the top-down, micro-managed approach that is common in the venture philanthropy model, PVF’s financing comes with no strings attached. Its philosophy is that by simplifying the grant giving process, “every dollar would work harder and do more.”

In the book Grassroots Philanthropy the organisation’s founder Bill Somerville writes: “We fail to realise that the chief benefits of working in a foundation – money, power and privilege – also work as the three greatest obstacles to doing a good job.” It is a lesson that both philanthropists and development may do well to heed.


Privacy Policy - Smile Foundation

Information Gathering

1. Smile Foundation collects information from the users in a number of ways, for example when the user:

  • Makes a donation
  • Signs up for a campaign
  • Signs up to stay updated

2. While forwarding a donation for Smile Foundation the well-wishers have to submit some personal information as it would help us ensuring genuine contributions:

  • Your name
  • Your email and mailing address
  • Your telephone number
  • Your payment processing details
  • Any other data as required

3. Smile Foundation does not collect or record the user’s personal information unless he/she chooses to provide it.

Use of Personal Information

1. General browsing of Smile Foundation website is anonymous and it does not register the user’spersonal information except the time, date and place of visits and the name of internet service provider. This data is used only for statistics and diagnosis.

2. By signing up for various services offered by Smile Foundation, the user explicitly authorizes us to collect information based on the user’s usage. The information is used to help provide a better experience to the user and is used as per the user’s specified instructions.

3. Smile Foundation keeps the user information strictly confidential and this information is secured safely. All relevant information collected through Smile Foundation website is handled and used by internal and/or authorized officials only. It is nevershared with any external agencies or third party individuals.

4. Smile Foundation uses the information givento it in the following ways:

  • To keep an accurate record of all the donations received
  • To update users about its happenings and developments through bulletins and newsletters, with an option of not to subscribe for the same
  • To make sure the user is receiving the most appropriate and relevant information
  • To find out more about the people who are visiting the Smile Foundationwebsite, donating, or joining its campaigns

5. Usually, Smile Foundation does not store user data. In case of specific sign-ups, the data is stored as per user request. The user can opt to delete all the information he/she has provided by simply requesting such by mail. All information, without exception, will be deleted in two working days.

Privacy of e-mail lists

Individuals who join Smile Foundation’s mailing lists via its website or through its campaigning engagements are added to its email database. Smile Foundation does not sell, rent, loan, trade, or lease the addresses on our lists to anyone.

Cookie Policy

1. Cookies are pieces of electronic information which will be sent by Smile Foundation when a user visitsthe website. These will be placed in the hard disk of the user’s computer and enable Smile Foundation to recognise the user when he/she visits the website again.

2. The user can configure his/her browser so that it responds to cookies the way he/she deems fit. For example, you make want to accept all cookies, reject them all or get notified when a cookie is sent. The users may check their browser’s settings to modify cookie behaviour as per individual behaviour.

3. If a user disables the use of cookies on the web browser, or removes or rejects specific cookies from Smile Foundation’swebsite or linked sites then he/she may not be able to use the website as it is intended.

Payment Gateway

1. SmileFoundation uses well-recognised and proven technology for payments. Payment information is transferred by the use of an SSL connection which offers the highest degree of security that the donor’s browser is able to support.

2. Several layers of built-in security, including an advanced firewall system, encryption of credit card numbers, and use of passwords, protect the collected information.

External Web Services

1. Smile Foundation uses a number of external web services on its site to display content within its web pages. For example, to display video it uses YouTube. As with the social media buttons, Smile Foundation cannot prevent these sites, or external domains, from collecting information on the user’s consumption of the content embedded on its site.

2. The Smile Foundation website contains links to other websites for the benefit of its visitors. This Privacy Policy does not apply to such other websites.

3. Smile Foundation is not expressly or impliedly responsible for, or liable to any loss or damage caused to a user by the collection, use and retention of Personal Information by such website in any manner whatsoever. It is important that the users review the privacy policies of all websites they visit before disclosing any information to such websites.

Changes to Privacy Policy

1. As and when the need arises, Smile Foundation may alter its privacy policy in accordance with the latest technology and trends. It will provide you with timely notice of these changes. The users may reach out to Smile Foundation if they have any queries about any changes made to its practices.

2. If you have any questions at all about Smile Foundation’s privacy policy, please write to us at: [email protected]

Refund and Cancellation Policy

Welcome to this web-site of SMILE FOUNDATION. We make public our policy on refund and cancellation of donations received for the social cause on payment gateway as under:-

  • No refund/cancellation for the donated amount by any donor will not be entertained, the online donations through the online payment gateway.
  • No cash or refund of money will be allowed.
  • If any in-kind support received by the donor from any where the material will be reached to the poorest of the poorer communities.
  • Once received the donation for a cause will not be refunded to the donor. No cancellation to be made. The donation will be used for the community development, children education or women’s empowerment.
Terms and Conditions

Use of this site is provided by SMILE FOUNDATION subject to the following Terms and Conditions:

SMILE FOUNDATION reserves the rights to change these terms and conditions at any time by posting changes online. Your continued use of this site after changes are posted constitutes your acceptance of this agreement as modified. You agree to use this site only for lawful purposes, and in a manner which does not infringe the rights, or restrict, or inhibit the use and enjoyment of the site by any third party.

This site and the information, names, images, pictures, logos regarding or relating to SMILE FOUNDATION are provided “as is” without any representation or endorsement made and without warranty of any kind whether express or implied. In no event will SMILE FOUNDATION be liable for any damages including, without limitation, indirect or consequential damages, or any damages whatsoever arising from the use or in connection with such use or loss of use of the site, whether in contract or in negligence.

SMILE FOUNDATION does not warrant that the functions contained in the material contained in this site will be uninterrupted or error free, that defects will be corrected, or that this site or the server that makes it available are free of viruses or bugs or represents the full functionality, accuracy and reliability of the materials.

Copyright restrictions:

Commercial use or publication of all or any item displayed is strictly prohibited without prior authorization from SMILE FOUNDATION. Nothing contained herein shall be construed as conferring any license by SMILE FOUNDATION to use any item displayed.

Documents may be copied for personal use only on the condition that copyright and source indications are also copied, no modifications are made and the document is copied entirely. However, some documents and photos have been published on this site with the permission of the relevant copyright owners (who are not SMILE FOUNDATION). All rights are reserved on these documents and permission to copy them must be requested from the copyright owners (the sources are indicated within these documents/photographs).

SMILE FOUNDATION takes no responsibility for the content of external Internet sites. Other websites that we link to are owned and operated by third parties and SMILE FOUNDATION has no control over them. The fact that we include links to other websites does not mean that SMILE FOUNDATION approves of or endorses any other third party website or the content of that website. We accept no liability for any statements, information, products or services that are published on or are accessible through any websites owned or operated by third parties.

Any communication or material that you transmit to, or post on, any public area of the site including any data, questions, comments, suggestions, or the like, is, and will be treated as, non-confidential and nonproprietary information. If there is any conflict between these terms and conditions and rules and/or specific terms of use appearing on this site relating to specific material then the latter shall prevail.

These terms and conditions shall be governed and construed in accordance with the laws of India.

If these terms and conditions are not accepted in full, the use of this site must be terminated immediately. SMILE FOUNDATION for Social Welfare Service is a registered at

161 B/4, 3rd Floor, Gulmohar House
Yusuf Sarai Community Centre
New Delhi-110049
Phone : +91-11-43123700

Supplementing & In Alignment with Government Initiatives


Sarva Shiksha Abhiyan
National Education Policy
Beti Bachao, Beti Padhao
Digital India


Skill India
Enhancing Formal Skilling


National Rural Health Mission
Universal Health Coverage
National Digital Health Mission
Promotion of Govt. Health Schemes


Anaemia Mukt Bharat
Poshan Abhiyan
Atmanirbhar Bharat Abhiyan
Anganwadi Strengthening