The Private Equity Foundation’s (PEF) latest impact report is a testament to the success of venture philanthropy as a model that can make a huge difference, achieving a 5x multiplier on investment of £30m and 39,000 hours of pro bono business support to help change over 97,000 disadvantaged young lives.
Since 2006, PEF www.privateequityfoundation.orghas connected money and pro bono business expertise from the private equity community to what they consider are the very best in youth interventions, to increase their impact focussing on the issue of young people Not in Education, Employment or Training (NEETs). Where the right breakthrough programmes don’t exist, PEF has drawn on its research and international experience to pilot and scale up its own.
Johannes Huth, Chairman of the Private Equity Foundation, said: “This report demonstrates what can be achieved if businesses pool their resources and donate funds and time. Effective, sustainable youth charities are the change agents of our time, providing young people with the support that will enable them to develop their full potential.”
It reports that in five years:
- 97,668 young lives changed
By helping four to 24 year olds at home, through school and into the workplace, the charity aims to transform their life chances and drive down the nearly one million young people currently not in education, employment or training (NEET).
- £30m raised, alongside 39,000 hours of pro bono business services
PEF donates money and pro bono business expertise to charities — investing in their leadership, staff and infrastructure — to enable them to improve their impact on the ground and help more young people overcome poor life chances. Where the right interventions don’t exist, PEF has created its own.
- 5x multiplier
PEF focuses on building charities’ capabilities to enable them to attract further funding to expand their reach. That further funding might come through PEF’s investment in a dedicated fundraiser or business development team, because PEF has taken the role of ‘lead’ or cornerstone investor or simply because of PEF’s endorsement of the charity.
- Young person success rates of up to 98%
PEF carries out extensive due diligence to ensure that the charities and programmes it backs are best in class. Despite helping some of the most vulnerable young people, success rates are high across the age range it supports:
- 62% to 72% of six to eleven year olds improved in numeracy and literacy
- 79% to 98% of 12 to 16 year olds supported moved into post-16 education or work
- 79% to 85% of 16 to 24 year olds went to university, into training or work
- £272m savings to the public purse
Early intervention pays. The University of York estimates the average life-time public finance cost of each NEET to be £56,300.
Shaks Ghosh, Chief Executive of the Private Equity Foundation, said: “Over the last five years we’ve become increasingly expert in the area of NEET young people (not in education, employment or training) and sadly, we’ve seen it change from a specialist acronym to the social issue of our time. To have supported nearly 100,000 disadvantaged children and young people is a considerable milestone but there is much more to be done. Going forward, we will double our efforts with those charities which are ready to achieve considerable scale, while still ensuring we have a strong ‘venture portfolio’ of programmes which we are preparing for growth. There has never been a more important time to invest in the next generation.”
Case Study: Tomorrow’s People, Working It Out Programme
Working It Out was set up in 2004 by Tomorrow’s People. The project did not fit into a mainstream model of educational support and struggled to attract government funding. However, PEF saw the early results, recognised the potential and invested £625,000 in July 2008, on the basis that Working it Out demonstrated:
- An 86% success rate at helping hard to reach young people into positive activities;
- It was a proven intervention, but one that was in need of an element of refinement and development in order that it could be scaled up effectively.
- Tomorrow’s People is business focused and keen to make use of PEF’s expertise and assistance to scale up the programme.
PEF’s original investment, alongside strategic consulting support, legal and tax advice provided pro-bono by PEF volunteers, has enabled Tomorrow’s People to refine and scale the Working It Out programme and replicate it in five additional locations across England and Scotland.
PEF’s initial investment has also helped to leverage significant further investment into the programme. Most notably, in 2011 Working It Out won £3.2m of funding from Inspiring Scotland, to help expand in Scotland. In 2011 the UK Government made a major investment grant of £1.5m (Department for Education) to fund Working It Out in England for two years. There is strong consensus that PEF’s initial investment put Working It Out in the best possible position to secure this funding.
Brian Gibson, National Manager Young People’s Services Tomorrow’s People, says: “The rigorous preparation we underwent to secure the original investment was invaluable training for our team, which has since been able to compete successfully for further grants from other organisations. We are grateful to PEF for providing us with the means and expertise to continue with the expansion of Working It Out which is enabling us to change the lives of so many more young people across the country.”