Venture philanthropy — The Shell Foundation's funding approach and what you need to know
Editor’s Note, May 2: This article was updated to reflect the number of portfolio managers working at the Shell Foundation.
Last year, Envirofit — a social enterprise that develops low-cost clean cookstoves — hit a startup jackpot when it announced it had secured $4 million in financing to scale up its operations. Around the same time, another company with a mission to provide solar energy to the poor — d.light — announced it had raised more than $22 million in investment.
Both these social enterprises might have died years earlier were it not for the continued backing of a special kind of funder willing to invest in regions and sectors where traditional donors and even impact investors are often still too risk averse to tread.
The Shell Foundation — which has a $250 million endowment from the Shell Group but is run independently — has developed a successful funding model offering early-stage, patient capital to social ventures working on access to energy, affordable transport and small and medium-sized enterprises finance in Africa, India and Latin America, which would be deemed too high risk by the majority of investors and donors. Working with a team of 10 portfolio managers in London, and also through incubators like Factor[E] based out of Colorado State University, the foundation currently invests in 45 social ventures.
