Shell Foundation outlines new and successful approach to tackle global development challenges at scale
Report documents how “giving more than money” can catalyse real lasting change
Argues that much can be learned not just from success but also by sharing failure
Shell Foundation today launches its ‘Enterprise Solutions to Scale’ report which documents how the organisation has ‘catalysed’ the creation of new scaleable and sustainable solutions to key global development challenges. The report shares both the success and the failure encountered during a decade of deploying enterprise-based solutions to achieve scale of impact. The lessons are relevant given the poor progress towards the UN Millennium Development Goals.
Since 2000 Shell Foundation has pioneered an enterprise based approach that differs from traditional corporate philanthropy, which is based upon establishing new partners with new ways of working that from the outset target scale of impact and financial viability. By applying business thinking, models and disciplines Shell Foundation has created four strategic partners that are achieving scale. These partners work on markedly different issues – sustainable transport, growing small enterprises in Africa, reducing indoor air pollution and promoting ethical trade – but share commonalities around the difficulty of the challenge.
Shell Foundation has invested “more than money” over the past ten years in its efforts to achieve scale. In its inception phase, when Shell Foundation provided short-term project-based support to multiple not-for-profit organizations, 80% of its initiatives failed to achieve scale or sustainability either due to poor execution or to lack of market demand for the proffered products and services. Quickly learning from this experience, Shell Foundation changed its strategy to focus on co-developing new business models with new strategic partners, with the result that 80% of its funds have achieved scale and in so doing, leveraged an additional .2 billion in finance.
Chris West, Director of the Shell Foundation, said: “Achieving truly scaleable and sustainable outcomes is not easy. It takes a huge amount of time, investment and patience. In this report, we are not claiming that we have all the answers. But we have identified some common features underpinning the success of some of our partnerships. We have learned a great deal from both our success and our failure and hope that by sharing our experience, we can help others avoid making the same mistakes.”
The key findings of the report include:
The need to catalyse disruptive change through ‘Angel Philanthropy’ – In every instance where Shell Foundation succeeded in building partnerships that have achieved scale it has been with newly created entities that it has helped co-found, using new business models that it has co-developed.
The importance of building sectoral partners – catalysing large-scale change is hard and, whether with for-profit or not-for profit partners, requires providing “more than money” and takes time, patience and considerable investment.
Moving from subsidy to earned income – targeting financial viability means less reliance on aid, growth benefits more people and the accompanying innovation means the enterprises are able to provide customers with more affordable goods and services
Enterprise Solutions to Scale discusses the need to look beyond scale for wider system change. No matter how successful partners are at pioneering and scaling new enterprise-based solutions to development challenges, they alone will never fully address the un-served needs of the millions of poor people around the world.
Foundations and donors manage significant amounts of money. Yet finding data around comparative performance is difficult. By reporting failure as well as success Shell Foundation recognises the need for greater transparency in the sector, so that the value of wider lessons may be shared more effectively in the future.
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For more information, please contact Richard Gomes at Shell Foundation on 020 7934 2627 or Enda Joyce at hanover on 020 7400 4480.
NOTES TO EDITOR:
1. About Shell Foundation
Shell Foundation is an independent UK registered charity, established by Shell Group in 2000, that catalyses enterprise-based solutions to global poverty and environmental challenges. It pioneers sustainable business models that can be scaled up to improve the lives and livelihoods of billions of people across the developing world. To find out more visit www.shellfoundation.org
2. The Foundation’s four present strategic partners are as follows:
Embarq aims to improve the quality of life of people living and working in megacities in developing world through the implementation of sustainable solutions to urban mobility.
GroFinsupports the start-up and growth of viable small and medium enterprises (SMEs) in emerging economies as a means of enhancing sustainable employment and livelihoods.
Envirofitaims to achieve a significant long-term global reduction in indoor air pollution (IAP) through the market-based development, production and sale of high-quality, durable and improved cookstoves.
The Better Trading Companyacts as an ethical intermediary to help build sustainable supply chains that connect leading retailers and developing world producers