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The Power of Patient Capital: Bridging Finance and Philanthropy for Lasting Impact

Posted 17 June 2024 in EMpower News   |   Share

Just over a decade ago, I made the biggest professional decision of my life.  At the time, I was finishing an MBA and working on secondment with McKinsey & Co.  I received two job offers in a week – one was to continue in change management consultancy and the other was to work for an NGO. Often, I say that I chose the “wrong” one, but I promise it’s a joke. 

My career has since been a rewarding adventure, leading to my role as Deputy CEO of an organisation helping 10 million young people across 150 countries.  However, working in senior NGO roles gave me an insight into the challenges that these huge institutions face. With colossal teams and resources based in the global North, how could we prioritise lived experience and local knowledge in the countries in the Global South? And with complex structures comprising multiple offices that diluted the original intentions, how could we achieve genuine efficiency? I knew about EMpower before joining the organisation.  I loved the idea of two opposing worlds being brought together.  The hard-nosed, numbers-based finance sector brought together with the care, compassion and heart needed to help marginalised young people achieve their full potential?  It didn’t seem possible!

Now in my 5th year at EMpower, I can speak to how this is done and why it works so well. The structure, strategy and operating model learned from the finance sector are a different world to any other NGO I saw over more than a decade previously. The way EMpower uses patient capital to focus on long-term returns through 10-year relationships with our 165 grantee partners across 15 countries.  Non-dilution – instead of 6 (!) different offices being involved, there is one transaction and a transparent, visible link with our Program Team in-country.  Financial efficiency is guaranteed through our underwriting structure which means that 100% of your money goes to where it’s needed most.  And by backing our winners we ensure that organisations are able – not just to survive another year – but to truly thrive.

But all this would be nothing without the heart, soul, and programmatic expertise of our 18-strong Program Team, 95% of whom are based in our implementing countries. They understand the ecosystem within their region and how we can best channel support to young people to make the biggest difference. Last week, I witnessed the powerful synergy of finance and philanthropy firsthand when EMpower became the first NGO to present at the International Capital Markets Association (ICMA) in Brussels. This gathering of 622 firms from 68 countries included many existing EMpower supporters like Citi, Deutsche, Goldman Sachs, JP Morgan, MarketAxess, Macquarie, BBVA, Nomura, and Pictet. It made me realise that EMpower speaks to an audience that no one else does. This gives us a unique voice but also a responsibility to translate the learnings from the social sector for a business audience. We can help mainstream important themes: the importance of localisation; the need to move away from short-term outputs to focus on long-term partnerships; and the need for flexible funding rather than restricted contracts. At ICMA, the focus was on the flow of capital into investment markets, aligning perfectly with EMpower’s mission to bridge finance and local civil society. 

I took away a strong sense that it really matters how capital is invested into emerging markets like the ones in which we work.  It matters to take a holistic view – both for investors and for the countries alike. And mostly it matters about human capital – such as the incredible 165 grantee partners that are thriving because of the capital that EMpower invests, which of course is only possible because of our donors.

One standout example I gave on human capital was Abraço Campeão – an NGO founded by Alan Duarte in his hometown of Complexo de Almao, a favela to the north of Rio.  Alan’s journey from teaching a handful of kids boxing in a disused field to leading an impactful and mature organisation is incredibly inspiring. 300 young people every month from the favela—boys and girls—learn how to box, improve their self-esteem and attain more in their education and their lives.  EMpower was their first international funder, and it’s been a privilege to witness their growth and sustained impact. Their story is beautifully captured in a documentary that recently won the “Best Documentary Short” at the Tribeca Film Festival. You can watch it here

Stories like Alan’s, and the youth he supports, embody the transformative power of partnerships between finance and philanthropy. Through EMpower, the fusion of these two worlds creates lasting change, demonstrating the true potential of strategic and compassionate investment in emerging markets. Powered by resources, finance, and expertise from the finance world can profoundly transform the lives of young people at the margins, speaking to the power of a long-term approach. Or to put it another way—the power of patient capital. 

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