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February 13, 2008

Inspiring Scotland

The Lloyds TSB Foundation has announced a new initiative called Inspiring Scotland which it claims will attract an annual £10m of venture philanthropy to our Third Sector. This is welcome news although there is some unease that the initiative has been overhyped.


The announcement this week of a new initiative, to march under the slogan Inspiring Scotland, to invest between £70-100m in Scottish charities should help lift the spirits of a voluntary sector unsettled by the combination of a more restrictive public spending round and a new government with its own ideas about how to allocate public funds.

The fact that the initiative comes from the biggest single independent funder of the Scottish voluntary sector is an added bonus. Lloyds TSB Foundation for Scotland has earned a reputation as a sym- pathetic funder consistently responsive to the sector’s evolving needs and ambitions.

The publicity for the launch brands the initiative as an exercise in venture philanthropy. Charitable funding has its own fashions and venture philanthropy already has a slightly dated feel. It is often described as a product of the dotcom boom, as a wave of new American billionaires looked to reconnect with the social causes of their generation, and the collapse of that boom robbed it of some of its bloom. Whether the branding can with- stand the shock waves of the collapse of the dotcom boom’s successor in financial services is a moot point.

The well prepared supporting material which accompanies the launch provides an insight into Inspiring Scotland’s particular understanding of venture philanthropy. It is based on a strategic understanding of need -in this case the needs of Scotland’s 32,000 young people who are in neither work, training or education -and of the root causes of the problem. It involves a long term commitment of resources from a range of sources, from the charitable sector itself, the private sector and the public sector. The importance of government involvement is particularly emphasised ”as we’ll be able to deliver more for everyone by linking our work to local and national strategy”.

It will require the charities which it sup- ports to develop their structures and management processes to achieve long term sustainability. The development of sophisticated measures of success will be particularly crucial not least because it will “enable Inspiring Scotland to demonstrate its value to investors”.

Where will the annual £10m come from? There will be a modest contribution from TSB Lloyds Foundation itself. The Scottish Government has committed £3m annually for three years from its Enterprise and Learning budget. The balance of £6.5m is to come from other charitable foundations and individuals including presumably venture philanthropists. Without knowing how solid such commitments are it is impossible to ignore the precedent of another well publicised recent initiative, Project Scotland, which promised -and failed -to supplement a generous government commitment with equally generous backing from the private sector.

It is debatable how far Inspiring Scotland’s prospectus justifies the initiative’s promotion as an innovation in venture philanthropy. Its claim that it is the first initiative venture philanthropy to come from within the voluntary sector itself rather gives the game away. In fact the practical content of the prospectus reads more like a case for a strategic voluntary sector/government partnership led from within the sector but with private sector financial support and focused on maximising the long-term contribution of those voluntary organisations which can demonstrate most clearly the effectiveness of their approach. Anyone concerned for those missing 32,000 young Scots will wish the new venture success, whatever their scepticism about aspects of the promotion.