The elea Way - Preview

elea’s FOUNDATION AND OPER ATING MODEL

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recently, with the spectacular donations made by Bill and Melinda Gates and Warren Buffett into the Bill and Melinda Gates Foundation, and the subsequent public appeal for a billionaires’ “Giving Pledge,” has philan- thropy received higher levels of attention in public debates. This has led Professor Rob Reich at Stanford University to call for levels of regulatory and media scrutiny within philanthropy comparable to those that are applied to the public sector and the corporate world. In his view, a higher level of scrutiny would mitigate the risk of abuse by donors who gain sub- stantial influence by donating large amounts of wealth to philanthropic institutions. He also advocates that if philanthropy is properly structured, then it will support a strong liberal democracy (Reich, 2018). 9 At the time, we saw elea’s development very much within the context of the debate around an emerging “new capitalism” following the Global Financial Crisis of 2007/2008. Innovative trends, such as microfinance, impact investing, and social entrepreneurship, inspired elea’s thinking and nurtured its vision to realize its purpose by aspiring to be a role model organization with charisma in the field of entrepreneurial philanthropy. As a professional and active investment manager, we create measurable, long- lasting social impact and strive to be the partner of choice for social entrepre- neurs and philanthropic investors, as well as provide an attractive platform for ambitious, talented professionals (see www.elea-foundation.org). 3.2 Operating model This vision also defined elea’s operating model, which we will discuss now. While elea has the legal form of a tax-exempt charitable foundation, its operating model looks rather like an investment organization (see also [Wuffli & Kirchschl ä ger, 2017]). The model has three major components that mutually reinforce each other like a flywheel. At the core is philan- thropic impact investment management (the process of finding and opti- mizing investments). This is nurtured by a philanthropic investors’ circle, which refers to a group of personalities and organizations that enable elea’s activities through their financial and non-financial support. The third com- ponent is its professional development program, which describes the way in which elea recruits, motivates, develops, and retains its professional staff. As elea makes new, impactful investments, it reinforces the appetite of existing investors and attracts new philanthropic investors. Furthermore, a grow- ing capital base helps to win and fund its professional staff, which in turn is