Greater Share offers an innovative approach to philanthropy under a private equity fund of funds structure. Investors in the fund donate between 50% to 100% of capital gains to NGOs in the education sector
- Greater Share offers an innovative philanthropic investment model, under a fund of funds structure, combining the expertise of private equity and high impact NGOs
- Its first fund, the Greater Share Education Fund, supports NGOs in the education sector. Investors donate between 50% to 100% of capital gains to NGOs, with all GP fees and carry also being donated
- Fletcher believes education is “too often the poor relation in the impact impact investing world”
Greater Share offers what it describes as “an innovative philanthropic investment model harnessing the expertise of the world’s top performing private equity funds and highest impact NGOs to solve complex global challenges”.
Its initial focus is the Greater Share Education Fund, a fund of funds product investing in a selection of top quartile private equity funds. Investors in the fund commit to donate at least 50% of any capital gains to educational charities and NGOs.
Founder Paul Fletcher tells Impact Investor: “I feel that education is too often the poor relation in the impact investing world.” His experiences in emerging markets showed him “the negative consequences of what happens when education is not readily available. I believe education is the most important element in building a better world, and it felt like an important place for me to be when I stepped down from Actis”.
Fletcher was a senior partner at global investor Actis until 2015. After leaving the company, he got involved in Teach for All, a global network of education NGOs which offers an accelerated teacher training programme in some of the most difficult schools, developing a leadership cadre.
“The genesis for this business came from what I saw sitting on the board of a number of not-for-profit organisations in the educational sphere. I observed that CEOs were spending a disproportionate amount of their time fundraising rather than delivering on their programmes. As a consequence, I began to be interested in fundraising. But then I also started to ask the question ‘what if we raised ten times that amount?’”
“I feel that education is too often the poor relation in the impact investing world.”Paul Fletcher, Greater Share
Fletcher adds that another issue which many educational charities have had in the past is “that funds seem to be provided in one-off grants which makes long term planning extremely difficult”. He also observes that there are “obvious limits to how much money people are prepared to give an organisation which can be used however the organisation wishes. People prefer to see their funds targeted towards specific projects”.
A new approach
These thoughts fed into a crucial turning point. Fletcher explains that the idea for Greater Share came about over a cup of coffee with Frédéric de Mévius, co-founder of purpose-led, growth investor Planet First Partners.
They then reached out to Graham Elton, from Bain & Company, for further private equity expertise, and also approached Jason Glover, from law firm Simpson Thacher & Barlett, for legal advice.
Greater Share states that its Greater Share Education Fund “supports NGOs whose missions align with a theory of change designed to address the key issues faced in education today”.
Fletcher explains that their crucial element in their theory of change is “to move away from a model just regarding the teacher as the only element in a child’s education”.
He explains: “Whilst the teacher is at the centre, there are a lot of other important actors who must be critically involved. Healthcare is obviously not employing the same model it did 100 years ago, but for some reason education does.”
Harnessing the “investment magic” of the private equity model and the talent of some of its smartest practitioners is also central to Greater Share’s model. “We are seeking to mobilise incremental philanthropy with a world-class investment structure. We have an investment committee which selects the best private equity managers that we wish to have involved.”
“Whilst the teacher is at the centre, there are a lot of other important actors who must be critically involved. Healthcare is obviously not employing the same model it did 100 years ago, but for some reason education does.”Paul Fletcher, Greater Share
The fund allows high-net-worth individuals to investment a minimum of $500,000 (€467,000) over a four-year period, with no maximum. “We offer individuals the prospect of a multiplier effect from investing their capital.” All general partner (GP) fees and carry are donated. The capital gains are shared between NGOs and Greater Share’s investors who have the choice of donating between 50% and 100% of their capital gains to chosen NGOs.
As well as an investment panel, Greater Share has an education committee that selects the most interesting education NGOs to be involved with. Fletcher says: “I feel we have a good selection there. I’ve got to know the CEOs of these organisations pretty well and they’re all outstanding teams doing excellent work.”
West London Zone is a good example of this. True to Greater Share’s theory of change, they focus on connecting a child’s support system, including families, schools and local organisations, to deliver a personalised 2-year support plan for each child. They work in West London, an area of high inequality “where 1 in 5 children and young people aren’t getting the support they need to thrive”.
Fletcher says that like the other organisations they work with, West London Zone has “a challenging set of social and economic circumstances for the children that it works with”. He adds: “It is clear that without intervention a number of the children will be severely disadvantaged for life. Their results are excellent, and the funding we provide helps significantly expand their footprint.”
Challenges and ambitions
Fletcher observes: “Whilst we are very comfortable with the reception that this idea has had, obviously the biggest challenge for us will be fundraising and we are at an early stage in that.” Currently, Greater Share’s founders are reaching out to their personal network and high-net-worth connections.
“Otherwise, we’re incredibly focused on living up to the promise of this concept and ensuring that every dollar invested is impactful.” With all the significant talent and experience involved in the Greater Share enterprise there is also a coaching element to what Fletcher intends.
“The successful scaling of each of the businesses we are involved in is going to be our most important challenge. We need to make sure that we are present, and that we are up to providing the help that is needed. Not telling the organisations what to do, after all they are all very well-managed, but being there with coaching and advice. We are there to amplify their story.”
Fletcher is keen to point out that their education fund is just a first step. “It is my ambition that other funds will follow, once we have demonstrated that this model works. For example, I could see us considering a fund in the climate change space. We are at the beginning of a long journey.”