The new fund will provide long-term sustainable funding to non-governmental organisations that are working on bridging and closing the education gap.
Greater Share, a philanthropic investment platform, has closed its first fund for investors after raising $52m (€49.6m) from more than 50 individual investors and organisations across the world.
The platform said its fund will support eight NGOs that are working on greater education equity in underserved communities across the UK, the US, Colombia, India and Africa over the next decade. These include AllChild, London Early Years Foundation, National Institute for Student Success and Teach For All.
By 2030, more than half the world’s children will reach adolescence without the basic secondary skills required to thrive in today’s rapidly evolving workforce, according to a 2019 report by Unicef.
“Greater Share has a clear theory of change in the education sector, focused on transforming the way we educate children and increasing the availability and quality of their education,” Paul Fletcher, co-founder and chair of Greater Share, told Impact Investor.
The successful fund close “demonstrates that investors are prepared to subordinate investment returns when they are confident about the impact of their donations”, Fletcher said.
Private equity allocations
Founded two years ago, Greater Share is a fund of funds that invests in top-performing private equity funds on behalf of its investors. It partnered with private equity firms Bain Capital, Cinven, Hg Capital, Lexington Partners, Nautic Partners and Permira on its education fund. Its investor base comprises high-net-worth individuals and organisations, according to Fletcher.
Greater Share “presents a new way of making philanthropic investments, which is complementary to other education funds”, Fletcher said.
“The model works by investors donating half of their investment returns to Greater Share’s NGO partners, with the private equity firms also donating 100% of their fees and carry,” Fletcher said. “The donation of fees means that a tranche of the money raised has already been deployed across Greater Share’s NGO partners.”
“One of the most valuable components of Greater Share’s model is the way that it makes the money work,” said Graham Elton, chair of Greater Share’s investment committee.
“The world’s leading private equity firms are partnering with us to provide access to top-performing funds,” Elton said. “These generate returns for our investors, of which half, along with the funds’ fees and carry, are donated to our NGOs, creating a multiplier effect.”
This long-term funding model “enables the NGOs to do what they do best – create effective education models, transform communities, and scale their impact – without having to rely on resource-intensive incremental fundraising”, Elton said.
Educational crisis
The world is “facing a crisis in education today, with hundreds of millions of children out of school and even more without basic secondary-level skills”, said Liesbet Steer, chair of Greater Share’s education committee.
“Our NGO partners share our theory of change and represent education models that are child-centred and led by the community,” Steer said. “At Greater Share, we want to create a stream of unrestricted funding that NGOs can rely upon to make the long-term investments they need to drive systemic change.”
Fletcher said Greater Share plans to use its philanthropic model to support organisations working to address education as well as “other key global issues, such as natural capital”.
