Save the Children aims to raise $1 billion in innovative impact funding

November 06, 2024 at 11:28 AM EST

Save the Children Global Ventures is aiming to raise $1 billion in innovative impact funding in order to help carry out the charity’s mission of improving child health, education and welfare across the globe.

In an interview this week with Euronews on an episode of its “The Big Question,” Paul Ronalds, the founder and CEO of Save the Children Global Ventures discussed the initiative and how traditional private-sector techniques could change the finances of the charity sector.

“There’s a common misconception that impact investing means concessionary investing, and that’s not necessarily the case at all,” Ronalds told Euronews.

Save the Children Global Ventures has created the first in series of child-focused investment funds. Its decision-making integrates considerations of children’s rights and well-being across our investment processes to advance positive outcomes for children, Ronalds said.

The 11 businesses in Fund 1 focus mainly on education, technology and health.

For instance: One of the education businesses aims to reduce the growing problem of a shortage of teachers in sub-Saharan Africa. Using a handheld app, which can be sold to governments and school networks, to micro-credential teachers without formal qualifications, the idea is to retain teachers in that region and with a better salary.

“We don’t have any sort of silver bullets in international development but the closest thing we have is children’s education,” Paul explained. “Almost all children that start behind, stay behind. So if you can give them a good early childhood education, then often they’ll be very successful and the country will be very successful as a result.”

The first fund is a closed fund and is yet to mature. So far, some of the projects are looking to provide both significant impact and a good return for investors. While the projected returns vary greatly between each business, some of the most successful have already grown 600%.

Though there’s no retail products for your average person to invest in just yet, one part of Save The Children’s new approach is to work with sophisticated or institutional investors to encourage them into impact investing.

Another part of what Ronalds and his team do is called venture philanthropy. In essence, they take donations and invest them into businesses which align with their aims and any returns go back into the fund to be reinvested.

“That all gets revolved and that is in perpetuity. So long as we continue to make good investments, it should be there forever,” Ronalds said.

But there is a risk to investment and not everyone loves the idea of charities taking financial risks.

“Some of the investments we make will not be successful,” Ronalds said.

However, he added that he believes a re-education within both the charitable sector and more publicly needs to happen as, without taking risks, they won’t be able to make the sort of impact they need.

“If we start to make this sort of impact investing something that is just what most foundations, most investors, maybe even pension funds start to do, then we can have the sort of impact on our most significant global, social and environmental issues. We can solve poverty. We can address the capital needs.”

“So this is important for Save the Children but we also think it’s important for the charity sector,” he said.

Watch the full Euronews interview: