Peter, Chairman of the Jazi Foundation and PCG Investments, started engaging in philanthropy very early on in his career. After a while, however, he became aware that his ‘helping’ was not very effective and he needed to change the way he was investing in change.
How did you get into impact investing? What was your journey?
Actually very early on, in my career as an entrepreneur and ‘traditional’ investor, I engaged in philanthropy. I started to travel around the world for work and became continuously exposed to poverty. This led to one of my first projects: an orphanage in Durban, SA, as well as projects in Ghana and Uganda. After a while, however, I became aware that my ‘helping’ was not very effective and I needed to change the way I was investing in change. In the meantime, I had also become involved in inspiring initiatives at home, advocating socially responsible entrepreneurship, which I implemented in all my work. Over time, however, I started to apply a total portfolio approach.
Can you tell us more about this approach?
The total portfolio approach means you don’t have different ‘buckets of money’’ (‘potjes’): you use your whole capital to maximise your net impact. Of course, you can use filters and have preferences, but in principle, it could mean you invest in a multinational and use the returns to fund effective philanthropic projects with high impact, if that would indeed be the best use of resources to create the most positive outcome.
And what about effective philanthropy?
Effective philanthropy is essentially about being rational with your giving; using careful reasoning and having maximum impact as a goal. Philanthropy is too often embarked on from an emotional point of view. Of course, emotion is great, but the problem is that it can make us forget some of the goals of giving; namely to create lasting change and to make something work independently to us. Many philanthropists (including me at times) want to be around too much, they try too hard, and don’t connect to the beneficiaries on equal terms. This robs them of their independence and responsibility; the exact things that make an initiative flourish. Most importantly, effective giving means focusing on big problems, with promising solutions. Especially those problems that might be neglected by other funders.
How do you see philanthropy and impact investing interact or best complement each other?
To me, they are tools, not goals. My goal is to invest for maximum impact. Sometimes it makes more sense to do this through impact investing and other times it works better through effective philanthropy. Both are a means to an end and neither is ‘good’ or ‘bad’. I believe we need to use research, evidence, and careful reasoning to go about achieving the best results.
Is it possible to ‘save’ the world?
If we consider the data from the last 40 years, a lot of things have improved significantly. Yet, the way we are currently doing business is driving climate change and other risks, meaning the world is potentially going to look pretty bad in 2050. Still, I do believe we can make choices today to make that future look better. I am a member of networks like PYM and TONIIC to help accelerate this and I ardently support projects like The State of Youth (KidsRights), which aims to empower the youth community by building a non-political, non-religious digital ‘state’ that transcends borders. There is a lot we can do, if we all take more responsibility and increase our actions.
What advice would you give a starting (impact) investor?
I would recommend focusing on the net impact of their actions and being open-minded about choosing the right tools to achieve impact.
What are you most passionate about changing/ solving?
I am not passionate about one thing: I am passionate about change itself. There are many things that need solving but in the end, I believe your impact is defined by how much net ‘good’ you have done with what you have. All of us can strive to have more impact.
What recent trend are you excited about?
I am an ambassador for pro-veg so I’m very pleased to see how many plant-based products are being created and invested in, on the small and the large scale, like Unilever buying The Vegetarische Slager. This movement is great but we cannot expect consumers to know everything about the products they buy or fully rely on philanthropists/ impact investors alone to support products of change. We need producers to take responsibility for the processes and governments to help educate us. Only then will things really shift. For example, Bill Gates invested a lot in health in Africa, but he also came to realise that working together with governments multiplied the impact. And many philanthropists have financed initial medical breakthroughs, which were then brought to scale by the market and governments. Collaboration is key to enacting true change. Everyone should be invested.