Daniela Barone Soares: Impetus boss the business for charity sector

The Business Interview: Chief executive uses her City skills as a venture philanthropist

(BEN LANGDON)

Marathons tend to come with the territory for those involved in charitable organisations. Even those such as Impetus Trust, which hopes to shake up the sector with innovative methods from the private equity industry.

Impetus' chief executive Daniela Barone Soares has just completed her first, retracing the supposed steps of the messenger Pheidippides in Athens 2,500 years ago, although she laughs as she admits that she was "teased" into it.

The group is one beneficiary of a drive for 250 private equity professionals to raise €2.5m for various charities through the marathon, and as a former member of the industry herself, her former peers suggested she might want to put in the hard yards herself on behalf of Impetus. The donations are not Impetus' only debt to private equity. Using its strategies at a range of charities has brought seriously impressive results.

Private equity's image suffered before the crash, with critics of the worst excesses of loading companies with debt and slashing staff labelling the practitioners as "locusts". Ms Barone Soares said: "A lot of private equity firms became very tarnished, but the disciplines and the framework is still valid and the concept of leverage is fantastic. It multiplies the effect of what we have."

She continued: "It's a combination of strategic funding and management support, which is the secret ingredient. It also offers a lot of pro bono skills." For every £1 Impetus funds, it brings in £5 more in co- investment and the value of the expertise on offer.

Impetus looks to support organisations with a strong chief executive and that have already made a proven impact. "What we want to do is increase that impact. The plan is about taking a regional programme and asking 'can we scale it up nationally?' A lot of what we do is to perfect their business models, refine and codify them," she said. Impetus helps overhaul a charity's focus, its management team, cost controls and fund raising strategies.

Impetus was founded in 2002 by former Accenture partner Nat Sloane and Stephen Dawson, until recently the chairman of Ovum. It builds on the idea of "venture philanthropy"that developed in the 1990s over fears that funding to charities on particular projects did not result in a long-term social impact.

The company has invested in 19 charities of which, to use private equity speak, five have graduated from the portfolio. "They have achieved their objectives proposed and were in a trajectory of growth," Ms Barone Soares said. It looks for opportunities through consultation and referrals and is inundated with pitches from across England and Wales.

Impetus now has 17 staff and raised £3.8m last year. Ms Barone Soares is reluctant to forecast this year's figures, but said: "We are happy with the performance". This despite increased pressure on the charity sector following the Government's austerity measures. In times of recession, businesses have lower demand and subsequently lower sales, she said. "Charities have higher demand and yet lower income, so it is a challenging time. There is a lot of uncertainty and nervousness in the sector."

The Prime Minister, David Cameron, wants more services delivered through charities and sociable organisations. Ms Barone Soares said there was "good merit" in the idea. "These organisations know what they are talking about it and have been working there for a while."

Yet she added: "There is a risk that much of the sector is not equipped to deliver to such an extent. The charities already have a big burden and who knows what will happen with this 'age of austerity'."

Smaller charities and social organisations could lose funding, she fears. "There are lots that are incredibly innovative organisations that are bringing social solutions to the fore. It's about scaling them up to deliver more. There is a danger they will miss out on donations as people give to organisations they have heard of."

Despite being relatively small,

Impetus has attracted great interest especially from the world of business. Unsurprisingly, there has been support from the private equity industry, with backers including such grandees as Sir Ronald Cohen, Guy Hands and Jon Moulton.

Sir Ronald said: "In philanthropy as well as business, money alone can only do so much; it is money combined with skills and experience that achieve real impact. Impetus Trust is leading the way in creating lasting change through this strategic combination." Ms Barone Soares said: "A lot of private equity and business people get involved for two reasons. It resonates with them because it makes a lot of sense. You're funding them in the longer term, giving them skills and the trajectory of a plan."

Growing up in Sao Paulo, Ms Barone Soares was acutely aware of poverty and its effects, and traces her charity work back to when she was 12. "I've always been engaged that way. My plan in life was to make a lot of money and give it all away. How I was going to do that wasn't clear," she said. She quickly shelved a career in investment banking to move to private equity, which took her to London with BancBoston.

She joined the charity sector with Save the Children in 2004 after "jumping with my heart" – although adding that friends and family though she was crazy – and Impetus two years later, a seemingly dream fit. "When I went to Impetus I had the NGO experience and the private equity experience and it brought the two together. You could almost say I planned it, but I didn't, it was completely serendipitous," she said.

Impetus has started funds bringing together charities to tackle a particular problem areas. The first focused on re-offending, which currently costs the government £11bn a year. "It is a waste of human life, of society and of tax payers' money," Ms Barone Soares.

A series of organisations have sprung up globally with similar principles to Impetus and in the US, Barack Obama launched a Social Innovation Fund. Ms Barone Soares says the idea is becoming increasingly accepted, and has also advised the British Government. She sees Impetus' role as "breaking the cycle of economic disadvantage. We are looking for organisations that are intervening at critical points to get the people out, usually through education, skills and jobs. We want to attack the root cause of problems."

Daniela Barone Soares

1992-1995 Associate Citibank, Brazil

1995-1997 Harvard Business School MBA Graduate

1997-2002 Assistant vice-president, BancBoston Capital in the US and the UK

2003-2004 Executive director, Brazil Connects in the UK

2004-2006 Head of institutional support, Save the Children

2006-Present Chief executive of Impetus Trust

Interests

* After completing the 28th Athens' Classic marathon, Ms Barone Soares is not ruling out pulling on her running shoes again. "It was a thrill, it felt like a huge accomplishment," she said. "There are no immediate plans, but I wouldn't discard it".

* She loves poetry, citing TS Eliot, John Ashbery and Sharon Olds as her favourite English language poets. In her native tongue, Fernando Pessoa "is simply amazing". She has completed a book of her own poems and still writes.

* Ms Barone Soares also meditates every day and has been to India every year for the past 10 years to meditate. "I find it incredibly empowering."