In a world of tremendous need, Legatum is selective in its investment approach. Each opportunity is carefully evaluated to maximise the impact we can make according to the following investment principles:
Community Based – Legatum prefers to support Community Based Organisations (CBOs) where local knowledge, families, and real demands can guide resource allocation better than the perceptions of outsiders.
The Multiplier Effect – Capital has the power to effect enormous life change and therefore its stewardship is a substantial responsibility. Legatum seeks initiatives where financial, intellectual and human capital can be multiplied.
Simplicity – From experience, solutions that are simple and understandable lead to the greatest impact.
Pathfinding – Legatum explores new ideas but employs time-tested approaches where appropriate.
Results – Legatum takes a results-oriented approach and rigorously monitors all its grant investments. Resources are reallocated from under-performing projects to those that are delivering results.
Sustainability – Commercial solutions are preferred wherever possible.
Objectivity – Although giving is inherently an emotionally rewarding and joyful experience, rigorous and objective analysis results in the most effective capital allocation decisions.
Social Return On Investment
For the past decade, Legatum has sought to understand the impact of its grant programme. Evaluating inputs into a project are easy, measuring outcomes is more challenging. Comparative analysis across sectors and programmes is notoriously difficult, but this should not be used as an excuse for not trying. Without metrics, it remains a challenge to identify the projects that are truly performing against a range of interventions. The Foundation therefore employs a Social Return on Investment (SROI) measure - the “Delta Score” – which helps to identify projects that are under- or over-performing and to make grant allocations accordingly. This is an iterative process which is only enhanced over time through repeated incremental innovations.