In 2005, John Stone co-founded the Stone Family Foundation, following a successful career in financial services.
Since then, John has donated over £100 million to the Foundation, of which more than £72 million has been given to charitable causes across Africa, Asia and the UK.
A: My business background has always been in the financial services sector. I became the main owner of a UK wealth management firm in 1984, after leading its acquisition through an MBO.
After four years, I sold the firm and in 1991 and started a new pan-European business. This was acquired in 2005, as a result of which I had more money than I had ever dreamed of.
My then wife and I sat down to discuss our future. We weren’t interested in a lavish lifestyle and we didn’t think we’d do any favours to our children if we left a fortune either.
At that point, you ask yourself what the other options are. It becomes apparent that the only thing left is to use the money to improve the lives of other people.
So, we set up Stone Family Foundation to do exactly this.
A: When we started our Foundation, we didn’t have specific causes in mind.
So, we did what I would suggest anybody in this situation should do – we took advice. We spoke to an advisor from New Philanthropy Capital who asked us a lot of questions:
She took our answers away and drew up a wonderful pilot portfolio of 10 charitable causes for us to invest in.
The plan was for us to meet each organisation and get to know their work. Then, if we were happy, make a donation to each and track their progress.
Once the projects were up and running, we went to visit them all. The good news is that none disappointed; they had all been incredibly well researched.
We ultimately decided to focus predominately on water and sanitation, where we felt we could have the greatest impact.
At the initiative of one of our children, we also set up a portfolio in the UK which addresses both mental health issues and disadvantaged young people.
We occupy a unique position in being able to provide risk capital to catalyse pilots schemes. Our role is to help initiatives go from ‘pilot’ to ‘scale-up.’
Once an enterprise successfully scales-up, the risk for larger funders has been mitigated. At this stage, we attract risk-averse funders with deeper pockets to replace us.
In terms of approaches, we provide whatever funding is appropriate for the situation. This varies from grant-funding, to debt, to equity.
One of our biggest successes was to develop the first ever Development Impact Bond alongside U.S Aid. For this, we provided the capital upfront to begin a development programme. As the programme’s targets were achieved, our capital was paid back by U.S Aid.
The idea was to enable a large funder to pay for a development programme without taking on risk. It was a ‘no win, no fee’ approach for a risk-averse funder, because Stone Family Foundation would have underwritten the cost, should the programme have failed.
We also fund other projects through Royalty Revenue, where the percentage of repayment is based on the revenue of the project, rather than on fixed interest rates.
In some cases, people have a particular cause they are keen to support, and that’s great. They can pursue the cause, speak to charities and carry out due diligence on their own or with a partner organisation.
But for those who don’t know what they want to fund, the simple answer is to take advice. Take advice from professional philanthropy services and take advice from peers who have gone through the same journey. Learn about their successes, their failures.
There are many people in my position who are quite happy to spend an hour or two with others to help guide them on their journey. It’s all about taking the first step to get the ball rolling.
The Beacon Collaborative