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Publicly funded D evelopment Foundations A Value Creation Circle put into practice

Publicly funded D evelopment Foundations A Value Creation Circle put into practice Lukas Wedemeyer. Field of the Best Practice. Development funds founded ( partly ) by the municipality of Kristiansand Competence Development Fund of Southern Norway (SKF)

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Publicly funded D evelopment Foundations A Value Creation Circle put into practice

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  1. Publicly funded Development Foundations A Value Creation Circle put into practice Lukas Wedemeyer

  2. Field of the Best Practice • Development fundsfounded (partly) by themunicipalityof Kristiansand • Competence Development Fund of Southern Norway (SKF) • Cultiva – The City of Kristiansand Energy Foundation (Cultiva)

  3. Core aims and objectives • Group of regional researchers and bureaucrats tried to identify • future key drivers of societal and economical development (1994) • Communications • Competence • Culture/arts • Cost intensive projects primarily controlled by national government • Defend public funds from short term political influences – local and national • Securing funds for long term development projects (eternity perspective)

  4. SKF - description • Public foundation – founded in 2000 by fifteen municipalities in the county • Funds raised from sale of municipalities shares in regional energy company • Real return is award grants (after building buffer) • Purpose • serve the counties inhabitants in the long term • by helping to raise the level of competence in the county • in order to secure and create jobs and good living conditions • Support granted to university level knowledge development by • public or private research/educational institutions • local authorities • public and private enterprises

  5. SKF - description • yield of -7.5% in 2011  • fund’s investing profile is similar to that of The Government Pension Fund • long term strategy, buffer capital has to be built up before funds are awarded • funds awarded even in years of negative yield fed by buffer

  6. Cultiva - description • Public foundation – founded in 2000 by the City of Kristiansand • Funds raised from sale of municipalities shares in local energy company • Real return is award grants • Purpose • serve the cities inhabitants in the long term • by fosteringinnovation, development and capacity building of creative environments in Kristiansand • in order to secure and create jobs and good living conditions • Support granted to projects aimed at • improving living conditions and creative development of children and juveniles • raising Kristiansand's attractiveness for families • establishment of art-, cultural- and knowledge-institutions

  7. Cultiva - description • Around same yield as SKF, but  • Focused on awarding of sizable fund already in early years • Initially too little focus on buffer capital - no funds awarded in 2012 • Change of funding, investment and buffer strategy

  8. Significant operational details Value Creation Circle¹

  9. Significant operational details

  10. Triple helix-model

  11. Institutionalized triple helix-model People Public admin. Foundations

  12. Used funding • The City of Kristiansand sold parts of its shares in the local energy company • As a result of strategical considerations by bureaucrats and researchers the profit was donated to the two foundations (Cultiva & SKF) • The foundations invested it in shares, obligations or property (modeled on the Norwegian pension fund) • The real return is after building a buffer used to award yearly grants (2-3 M€/y)

  13. Transferable elements • Preventing funds from absorption by day-to-day politics - donation to foundation - eternity perspective stipulated in statutes • Very farsighted underlying overall goal – different instrument to reach those –development strategy adaptable to changing societal chalanges • Actively foster triple-helix structures – through the foundations evaluation criteria • Business potential • Societal added value • Contribution to regional R&D or Competence Development Centers • Internationalization • Integration • Entrepreneurship & innovation • Network building • Co-financing • Additionality

  14. Innovative elements • Publiclyfunded Foundations • Advocacy not for individualinterestsbut for thepublicinterest • Comissionedresearch for thecorporategood not thegoodofcorporations • Implementationoftripplehelixmethodology in foundationsawardingpraxis • Fosteringself-fertilizingcircleofvaluecreation

  15. Evidence of success Institutional Kilden – Theatre- and concerthouse Noroff – University college Projects countless projects funded over the last 10 years by both foundations ~20 per year per foundation CSI Heidelberg calculated SROI far beyond 1 (1,7-2,2) for SKFs investments

  16. Contact data • For more information please contact: • Lukas Wedemeyer, lw@kristiansand.kommune.no, +47 907 31 476 • Competence Development Fund of Southern Norway • www.kompetansefond.no/english • Cultiva – The City of Kristiansand Energy Foundation • www.cultiva.no/english

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