The conventional sequence of wealth and giving is familiar. An entrepreneur builds a business, accumulates capital and, later in life, places part of it in a foundation that distributes grants. Michael Macfarlane suggests on Wealth Office that the sequence may be changing, with some founders using their networks, expertise and companies to generate impact directly. Howard Bilton, founder of the Sovereign Group, is a clear example of that shift, and his account of the Sovereign Art Foundation reads as a practical design brief.

Start with leverage

Bilton's starting point was a budget. He had a sum in mind that he could afford to give each year. Instead of donating it, he decided to use it to build something that would produce more than the original amount.

So rather than donating a fixed sum, I wanted to use the sum that I had in mind and could afford to create a business which would generate more than that sum.

— Howard Bilton, Wealth Office

He is equally clear about the test that follows. If the operation does not generate more than it consumes, he says, a donor may as well write cheques, fund programmes and let someone else carry the infrastructure and expenses.

And it only makes sense to do it the way I'm doing it if you're generating more than you're spending.

— Howard Bilton, Wealth Office

Asked how large the multiplier is, Bilton answers that it is double. That is the target and, he says, the foundation achieves it. Macfarlane points out that the financial figure leaves out a set of less measurable gains, such as exposure for artists, volunteers who join the programmes and greater awareness of art therapy among those who attend the events. Bilton agrees that these peripheral benefits exist, while noting that they cannot be costed.

Align every party's interest

The mechanics are what make the leverage possible. The foundation runs three professional art prizes. Bilton corrects Macfarlane's assumption that they serve emerging artists. They are aimed at established artists who are well known in their own countries but not yet internationally, because artists with global reputations no longer need prizes. What the foundation offers them is an international platform, a sales channel and buyers they could not otherwise reach.

The economics follow gallery practice. The artist receives 50% of any sale, as they would through a gallery, and the foundation takes the other half, which funds the charity. Galleries occasionally object to losing a sale. Bilton's argument to them is that a finalist's raised status and prices will bring years of further sales. Most, he says, are supportive.

Buyers are offered something different from a request for a donation. Bilton presents the purchase as an opportunity to invest in a piece of art that will give pleasure for years, knowing that the gallery portion helps disadvantaged children. The ideal, in his account, is a purchase with a donation on top. Each party receives something it values, and the charitable outcome sits inside the transaction.

The Sovereign Group supplies the remaining ingredient. Macfarlane notes that the company contributes people and intellectual capital at no additional cost to the foundation, and Bilton confirms that this is the only way the model could work across the 13 countries where it operates. Wherever Sovereign has an office, the local team runs at least a schools art prize, which raises awareness of the foundation and encourages children to take up art.

Be clear about the purpose

A well-designed ecosystem can serve several groups, and Bilton is candid about which one comes first. Many people assume his primary aim is to help artists. It is a welcome by-product. His primary aim is to help disadvantaged children who cannot help themselves. He accepts, however, that the two are inseparable: without a world-class prize that serves artists, there would be no great art, no sales and no funding.

That clarity also shaped how the foundation was built. Bilton describes the process as haphazard. He and his co-director Tiffany Pinkstone came from outside both the art world and the charity sector and learned on the job. He talked to many people, refined the idea and found that much of the advice was contradictory. Within a year he decided to fix the model and proceed, on the basis that those offering advice had often never done it either. Treating the foundation as a business with a charitable outcome allowed him to make sensible commercial decisions without second-guessing each one.

The therapy itself is not a soft outcome. Bilton describes the foundation's first project, in Cambodia, supporting children who had been abused and who would draw or paint experiences they would not describe. Twenty years later, many have rebuilt their lives and some have returned as teachers. A three-year study by Hong Kong University, carried out for a funding application to the Jockey Club, recorded what he calls dramatic improvement.

Plan for the system to outlive its founder

The final element is durability. Macfarlane observes that a resilient core business, growing steadily, gives the foundation a reliable source of people and capital. Bilton accepts the responsibility that follows. Children rely on the therapy and the programmes rely on the foundation, so the system must continue whether he is around or not. He says the question is now being addressed, after years in which the foundation was still developing.

For principals considering a similar route, the lessons are practical. Start with a defined budget and a clear leverage test. Design incentives that give every participant a reason to take part. Keep the primary purpose explicit. Draw on the operating business for skills, and plan early for continuity. Bilton is open that his model grew from his own circumstances. For a founder who wants each pound given to do twice the work, it is a route worth studying.