School Dropout Rates: How Private Equity Can Fund Education

"Public funding is becoming increasingly scarce."

French nonprofit organizations are facing an increasingly difficult challenge: supporting a growing number of beneficiaries while improving the quality of their work. This goal requires financial resources, even as “public funding is becoming increasingly scarce,” as Maurice Tchenio pointed out. According to a survey by the Federation of Solidarity Organizations published on October 8, 2026, 77% of the solidarity organizations surveyed reported a decline in public funding in 2025 or an announced reduction for 2026.

Doing More with Limited Resources

To continue their growth, nonprofit organizations have several tools at their disposal. The first is to increase productivity, particularly through the digitization of certain functions and the use of artificial intelligence, which can help them perform certain tasks at a lower cost. They can also rely on pro bono services, volunteer work, or support from major consulting firms, some of which offer their services for free or at discounted rates.

That leaves the question of funding. Faced with declining public resources, nonprofit organizations are turning to private funders. But competition to attract this capital is intensifying. To win support, they must now present well-structured projects with clear objectives and measurable results.

Maurice Tchenio cites the example of Entreprendre pour Apprendre, an organization supported by the AlphaOmega Foundation. Its “Mini-Entreprise” program, typically aimed at middle and high school students, was piloted with young people served by the Paris Local Mission. This pilot program improved their access to employment, which serves as a concrete argument to convince companies facing recruitment challenges to fund the initiative. “The more you’re able to develop programs that appeal to funders, the better your chances of success, ” emphasized the founder and president of the AlphaOmega Foundation.

How Foundations Can Grow Their Capital More Effectively

France has a considerable asset: its households’ savings, whose financial assets exceed 6,500 billion euros. But how can part of this wealth be channeled to support nonprofit organizations? According to Maurice Tchenio, three avenues are worth exploring.

The first concerns endowment foundations recognized as public-benefit organizations, particularly umbrella foundations. These organizations may have capital whose income enables them to fund their missions and the associations they support. However, their needs are growing, while their resources remain limited.

The problem stems in particular from the way their capital is invested. In France, foundations have traditionally favored liquid investments, primarily bonds and stocks. In the United States, large university endowments have long incorporated unlisted assets into their investment strategies. In 2025, they allocated, on a weighted average basis, nearly 30% of their assets to private equity and venture capital, according to NACUBO-Commonfund. In France, private equity still has a limited presence in the portfolios of many foundations.

To illustrate the performance potential of private equity, Maurice Tchenio cites a long-term annualized net return of around 13 percent, compared with about 6 percent for bonds, stocks, or real estate. Over a ten-year period, a 25 percent allocation to private equity could thus generate higher returns than the remaining 75 percent.

Another challenge is preserving capital value in the face of inflation. For foundations with an endowment that cannot be spent, the investment horizon is particularly long. Maurice Tchenio therefore encourages them to consider allocating 20 to 30 percent to private equity, depending on their liquidity needs. The goal is to increase the resources available to fund their missions over a ten-year horizon.

French Savings: A Source of Funding for Nonprofits

The second funding avenue is aimed directly at nonprofit organizations. Many of them currently operate on the donations they collect and spend each year. This reliance on annual fundraising makes it difficult to ensure long-term financial stability.

Maurice Tchenio therefore proposes developing endowment funds, financed by capital donations. Rather than reaching out to the same donors every year, an organization could ask them to make a one-time contribution toward building a long-term investment portfolio. The income from this capital would then supplement the organization’s annual resources and support its initiatives over the long term.

The third approach is based on shared-profit funds. This time, rather than asking investors to donate a portion of their assets, the idea is to offer them the opportunity to invest while allocating a portion of their earnings to a philanthropic cause.

Altaroc has already established three shared-profit funds. Some are aimed at investors who can commit at least one million euros and who agree to donate a portion of their capital gains. More recently, created a “Venture Philanthropy” fund, certified by Finansol, which allocates 25% of its capital gains to funding .

This approach thus makes it possible to achieve two objectives: seeking long-term financial performance and helping to fund organizations dedicated to education. These mechanisms open up an additional avenue for mobilizing private savings in the public interest.

Two Struggles for the Same Goal

Maurice Tchenio concluded his remarks by highlighting the two causes that drive his commitment: combating school dropout rates through the AlphaOmega Foundation and helping French people grow their savings more effectively with Altaroc. These two goals, in his view, go hand in hand: “The other simplest way to increase donations is to help French people become wealthier.”

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