3 Finding Philanthropys Sweet Spot -- May 16, 2006 The good news Many types of organizations and individuals have goals that include accomplishing a social mission. Ted (and others like him) Nonprofit organizations Social service expertise Primary goal of achieving positive social outcomes Often financially constrained Social entrepreneurs Business expertise Creativity in developing double or triple bottom line solutions Hands-on role Foundations Can make grants and/or invest assets Varying degrees of non- financial support Well-positioned to strengthen non-profit organizations Socially-minded for-profit investors Financial return important Varying levels of interest in social return
4 Finding Philanthropys Sweet Spot -- May 16, 2006 The challenge With so many possible participants in the solution, how can resources be maximized – while still accommodating each entitys needs and limitations? Social goals Nonprofit structure Financial goals Desire for equity investment model Planning support Capital investment Social mission expertise Business acumen
5 Finding Philanthropys Sweet Spot -- May 16, 2006 Juma Ventures (nonprofit) The creation of Evergreen Lodge Each entity identified and played a role that matched its sweet spot. Farber Fellows Lee Zimmerman & Brian Anderluh General operating support Collateral for line of credit Capacity-building activities (e.g., financial systems, social outcomes measurement and analysis) Farber Internships and Fellowships The Phalarope Foundation Farber Internships and Fellowships Equity and debt investors Commercial loans Equity investments from private investors – both individuals and The Roberts Foundation (REDFs former parent) Evergreen Lodge (for-profit) Family-oriented hotel bordering Yosemite National Park Youth development program serving at-risk year olds from San Francisco
6 Finding Philanthropys Sweet Spot -- May 16, 2006 The result Evergreen Lodge is succeeding in meeting both financial and social goals. Financial/business performance Frommers Guide (2005) Favorite Over 90% occupancy throughout peak season $4M annual revenues, ~30% EBITDA On track to provide 15% return to equity investors Making first equity distribution of $300K this year Investors varied needs are met Social performance Four-part on-site youth program: –Employment and training –Individualized social service support –Outdoor recreation –Healthy residential community 12 youth internships each year, 50 youth served to date Successful transitions into adulthood for graduates, including significant increase in employability, wages, and stability
8 Finding Philanthropys Sweet Spot -- May 16, 2006 Lessons Different philanthropic investors have different sweet spots. When philanthropic investors identify, articulate, and develop their own sweet spots – as for-profit investors have – it creates new social and financial opportunities. Collaborations among philanthropic investors can generate creative and powerful models for affecting social change.