Venture Philanthropy

What is Venture Philanthropy? Relatively New Largely Unproven Bold Change Investable Opportunity

What is Venture Philanthropy? Potentially powerful movement in grantmaking Seeks to adapt strategic investment techniques to the culture and needs of the nonprofit sector Serves as a complement to more-established philanthropic models.

What is Venture Philanthropy? Applies venture capital strategies to charitable giving Focuses on leadership, bold ideas and innovation, long-term funding and organizational development. Venture philanthropists, or donor-investors, help charities in ways other than just donating money. They work in partnership with the nonprofits they support, volunteering their expertise, contacts, and general business acumen.

Philanthropic Investment An action rooted in an individual’s or foundation’s generosity and altruistic concern to promote good or improve human quality of life that devotes, uses, or gives money, time, talent, emotional energy, etc., over an extended period of time, to gain social returns defined by a specific objective, purpose or result.

What is Venture Philanthropy? NOT JUST A FUNDER Strategic advisor Executive coach Change agent Board member Consultant

GRANTMAKING VS. PHILANTHROPIC INVESTMENTS Fewer, but larger, investments Still legally grants with no financial return More analysis and due diligence in selecting and understanding the nonprofits Investing in organizations and its leadership versus individual programs A horizon of three to five years (or even longer) Using the funds to build stronger, more effective organizations Being more outcomes-focused

What do Venture Philanthropists Do? Develop relationships Build trust with the people who run the organizations they invest in Provide management advice Help managers recruit the best executive talent. Make long-term commitments

What do Venture Philanthropists Do? They provide not only financial resources but also management assistance and other resources that for-profit executives have come to rely upon.

What do Venture Philanthropists Do? They feature relationships between the grantmaker and nonprofit partner that are more of an active, involved partnership than solely a funding relationship.

What do Venture Philanthropists Do? Their grants cover a longer time period than do typical foundation grants.

What do Venture Philanthropists Do? They focus on helping to build and strengthen organizations of their nonprofit partners, not on the development of new programs.

What do Venture Philanthropists Do? They help their nonprofit partners establish and track outcomes, and use this information as a basis for assessing the progress of their investments.

Who are the leaders in Venture Philanthropy? Venture Philanthropy Partners Edna McConnell Clark Foundation Case Foundation ‘Make It Your Own’ grant awards

Venture Philanthropy Partners Lessons from the First Five Years –Refocusing for greater impact –More money over a longer period –Trusted advisor –Unexpected Importance of a Regional Focus

How Venture Philanthropists work –Conduct research –Focus on particular sectors –Develop an investment strategy –Scans the environment to find those investments with the greatest potential for highest (social) returns –Define your own investment hypotheses