Giving Compass' Take:

• Stanford Social Innovation Review lists four principles of venture philanthropy that every funder should follow to support meaningful projects, including building movement in stages and investing in people.

• One big takeaway here that can apply to any social investment or venture is to do due diligence. Have you committed enough time to research the area in which you want to make an impact?

• Check out this article to learn more about the nuts and bolts of venture philanthropy. 

An entrepreneur is a person with an idea, whether that idea launches a tech startup or a social change movement. But if you’re a venture capitalist or a philanthropic funder, how do you know which fledgling enterprises to back? From our perspectives from years in the California tech world and in social change philanthropy, we see four basic principles that guide successful investing in both situations.

Our first rule concerns the entrepreneur: Bet on outstanding people.

The Silicon Valley success stories are legendary: Steve Jobs’ meteoric rise with Apple and Mark Zuckerberg’s transformation of social networking through Facebook, for starters. There are similar iconic examples in global philanthropy. Take Leymah Gbowee, a Liberian activist who led a women’s movement to end her country’s 14-year civil war. Fed up with the bloodshed, Gbowee organized tens of thousands of women in 2002 to flood the streets and markets with peaceful sit-ins. After this grassroots effort succeeded in bringing the warring parties to the peacemaking table, she turned her attention to the fledgling democracy and started looking for funders to support her work to get women to the polls. In 2003, she sent a proposal to American Jewish World Service (AJWS), which Robert leads—an organization that supports 450 grassroots organizations in 19 countries working to promote human rights and combat poverty in the developing world. AJWS gave her nascent organization, Women in Peacebuilding Network, its first grant. Gbowee used the $12,400 to deploy 250 women in seven communities and registered more than 10,000 women to vote in five days.

Read the full article about the principles of venture funding by Terry Winograd, Jocelyn Goldfein, and Robert Bank at Stanford Social Innovation Review.