In a recent Giving Compass article, New Profit’s Trevor Brown talked about the organization’s venture philanthropy approach to backing social entrepreneurs who are advancing equity and opportunity in America.
The piece was a good glimpse into the thinking and practice behind venture philanthropy, which provides social entrepreneurs who are developing promising models the same type of support that for-profit companies can access to grow. Yet it’s fair to ask: what does it all lead to, and how can philanthropists have the right expectations about what impact the approach will help them achieve?
There are no bite-sized answers to those questions, but New Profit recently gave Giving Compass a glimpse of the “investment exit memos” it shared with donors that provide color on how New Profit worked to build the capacity of grantee organizations over a four-year investment to help them grow their impact. This complements the work of other funders and supporters arrayed behind these organizations.
From New Profit’s latest investment exit memos:
- FoodCorps: Our targeted support for FoodCorps — a national organization that connects kids to healthy food — included strengthening board and executive team function and culture, providing advice on designing and executing FoodCorps’ first capital campaign, and helping build a new staffing structure designed for scale and systems-level change. When they joined the portfolio in 2012, FoodCorps was in 132 schools. Today, they partner with over 350 schools, spanning 159 districts in 18 states and Washington, DC. In the 2017-2018 program year, they reached ~159K students, 77% of whom were eligible for free/reduced cost meals and 68% of whom were students of color. On the systems impact front, the organization achieved major funding wins in the FY 2018 and 2019 appropriations bills leveraging $2 million for food education programs in schools. They recently launched a major multi-sector initiative to improve the school food supply chain with Bain Capital Double Impact.
- Management Leadership for Tomorrow (MLT): We provided comprehensive support to MLT covering board and leadership development, impact and growth strategy, measurement and evaluation, alumni network development and programming, and designing and deploying a growth capital campaign. While in the New Profit portfolio, MLT launched an evaluation to measure the impact it has on the 1,600+ young people it supports every year, which found that 86% of MLT undergraduate fellows (who are largely African-American, Hispanic, and Native American students from low-income families) land high trajectory jobs paying $50K+, compared to 7% of non-MLT minority students and 14% of similar income white students.
- Roca: With New Profit, Roca engaged in one of the country’s first and largest Pay for Success public-private partnership initiatives (the Massachusetts Juvenile Justice Pay for Success Initiative), which helped scale its model across Massachusetts. We helped Roca build organizational capacity for the initiative, providing support on leadership coaching, fundraising, board development, impact evaluation, and site expansion. Roca is now active in 21 communities across Massachusetts, and launched its first out-of-state site in Baltimore, MD.
- Turnaround for Children: We supported Turnaround in building a strong board and senior team, developing their first logic model and theory of change, executing a CEO transition, and setting the foundation for an aligned fundraising strategy. This past school year, Turnaround partnered with 20 schools and more than 100 principals in New York City, Northern California, and Washington, D.C., reaching more than 4,000 educators and the approximately 50,000 students they serve. School staff, as well as school and district leaders, are excited and inspired by the science of learning and development: 97% report the training they received from Turnaround is relevant to their work, 97% of teachers feel the material will increase their effectiveness, and 93% of leaders plan to work with their staff to apply the learning to improve school practices.
These are glimpses into what venture philanthropy can look like when its put into practice at the individual organization level, and the work and results offer a window into the investing ethos that New Profit employs. Here is how you can embrace that same mindset:
- Think of how you can be a builder rather than a buyer. Rather than thinking of your philanthropy as “buying” programmatic outcomes, think of how you can invest your philanthropy to help build the capacity of the organizations, teams, and boards that are behind the amazing programs you believe in and want to see thrive.
- Invest multi-year, unrestricted funding to make that organizational capacity building possible. Organizational leaders know best when it comes to determining how to allocate their budget towards building the most effective organizations and high-impact programs. Providing unrestricted capital allows leaders to invest money in high-leverage areas, often outside of programs, which are critical to preparing for growth and scale. Multi-year grants also allows organizations to plan longer-term investments against their strategies.
- Take a long-term, systems view when thinking about outcomes. Every organization has its own way of thinking about how it wants to create change in the world, and often, that change is complicated and takes real time. Rather than focusing on short-term outcomes which can pigeon-hole organizational leaders into thinking short-term themselves, enable them to think about the long-term, systemic change they want to have by not requiring them to have all of the outcomes you may want to see in just a year or two.
Original contribution by New Profit.
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