Giving Compass' Take:

• This Newco Shift post examines the model of venture capital firms and how funding bold entrepreneurs (along with supporting operations costs) could benefit the philanthropy sector.

• While impact investing and venture philanthropy aren't new concepts, it's worth a reminder on why visionary grantees should get more attention. The general upshot here is that industry disruptors are worth the risk.

• Here's more on how venture philanthropy is bringing about social impact.


I was recently interviewed by a collaborating team from three high profile foundations/LLCs. Their primary question: “How do we find and cultivate more breakthrough ideas in education?

How might foundations better find and cultivate  —  or dare I say, invest in  —  the people to deliver this impact?

This question feels all too familiar from foundations today: a primary focus on ideas and issues, often at the expense of talent support and operational excellence. Grand challenges, RFP’s, and funder-borne calls to serve homegrown theories of change have established an unproductive power dynamic that stunts creative problem solving with grantees, inadvertently (and almost passive-aggressively) steering their efforts. Reporting requirements and restrictions on how dollars are to be used can be distracting, and even crippling.

Could foundations consider taking more of a portfolio approach, acknowledging that (and we all know this already) many of their grants simply won’t have the impact they hope? This would allow them to more realistically make bets while serving as a forcing function to failing organizations, and even drive constructive M&A activity in the sector — something much discussed and sorely needed given the sheer number of redundancies. Funders can and should use their leverage to move more nonprofits toward mergers.

In some ways, it’s the nonprofits that might be forcing the conversation with foundations. Nancy Lublin, one of the most successful nonprofit leaders and operators today (Dress For Success, DoSomething.org), decided to raise a round for Crisis Text Line like a tech startup would — her most recent one coming in at $25.5M, giving her runway for years. While this is extreme, it is illustrative nonetheless.

It seems there’s much left to be explored on what it really means to support nonprofit and other mission-driven grantee organizations.

Read the full article about foundation investment and venture capitalism by by Gabe Kleinman at Newco Shift.