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As the coronavirus pandemic intensifies, philanthropists are struggling to respond. Nearly the entire world suddenly has the same urgent needs: more and better diagnostic testing, personal protective and respiratory equipment, food supply support, and small business support, to name a critical few. At the same time, we are beginning to see huge systemic flaws in our national and global healthcare system that need to be addressed, both as the next phases of this pandemic play out, and before a future pandemic.
Entrepreneurs, both for profit and nonprofit, are pivoting to meet these needs, and they need funding now. Rapid response funding partnerships by philanthropic funders can be an important accelerant to green light work on these innovations and support entrepreneurs on the front lines of pandemic response. Grant and investment structures tested in the impact investment arena for the last two decades are well-suited (designed, in fact!) to facilitate critical new partnerships needed in this fast-changing landscape.
As legal counsel for Pam and Pierre Omidyar, I spent years (even before the term “impact investing” was coined) designing and implementing innovative philanthropic structures, including Omidyar Network, First Look Media, Humanity United, and the Democracy Fund. Today, I work with a range of high net worth individuals, social entrepreneurs and others who use both nonprofit and for profit vehicles, often in combination, to maximize their positive impact.
In response to the current pandemic, I am helping to get money flowing much more rapidly and to think through combinations of grants and investments. In some situations, funders prefer making an initial grant, then having language in the grant agreement allowing the grant to convert to a repayable loan or even equity in the company in the future (rather than making an initial investment in the entrepreneur).
Companies developing products and services critical to help us through the pandemic and its aftermath are facing urgent funding challenges.
Read the full article about rapid response funding partnerships by Will Fitzpatrick at the National Center for Family Philanthropy.