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Creating Honest Conversations Between Nonprofits and Funders: An Interview With Eric Weinheimer

Eric WeinheimerIn today’s Social Velocity blog interview, I’m talking with Eric Weinheimer, President and CEO of Forefront, the only regional association that represents grantmakers, nonprofits, advisors, and social entrepreneurs. With 1,100 members in Illinois, Forefront provides education, advocacy, and research, and mobilizes its members around issues that are important to the nonprofit sector.

Prior to his current role, Eric was the CEO of The Cara Program, a nonprofit that provides comprehensive training, job placement, and support services to individuals who are homeless and struggling in poverty. Eric was selected as a member of the Emerging Leaders Program for the Chicago Council on Global Affairs and as a Chicago Community Trust Fellow. He was also appointed by Illinois Governor Pat Quinn to the Social Innovation, Entrepreneurship, and Enterprise Task Force. He serves on the Advisory Board for the Social Enterprise Initiative at The University of Chicago Booth School of Business and on the Board of Directors for the Oak Park-River Forest Community Foundation.

Nell: Forefront is the only statewide association that has both nonprofit and funder members. How does Forefront deal with the power dynamic that is so often present between grantors and grantees?

Eric: Forefront talks explicitly about the power dynamic in much of our programming and classes, specifically our annual Grantmakers Institute for new program officers. We have candid conversations with these grantmakers and present actual case studies to give them a better understanding of their power and unique position. We also discuss how others perceive them and their roles, and how those perceptions can impact their effectiveness.

Forefront also has a non-solicitation policy that prevents nonprofits and grantmakers from discussing specific requests or proposals with each other when they gather at Forefront. The spirit of that policy also extends to how we bring grantmakers and nonprofits together. When nonprofits and grantmakers meet at Forefront, there is an explicit goal or purpose related to an issue in their fields or in the sector. While the power dynamic still exists, putting the focus on a larger purpose rather than on money helps our members build trust, leading to more genuine and balanced relationships. We also make sure that grantmakers and nonprofits co-chair some of our affinity groups to ensure balanced perspectives.

Nell: One of Forefront’s biggest initiatives is Real Talk about Real Costs, a series of funder and nonprofit convenings (the first in the nation) to talk about funding the full costs of nonprofit organizations. What have you learned through this series both about how to encourage more effective conversations between nonprofits and funders and about how to better support strong nonprofit organizations?

Eric: In the conversation on Real Costs we’ve learned that it’s not about creating another resource or a toolkit. Its not about what grantmakers or nonprofits should or should not do. Rather, it’s about starting an honest conversation. There are so many grantmakers and nonprofits that haven’t had the opportunity to dig in and engage with this work, either independently or with feedback from their counterparts. Our value-add is to catalyze these conversations. Forefront’s role is to create the space for honest dialogue, mobilize our members around this issue, promote best practices, and curate and share the newest research. It’s a slow and gradual process, but it ultimately leads to change in awareness, understanding and behavior.

Nell: How far do you think the national social sector has come in terms of more effectively supporting strong nonprofits and building more transparent and effective funder/nonprofit relationships?

Eric: We’ve certainly made some progress in the last 15 years, but we have a long way to go. It’s encouraging to see more funders express interest in general operating support and capacity building. However, too often, funders’ still feel the need to be in control and prescribe certain solutions rather than engage communities for their feedback and ideas.

Likewise, nonprofits have become more transparent, but they are still too reluctant to admit to challenges or failures because of possible consequences to their funding. Funders could model this practice for the nonprofits much more than they currently do. Funder transparency is only in its infancy.

Nell: Your national counterpart, Independent Sector — a national membership association of nonprofits and funders — had a recent change in leadership with Dan Cardinali taking the helm. What would you like to see Independent Sector doing to move this work forward on the national stage?

Eric: Dan is terrific – smart, experienced, strategic and passionate. He will do a great job. Under his leadership, Independent Sector (IS) has a real opportunity to be the connective tissue for our sector and elevate the good work that is happening around the country. I would encourage Dan to focus on a few of the critical issues facing our sector, both internal and external. Whether it be real costs, transparency, the power dynamic, or policy and advocacy, IS can highlight and amplify where real progress is being achieved and help to transport those examples to other locations. Once new practices take hold in certain geographic locations, other regions will follow suit. Organizations are eager for strong leadership that informs, inspires and mobilizes them to action.

Photo Credit: Forefront

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Planning for Nonprofit Success: An Interview With David Grant

In this month’s Social Velocity interview, I’m talking with David Grant.

David is the former President and CEO of the Geraldine R. Dodge Foundation and past chair of the Council of New Jersey Grantmakers. He now consults nationally with nonprofits, foundations, and schools and is the author of The Social Profit Handbook: The Essential Guide to Setting Goals, Assessing Outcomes, and Achieving Success for Mission-Driven Organizations.

He is also a member of the Leap Ambassadors, a 100+ community of nonprofit thought leaders, progressive funders, policy makers, and instigators who believe “performance matters.”

You can read other interviews in the Social Velocity interview series here.

Nell: Your book, The Social Profit Handbook, is about assessment, but your central chapter is titled “Mission Time.” Is this akin to the time spent on research and development in for-profit companies?

David: Yes, it is. I would compare it to any time set aside for strategic thinking and reflection on what we are learning from experience. I invoke Steven Covey’s famous Urgent/Important matrix and equate mission time with “Quadrant II,” where we deal with important matters when they are not urgent.

Effective nonprofit leaders often think strategically. The case I make for mission time in my book is that this should be an ongoing collective exercise. I believe there should be more time set aside for staffs and boards, singly and together, to be much more specific about what success will look like for their organization, so they can plan backwards from that shared vision.

I think it’s the most important practice nonprofit organizations can adopt if they are serious about getting better at what they do – which is creating social profit. At its best, I think mission time also includes the voices and perspectives of the people being served by a nonprofit organization. Can you imagine a company conducting R&D without checking in with clients and customers?

Nell: “Planning backwards” is another phrase you use frequently in the book. Is that what you are saying should happen during mission time? And if this practice is as important as R&D is in the for-profit sector, why don’t we see more of it in the social sector?

David: Those are great questions. Let me start with “planning backwards.” I see this phrase as critical to the practice of formative assessment – the kind of assessment whose purpose is to improve performance, not audit it or judge it. I think too many of us view assessment as summative; we think it comes at the end and that somebody gives us a grade. The central argument of my book is that when an organization takes assessment into its own hands, embraces its formative purpose, makes time for it and gets good at planning backwards, they not only improve their workplace culture, they go much further towards fulfilling their mission. In short, they create more social profit.

But here’s where the challenges of assessing and measuring success come in. If you describe what matters most to you – things like increasing a young person’s sense of hope and confidence; improving relationships and building trust between former adversaries; inducing an aesthetic response through great art; inspiring a long-term commitment to equity or a healthy environmental – people say, “You can’t measure that.”

What they are really saying is, “there is no standard unit of measure that applies to that.” Ok, fair enough – that’s why we need to get good at qualitative assessment. We need to be able to respond with confidence, “If you can describe it, you can measure it.” That’s why I spend so much time in my book talking about qualitative assessment rubrics as effective tools for this process. The rubric invites us to describe as specifically as possible along a spectrum what we mean by success, in relation to our criteria for success. It is as if we were creating the test we want to give ourselves a year from now, and we can plan backwards from how we want to score on that test. You can see how that can’t happen without mission time.

Your other question about why we don’t see more mission time, more planning backwards, and more rubrics in the nonprofit sector is one I think about a lot. I don’t think there is a single answer. Part of it is mindset – we tend to focus on programs and direct mission-based actions in the world instead of on building strong organizations and internal practices. Part of it is resources – we are stretched so thin that it is hard to get out of a mode of urgency. Part of it is our habits – we are used to certain kinds of meetings that often don’t make enough room for group education, reflection, and decision-making. Part of it is funding patterns – donors prefer program support to general operating or infrastructure support.

Ironically, I believe mission time and planning backwards make their own cases. But we have to take the time first in order for the case to be made.

Nell: In your previous role as CEO of the Geraldine R. Dodge Foundation, you launched a capacity building initiative for your grantees. What results did you see from doing so and what do you think holds other foundations back from doing something similar?

David: It’s interesting you should ask that this week, because even though I’ve been gone from the Dodge Foundation for seven years, I just saw something I would attribute, at least in part, to those capacity building efforts. I was working with a national gathering of arts service organizations, and we were examining several of their strategic plans to see how they addressed the concept of sustainability. The first two defined it narrowly as financial stability. But then a New Jersey-based organization, a long-time Dodge grantee, defined it holistically, citing elements of governance, human resources, assessment systems, and ongoing capacity building as critical to sustainability, in addition to maintaining financial vitality. I don’t think it was a coincidence that this organization, alone among this national group, had just completed a successful, million dollar capital campaign.

I remember when I was still reading proposals that the groups that participated in our capacity building workshops were much clearer about what they were trying to do, more straightforward about the challenges they faced, and more cognizant of their own needs as a vehicle that carried the pursuit of their mission over time.

What holds foundations back from capacity building? Well, I imagine some might feel it is too indirect as a social investment; others might worry this kind of support carries with it a promise of ongoing funding. All I can say is that I think Dodge got more bang for our bucks in this part of our funding portfolio than in any other.

Nell: One of the projects you are working on is Artists Thrive, which is about developing assessment tools for the arts. What are the goals of this project and how could it be a model for other social issue areas?

David: The Artists Thrive project is the brainchild of the Emily Hall Tremaine Foundation in New Haven, CT and its grantees. It started with creating an assessment tool for those who work with artists – essentially the grantees in Tremaine’s program called “Marketplace Empowerment of Artists.” But it quickly expanded to consider a much larger system and asked: “What would it look like to have thriving artists in thriving communities?” and “Who would need to do what to achieve that vision?”

A group of six arts leaders have been running with these questions for over a year, with me in a support role. We have launched a series of rubrics, with the spectrum of success defined from bottom to top as “Artists Give Up,” “Artists Struggle,” “Artists Survive,” and “Artists Thrive.” The initial rubric, as I said, looked at the mental models and the actions of those who work with artists. The second looked at the range of attitudes and actions of artists themselves. The third will be for funders, describing how different philanthropic practices affect artists and their communities. Those are the front-line players, so to speak, but we plan to look at how others can contribute to the realization of the thriving artists/thriving communities vision as well – mayors, corporate leaders, planning commissions, educators, etc.

As far as models go, I think we already have some fantastic models of rubrics that deal with issues on a national scale, like the Whole Measures for Community Food Systems, which I describe in my book, or more recently, the Whole Measures for Urban Conservation (2017), which is described on The Nature Conservancy’s website..

Nell: Our country is currently divided along many lines, however in your work as a consultant you often lead groups made up of people that bridge these divides in order to create change in their communities. What are some examples of change you have seen recently in your work? And more broadly, what gives you hope in these challenging times?

David: I wish I were doing more of the kind of work you mention. In fact, I had this fantasy during the 2016 primary election cycle that one of the candidates would brandish my book on stage during a debate and say, “What this country needs is a good rubric!”

But I did see an exercise in cooperation recently that I found really heartening. It was in Delaware, where members of the Delaware Alliance for Nonprofit Advancement (DANA) and the Delaware Grantmakers Association (DGA) created a working group to write a rubric titled, “Grantmaker and Nonprofit Relationship for Creating Community Impact.” The title identifies their shared purpose — why their relationship matters.

The DANA/DGA draft rubric evokes a spectrum of performance (the columns of the rubric) in four short words: “Transactional,” “Engaged,” “Partnership,” and “Transformative.” As far as criteria to be measured along that spectrum (the rows of the rubric), the task force went to the critical dimensions of the relationship: the Alignment of beliefs in the purpose of the relationship; the Mutuality of feeling about its importance; the levels of Trust and Transparency in their interactions; and the quality of their Communication. Given that structure, it is no surprise that the draft rubric is both honest about disappointments and aspirational in its description of the possible.

This is an example of what gives me hope whenever I see it – systems thinking. As David Peter Stroh writes, “In conventional thinking, in order to optimize the whole, we must optimize the parts. In systems thinking, in order to optimize the whole, we must improve the relationships among the parts.” It strikes me that at the highest level of the DNA/DGA rubric, it will not be just a relationship that has been transformed; it will be the State of Delaware. All from carving out the mission time and learning how to use it!

Photo Credit: Social Profit Handbook

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GEO Guest Post: Bringing Equity to the Forefront in Grantmaking

trista harrisNote: As I mentioned last week, I am at the Grantmakers for Effective Organizations conference this week curating a group of bloggers. Next up is Trista Harris, President of the Minnesota Council on Foundations. Her guest post is below. And don’t forget you can also follow the conference from afar on Twitter #2016GEO.

Day two of the 2016 GEO National Conference was all about bringing equity to the forefront in Grantmaking. Two of the morning short talks really stood out for me:

Here’s some of what they covered.

Isaiah Oliver told a heartbreaking story about how the Flint water crisis is impacting his family directly. He said “I trusted those that said the water in Flint was safe, so I gave it to my babies. My little girls should not have to analyze public water. What if this was your child?” The EPA has said that 15 parts per billion is a safe level of lead in the water; two weeks ago there were houses in Flint that had 11,040 parts per billion. Isaiah said that “if a house is on fire, you need to get the people out and then worry about blame later.” We have not yet gotten all of the people out of the fire.

Alicia Garza said “Hashtags don’t start or sustain movements, people do.” Philanthropy is not prepared to support fast moving movements. Our structures and processes have created a situation where celebrities have given more to #BlackLivesMatter than philanthropy has. She made two critical suggestions to address this issue:

  • Philanthropy should get money to change agents while change is happening. Fund movements to fail fast and learn quickly from those failures to innovate their strategies.
  • Structural racism exists in philanthropy, and grantmakers should develop strategies to get out of the way of social movements.

The lunch plenary started with the powerful video below from PolicyLink (you can also see the video here).

Then there was a panel on Equity as an Effectiveness Imperative.

Michael McAfee, of Promise Neighborhoods Institute at PolicyLink, when given the chance for closing remarks at the Equity as an Effective Imperative plenary luncheon, said “I love all of you.” That may strike those not in attendance at the 2016 GEO conference as an odd thing for a speaker to declare to a room of 900 funders, grantmakers and organizational leaders, but in context it perfectly summed up the message of the collective speakers. For equity to truly be a part of the work in philanthropy there must be equal parts discomfort and love throughout all conversations and collaborations.

In addition to McAfee, the panel included: Minnesota State House Representative Peggy Flanagan, CEO of Meyer Memorial Trust Doug Stamm, and moderator Reverend Starsky Wilson of the Deaconess Foundation. Each of the four speakers brought a vulnerability to how they shared their personal and professional experiences with racial inequities in the philanthropic sector. And this created an open and connected space in the ballroom.

Wilson made it clear from his opening remarks that the plenary would focus on racial inequities and the uncomfortable work grantmakers face if meaningful change is to be made. Flanagan talked about her work as Executive Director at the Children’s Defense Fund-Minnesota and the impact there in creating people of color-centered and American Indian-centered spaces to talk about early childhood education. Stamm talked frankly about the heavy burden carried by the people of color at Meyer Memorial Trust as they’ve worked to make racial inequalities more than just a side conversation in their work but actually take action to make internal and external changes. And McAfee shared how sometimes talk about “equity” can be a way to avoid dealing with subtle or institutional racism.

There were powerful questions from attendees about the importance of what language is used and how it is used and how to decide when to educate a colleague about race and when to delegate that education to books or professional development. McAfee, Flanagan and Wilson shared stories of often feeling subtly or overtly ignored, othered or discounted while Stamm admitted his slow learning curve as a white person who hasn’t been forced to be aware of institutional racism.

Numerous attendees expressed on social media that this conversation resonated in ways few other conference sessions ever have. You can see the emotional and engaged responses to a moving and important conversation at #2016GEO.

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Guest Post: Grantmakers and Collaboration

Kathleen EnrightNote: In October I interviewed Kathleen Enright, CEO of Grantmakers for Effective Organizations (GEO), on the blog. In the course of that interview, she mentioned GEO’s upcoming study of staffed grantmaking institutions. That study was released a few weeks ago, and I asked Kathleen to provide some perspective here on what the results mean. Her guest post is below.  

 

A few weeks ago GEO released our latest field study, Is Grantmaking Getting Smarter? We conduct this national study of staffed foundations in the United States every three years to better understand how and whether grantmaker attitudes and practices are changing in ways that help nonprofits make faster progress on their missions. In our 2014 survey, we endeavored to understand how funders support and engage in collaboration.

We were anxious to make meaning of the results related to collaboration in part because it was a key theme across the nonprofit listening sessions we conducted last year. Leaders touted the value of funders connecting them with each other and building peer networks. They recommended funders create more opportunities for nonprofit leaders to share ideas and allow collaboration to be an organic outcome of these peer exchanges. In addition, they made a strong case for funding collaborative work. As one listening session participant noted about collaborating, “It is expensive to undertake and not really fully funded.” Hopefully these results will provide an opportunity for funders to look carefully at their own practices to make sure that they are doing what they can to help productive collaboration flourish.

Collaboration in the context of philanthropy has many dimensions (you can find a description of the many forms and uses for collaboration here). In this survey we attempted to learn more about the extent to which grantmakers:

  • Fund nonprofit collaboration
  • Collaborate with one another
  • Create an enabling environment that supports collaboration

The findings in Is Grantmaking Getting Smarter? were mixed on this issue.

Fund nonprofit collaboration. Anyone who has participated in collaborative initiatives knows the truism that they take longer and cost more than you think at the beginning. It follows that successful collaborative initiatives hinge on nonprofits having sufficient bandwidth to meaningfully engage in them. This is why it’s encouraging that multiyear support has rebounded to pre-recession levels and general operating support is on the rise. General operating support increased in terms of share of total grantmaking dollars from 20% to 25%.

Our past two surveys also sought to understand if grantmakers directly support the costs necessary for nonprofits to collaborate. The 2014 findings suggest that grantmakers are now less likely than in 2011 to fund the costs of collaboration or managing strategic relationships among grantees. In 2011, 38% of respondents reported never or rarely funding the costs of collaboration or managing strategic relationship among grantees. In 2014, it got even worse—53% said they never or rarely provide this kind of support.

As the drum beat for collaboration has grown louder, it’s surprising (and a bit worrisome) that direct philanthropic support for collaboration appears to be in decline. Our research partners at Harder+Company hypothesized that improving economic conditions may play a role. Foundations may have seen collaboration as a way to make limited resources go farther in order to withstand the tough economic conditions. Given the rebounding economy, maybe funders see this kind of support as less important.

It is also interesting that general operating and multiyear support are going up at the same time that support for collaboration is going down. Might funders be increasingly providing organizations with flexible, long-term grants as a strategy to support the collaborative work they need to do? If so, that’s a positive instinct. Regardless, if funders expect their grantees to collaborate, they have to be willing to underwrite the costs of doing so. Otherwise it’s an unfunded mandate that is unlikely to succeed.

For the first time this year, we asked a question about what kinds of support funders were providing to enable collaboration. The most common approach is to organize collaborative meetings or events for grantees. Nonprofits who participated in our listening sessions appreciated when grantmakers do this work well.

Collaborate with one another. Most grantmakers (69%, which was the same in 2011) reported developing strategic relationships with other grantmakers. Those who are cultivating such relationships are overwhelmingly motived by achieving greater impact, followed by an interest in tapping the expertise of other grantmakers. The least common reason for collaborating with fellow grantmakers was to minimize burden on grantees.

That such a strong percentage of grantmakers recognize both the importance of and motivations for collaborating with one another is a promising result. However, this further highlights the divide between what grantmakers are willing to support for themselves and what they are willing to fund for their grantees. As more grantmakers engage in collaborative partnerships hopefully the case for supporting similar work for their grantees will grow stronger.

Create an enabling environment for collaboration. In addition to directly supporting nonprofit collaboration and engaging in collaboration themselves, we were also curious about whether grantmakers are doing what they can to create an environment conducive to successful collaboration.

  • By seeking and using input. Asking for and using feedback from key stakeholders lays the foundation for collaboration. At last, the majority of staffed foundations in the US are asking for grantee feedback. Additionally, grantmakers have become more likely over time to engage external voices in decision-making and strategy setting. They were most likely to seek external perspectives on foundation strategy (63% do so sometimes, often or always) and the majority of respondents now seek advice from a grantee advisory committee about policies, practices and program areas (52% up from 42% in 2011). This is good news.

  • In how they engage with grantees. Survey participants were asked how important certain funding practices were to their success. Fully 92% of respondents indicated that it is important that staff build relationships with grantees so that grantees can be open about their challenges. A slightly lower but still substantial percentage (89%) indicated that it’s important to provide opportunities for staff members to spend time outside the office with representatives of recipient communities or grantees. Given that strong and trusting relationships are an important ingredient to successful collaboration, this sense of priority is encouraging. However only 63% thought it was important to their success to have staff with experience working at nonprofits like those they fund. Nothing really beats having walked in someone else’s shoes, so it is my hope that more and more foundations will recognize the importance of hiring program officers with nonprofit leadership experience in the years ahead.

I’m curious what you make of these survey findings, so please let us know what you think:

  • Do you have ideas for why philanthropic support for collaboration might be declining? Do you think there’s any relationship to the increases in multiyear and general operating support?

  • For grantmakers: To what extent are you creating an environment that enables collaboration inside your organization? How are your practices smoothing the way for your grantees to collaborate more effectively?

  • For nonprofits: Are you talking with funders about what it takes to collaborate and what your real needs are?

Photo Credit: GEO

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Next Generation of High Engagagement Philanthropy: An Interview with Carol Thompson Cole

In this month’s Social Velocity blog interview, we’re talking with Carol Thompson Cole. Carol is President & CEO of Venture Philanthropy Partners (VPP), a philanthropic investment organization (co-founded by Mario Morino) that helps great leaders build strong, high-performing nonprofit institutions. She has over thirty years of management experience in the public, private, and nonprofit sectors. She served as Special Advisor to President Clinton on the District of Columbia and was the Vice President for Government and Environmental Affairs at RJR Nabisco.

You can read past interviews in our Social Innovation Interview Series here.

Nell: This year marks Venture Philanthropy Partners’ 10 year anniversary. And in fact, venture philanthropy itself is only a little bit older. How has the concept of venture philanthropy changed since it first came on the scene?

Carol: People began talking about “venture philanthropy” about 11-12 years ago. Back then, it meant many different things, depending on who was speaking. Today, it still means many different things, but those organizations that work within this philanthropic mindset, like Venture Philanthropy Partners, have learned some important lessons along the way and share some common characteristics like a focus on performance, long-term financial commitments, investing in capacity and building infrastructure, and bringing resources in addition to capital to the table, to name a few.

At VPP, we actually moved away from using the term “venture philanthropy” a number of years ago as we realized that our approach was not a strictly “venture” approach. We are much more about blending some of the ways private equity firms approach their financial investments with many of the lessons learned and techniques developed by philanthropists through the years. We usually call ourselves a “philanthropic investment organization,” and we work to maximize all available resources, including capital, time, the skills and experience of our team, and the power of our network, to improve the lives of low-income children and youth in the National Capital Region.

Venture philanthropy arose out of the tech boom in the late 1990s, when many young entrepreneurs making their fortunes online decided to shift their resources into philanthropy. They saw a real opportunity to apply their business and management knowledge to nonprofits to create real, sustainable change for our society. These entrepreneurs decided to take the principles of venture capital that helped them become successful and shift that over into philanthropy.

Of course, the main strategies of venture philanthropy have been used, in some form or another, by grantmakers long before the late 90s. Venture philanthropists focus on high-engagement approaches to their grants, work to build capacity of organizations to scale their programs, and seek measured and proven outcomes as a result of their investment. Above all else, venture philanthropists use high-engagement techniques to bring more than just money to their partnership with nonprofits. Different grantmakers have refined their own ways of implementing these strategies, but they remain at the core of venture philanthropy, even a decade later.

Nell: When venture philanthropy started in the late 1990s it was thought to be a true innovation that could transform the nonprofit and philanthropic sectors. Has it lived up to those original ideas?

Carol: Venture philanthropy is a true innovation, but the nonprofit and philanthropic sectors are large and complicated systems. Venture philanthropy is an effective tool that has helped us deliver strong results for the children and youth in the National Capital Region. VPP is focused on identifying outstanding nonprofit leaders with strong programs and bold ambitions to grow. We give them growth capital to build their infrastructure and scale their organizations through serving more children and youth, by increasing their outcomes and impact, or through influence – making systemic change that ultimately allows for many more lives to be changed. Our first fund has grown to serve an additional 16,000 youth.

Clearly, venture philanthropy has worked for us, but it is not the only answer for the nonprofit sector. It can be a useful tool to deliver results, but creating those results is more important than the way those results are created.

Nell: Venture philanthropy was in many ways the precursor to what has now become the social innovation movement. How do you think venture philanthropy fits into these new worlds of social investing, for-profit social entrepreneurship, and other areas where the public, private and nonprofit sectors are converging?

Carol: Again, venture philanthropy is a tool to be deployed in grantmaking. At VPP, we are focused on bringing a high-engagement model to our nonprofit partners and delivering results for the children and youth of the region. Social investing, social entrepreneurship, and other innovations coming out of the convergence of sectors are examples of similar tools to drive results. At the Harvard Social Enterprise Conference in March, where I spoke along side Paul Carttar of the Social Innovation Fund, there was a lot of discussion about what type of organizational structure is best to create social change and what type of funding an organization should seek out to achieve its mission. What became clear is that people need to focus on goals and strategy, not methods. Venture philanthropy complements programmatic sources of funding because it can help some organizations scale very effectively to help those who need it.

Nell: The federal government took a step into the world of social innovation last year with the Social Innovation Fund, which was based largely on the venture philanthropy model. What do you think of the SIF and how do you see government’s role (at both the local and federal levels) evolving from this?

Carol: VPP is a member of the inaugural portfolio of the Social Innovation Fund, and we are honored to be included among the other intermediary funders. We applied to SIF because the challenges in our community are too big and complex to be met by a single funder, a single nonprofit, or a single sector. What we need now is a “network” of nonprofits, funders, corporations, local governments, and the federal government working together to solve our most intractable problems.

SIF represents the first step towards that new form of collaboration. Speaking at the Harvard conference, Paul Carttar said that SIF was about much more than money, and it would be a success if the public-private partnership model was adopted by others across the country. In these lean times for funding, it is important that we work together to encourage social innovation where it is needed. SIF, as well as the other public-private innovations launched by the Obama administration, like Investing in Innovation and Race to the Top, are developments that should be encouraged. If we can continue to push local and federal government to take on this role as collaborator, we will be able to achieve much higher levels of impact in our communities.

Even the largest philanthropic investments are dwarfed by public funding and are often deeply effected by availability of public funding as well as how and when it is allocated. Not every partnership needs to be as formal as SIF, but I would urge all philanthropic and nonprofit organizations to look for ways to seek alignment with local, state, and federal government efforts.

Nell: What’s next for venture philanthropy? Where does it go from here? How do you continue to reinvigorate or adapt the model?

Carol: I strongly believe that SIF represents the next step for VPP, and for all of venture philanthropy. We feel our model of philanthropy works and our first investments were successful, but we also feel like there is potential to dramatically improve the lives of the most vulnerable children and youth in our regions through intense and intentional collaboration. Because of this, we applied to SIF.

Our SIF initiative, youthCONNECT, represents the next phase of our work. Instead of single investments, we are investing in a network of high-performing nonprofits that provide a number of different services to young people from low-income families to help them thrive in adulthood. All the nonprofits in the network share the goal of bringing education, job training, and social services to at least 20,000 low-income youth, ages 14-24, in our region over 5 years. As we demonstrate success, this approach can be replicated or adapted by others around the region and the country. We will still make high-impact, long-term investments in single organizations, but we are exploring the transformative power of a network approach.

It is too early to tell the effectiveness of youthCONNECT and SIF, but I think these developments are pushing us into the next generation of high-engagement philanthropy. At VPP, we are committed to evaluation, sharing, and transparency so we can learn from each other as we work in these unexplored areas.

Nell: One of the criticisms of venture philanthropy is that it is only accessible to the largest and most successful of nonprofits. Do you see smaller nonprofits being able to access the ideas of growth capital? And if so, how will this evolve?

Carol: VPP focuses on organizations with strong leaders that deliver results. We have historically focused on organizations with budgets of $3-$50 million, but in our youthCONNECT initiative we have invested in organizations that fall below that monetary requirement but still have a proven track record in the area. Investing in smaller organizations is a different approach than some venture philanthropists have used, but these smaller nonprofits should have opportunities to access growth capital. What is most important to VPP is that an organization, regardless of size, can deliver lasting and meaningful results for children and youth in our region. Change in the lives of those who need it most will always remain our priority.

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