Shaking the Foundations

The Foundation Source Web site will also include information on philanthropic consultants, requests from charities that need volunteers, and chat rooms where members can share information and even pool their resources for collective giving. "My ultimate goal is that we'll help identify problems of common interest to our members and that we'll bring people together," says Mellinger.

At press time, Foundation Source had just two financial partners: Bank One and TD Waterhouse Institutional Services. But Mellinger expects that 8 to 10 more partners will sign on by the end of the year and says the company could be a $100-million concern in five years. Page Snow, chief officer of institutional planning at the Pew Charitable Trusts, doesn't discount him. "Once you set up a foundation, you're going to have strong philanthropic instincts," she says. "There's an incentive to think hard about results." The market, Snow continues, is more receptive than ever to new ways of giving.

Branches from the Giving Tree

If Foundation Source is a vehicle for attracting donors, Social Venture Partners represents a proliferation of donors creating their own vehicles. SVP was never elitist, but when Paul Brainerd started it, five years ago, he didn't dream that its appeal would extend far beyond Seattle's young and wealthy high-tech community. Today SVP has 1,040 members in 20 cities, from Calgary to Austin to Pittsburgh to Boston. Each affiliate was founded by locals who were willing to put up both their money and their time. If there's no SVP where you live, you can easily start your own and expect a warm welcome into the fold.

Originally, SVP looked a lot like a traditional giving circle, in which donors pledge money to a common fund and then participate actively in grant making. Typically, participants agree upon a mission: SVP's was to support existing nonprofits that had good track records in children's and education issues. The cost of entry was $5,500 a year for at least two years.

But Brainerd, founder and former president of Aldus Corp., had loftier ambitions: to "engage a new generation of emerging philanthropists" and "learn how to make investments in the community that would make a difference in people's lives," to quote the organization's annual report. Under his model, granters would work directly with grantees, sharing their business skills but resisting the temptation to meddle with program delivery. "We don't know a darn thing about how to help kids, so we stay away from that," says Paul Shoemaker, SVP's executive director. "But we do know how to build a business." The "venture philanthropy" approach struck a chord among Seattle's newly affluent, and SVP grew from 91 partners in 1998 to nearly 300 today. To date $3.4 million and countless volunteer hours have flowed to local nonprofits in that city.

JUST ADD WATER: Doug Mellinger's new venture sets up foundations in 24 hours.

Then the kudzu effect kicked in. "A couple of years ago, we got a call from a real estate guy in Phoenix," recalls Shoemaker. "He had made some money, and he said, 'I've been looking for something like this for so long.'" The caller, Jerry Hirsch, picked Shoemaker's brain, studied the Seattle organization, and mustered excitement among his peers. A few months later, in March 1999, Hirsch launched Social Venture Partners Arizona with 36 partners. Dallas hopped on next, then Denver, then Boulder. "We didn't even keep track of them," says Shoemaker, "and then when there were six or eight, there was a realization that there was a movement here. So we all got together and asked, 'Is there a viable connection among these cities? Is there a brand?'"

The appeal of a networked, branded organization was particularly strong among the business and entrepreneurial crowd, who knew firsthand the value of both characteristics. "The big idea is that we're connecting these people," says Shoemaker. "They form a community of networked, engaged, committed philanthropists."

Now Shoemaker has to leverage that community to serve SVP's nonprofit grantees. To that end, he recently hired Tom Donlea as director of SVP International, a newly incorporated umbrella organization. Donlea's job is to keep the SVP affiliates talking to one another through conference calls and E-mail, and to help train them by providing speakers and written materials. Donlea envisions far-flung SVPs' pooling their buying power to help grantees purchase equipment, such as computers. There's already talk of sharing best practices.

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