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.
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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.
The idea, says Donlea, is to offer a set of operating principles but give local SVPs ample room to experiment. "Three cities have already taken our approach and twisted it," he says. The SVP in San Francisco, for example, makes all its grants in a single neighborhood. San Diego changes the focus of its giving each year. And the Kansas City SVP is creating a social-venture-capital fund. "If there is reason and value here," says Shoemaker, "it will be because there is real learning taking place."
Local Heroes
In 1992, Fidelity Investments strode onto the philanthropic stage with a product designed to attract the assets of new donors. The Charitable Gift Fund, which bore a strong family resemblance to both retirement and mutual funds, pooled charitable contributions and invested them collectively but allowed individual donors to direct where their money would go. Today the oft-imitated fund, which requires a minimum $10,000 contribution, has more than 27,000 donors and total assets of $2.6 billion. Its participants have given $2.7 billion to charity.
Bank and brokerage customers probably know about such "donor-advised funds." They probably don't know that community foundations thought of them first. Community foundations -- there are about 600 nationwide -- are public charitable funds through which community members, including businesses, individuals, and families, make grants to local nonprofits. Donor-advised funds within community foundations have been around for decades. They give those contributors more say in where their money goes and offer information and advice on various charities. Minimum contributions generally range from $5,000 to $10,000 plus an administrative fee. As happens with private foundations, donors receive an immediate tax break.
But while community foundations spawned donor-advised funds, it was Fidelity's marketing dollars that made them popular. And that, in turn, has led more and more community foundations to adopt the vehicles and to ramp up services to compete with the private sector. "We needed to offer the kind of service that was competitive with entities like Fidelity," says Jan Kreamer, president and CEO of the Greater Kansas City Community Foundation. "We had been benchmarking against the community foundations but realized we needed to benchmark against the for-profits."
So the Greater Kansas City Community Foundation streamlined its back-office functions, invested in new technology that let donors check balances and give online, and built the capacity to perform complex transactions (such as accepting donations of real estate and closely held stock). More important, the foundation made educating donors a priority. "We live in an information society," says Schervish, of the Social Welfare Research Institute. "Whether it's a disease or a school we want to attend or how we want to give money away, we want to make informed decisions."
