While the model was conceived in palmier times, St. John says the group never expected quick returns. "We have a lot of biotech companies here," she says, "and they're always on a longer time frame." But, she concedes, "we have become more selective about the companies we invite to participate."
These modes of giving are still in their infancy. They will develop slowly, morph into something entirely different, or perish, according to market demand. But entrepreneurs will likely find many of them appealing simply because they are entrepreneurs. The new philanthropic ventures speak the language of business. Donors make decisions and bring their management skills to bear on urgent problems. They get to master subjects they care about. Experimentation is rampant.
But so is risk. And just as with a start-up, there's no guarantee that what you're doing will make a noticeable difference. "I've watched these new models come in over the past three to four years," says Snow, of the Pew Charitable Trusts, "and there's been an evolution. A lot of my friends in venture philanthropy who were talking about eradicating poverty are realizing that it's hard to get results even in one neighborhood."
"I've seen a lot of new donors become frustrated," agrees Rebecca Rimel, president and CEO of Pew. "They find out quickly that solving a public-policy problem is a lot more complicated than the challenges they've had in growing their businesses because so much is out of their control."
"Philanthropy," concludes Snow, "is a humbling business."
Donna Fenn is a contributing editor at Inc.
A Helpful Heart, a Business Brain
As more-engaged donors transform philanthropy into a hands-on affair, nonprofits are getting an infusion of management experience along with the cash. The new language of giving, consequently, sounds a lot like the old language of business.
Such respected grant makers as the Pew Charitable Trusts and the Edna McConnell Clark Foundation pledge measurable results and a long-term commitment to grantees, now referred to as "partners." There is a growing realization, too, that venture philanthropy's emphasis on organizational efficiency can and should apply to much of the nonprofit world. "The for-profit sector discovered 20 to 25 years ago that strong organizations produced strong performance," says Jeff Bradach, cofounder and managing partner of the Bridgespan Group, a nonprofit consulting firm affiliated with Bain & Co. that helps nonprofits and foundations boost performance and respond to changes in the marketplace. "Now the nonprofit sector is discovering the same thing."
As a result, charities' back offices are receiving some of the same attention as the field. Enlightened donors, for their part, won't balk when their money is spent on a computer system. "For groups in need of capacity development, these people will do what many foundations are not willing to do because the foundations want money to go to programs," says Paul Schervish at Boston College's Social Welfare Research Institute.
But sometimes worlds collide. As the new philanthropists urge nonprofits to embrace business principles and venture-capital metrics, some grantees worry about the effect on their missions. How do you measure the performance of a rape-crisis center? Will the demand for measurable results compel nonprofits to take on less daunting tasks -- address the symptoms of big problems rather than their causes? Under pressure to "scale," will small but important niche nonprofits be squeezed out of the marketplace?
"Expertise and money, combined in the right away, can be a powerful lever," says Bradach. "But the innovators who are really going to make a difference are the ones who don't underestimate how different the nonprofit world is from the for-profit sector."
Giving Thought to Giving?
For more information, you can start here:
Social Venture Partners information can be obtained by calling Tom Donlea at 206-728-7872 or visiting the Web site at www.svpseattle.org.
The Foundation Center can help you find a community foundation in your area at http://fdncenter.org.
The Forum of Regional Associations of Grantmakers will guide you to innovative philanthropic programs at www.givingforum.org.
Giving Circle information is available at www.minnesotagiving.org or www.givingnewengland.org.
Foundation Source information can be obtained by calling Bob Charney at 800-839-0054 or visiting www.foundationsource.com.
Fidelity Investment's Charitable Gift Fund information is available at www.charitablegift.org.
Please E-mail your comments to editors@inc.com.
