Venture Philanthropy: The New Model

"Venture Philanthropy," "social venture philanthropy," "the new philanthropy," "social venturing," and other terms abound in today’s discussions, particularly among professionals involved in the high-tech, venture capital and foundation worlds.

What is "venture philanthropy" and does it actually differ from charitable giving, as we’ve known it? Is it simply a new generation of individuals who are engaged in philanthropic efforts? And what is meant by “social entrepreneurship,” and what is its attraction to current philanthropists?

Venture Philanthropy Partners, together with Community Wealth Ventures, published a report in 2004 called "High-Engagement Philanthropy: A Bridge to a More Effective Social Sector," profiling the relationships between funders and organizations they support.

So much of the discussion over the years about high-engagement philanthropy, also called venture philanthropy, has focused on dollar investments, who is involved, and their broad approaches. This report provides a rare look at how this kind of philanthropy gets put into practice, its risks and rewards and benefits and pitfalls."

And a 2007 Stanford Social Innovation Review article takes the conversation deeper. In “Social Entrepreneurship: The Case for Definition,” the authors argue that it is now time to distinguish among social entrepreneurs, social activists and social service providers in order to clarify the value proposition. This distinction should also enable the philanthropic community to accurately determine and support the different funding needs of entrepreneurs, activists and providers.

To learn more about how other "Venture Funders" are practicing philanthropy, visit the web sites of the following organizations. (A portion of this list is reprinted with the permission of The Grantsmanship Center Magazine.)

Austin Social Venture Partners (Austin, TX) - provides financial support and business expertise to help its nonprofit "investees" develop more efficient, sustainable organizations. ASVP works with Central Texas nonprofits "to address root causes of community problems."

Community Development Venture Capital Alliance (New York, NY) - comprised of various community development venture capital funds around the country, the group uses a combination of equity capital and entrepreneurial and management assistance to promote economic development and job growth in economically distressed communities.

Community Wealth Ventures (Washington, DC) - works with nonprofits and corporations to promote social change using resources produced by revenue-generating enterprise.

Dallas Social Venture Partners ( Dallas, TX) - Business and technology professionals seeking to invest time, money and expertise in local nonprofits.

Echoing Green (New York, NY) - provides seed money and technical support to create innovative public service organizations or projects. Goal is to boost social venture projects at an early stage and help them to grow beyond startup.

The Entrepreneurs' Foundation - works to encourage the entrepreneurial (usually pre-IPO) sector of the Silicon Valley and Bay Area to incorporate community involvement as a core element of startup companies.

The Enterprise Foundation (Portland, OR) - works primarily to provide affordable housing, offering a range of funding opportunities to Portland-area nonprofits.

European Venture Philanthropy Association (Europe) - a new network dedicated to promoting the venture philanthropy toolbox which has come out of the European private equity community.

Global Partnerships (Seattle, WA) - raises private-sector funds to support village banking and micro-credit programs in Central and South American communities.

New Profit, Inc. (Boston, MA) - seeks to attract new financial and intellectual capital to the nonprofit sector and develop new financing mechanisms for investing in social entrepreneurs.

New Schools (Palo Alto, CA) - supports a network of about a dozen "education entrepreneurs," providing them with access to financial and intellectual capital.

Roberts Enterprise Development Fund (San Francisco, CA) - supports eight Bay Area nonprofits currently operating 23 enterprises that offer transitional and permanent employment to low-income and formerly homeless individuals.

Silicon Valley Social Venture Fund, "SV2" (San Jose, CA) - a partnership of individuals and couples committed to strengthening and building their own philanthropy and knowledge of the public benefit sector, while collectively having an impact on local issues through grantmaking.

Social Venture Network (San Francisco, CA) - an international group of business and social entrepreneurs that fosters business partnerships and investments designed to "forge new models for social purpose enterprise, particularly those that generate profitable opportunities in disenfranchised communities."

Social Venture Partners International – an organization that connects the 23 social venture partnerships (SVPs) in North America. The organization is currently working with groups who are starting SVPs in ten additional North American locations and London, Tokyo, and Brisbane.

Social Venture Partners of Arizona (Phoenix, AZ) - works to "address difficult social challenges" in the metropolitan Phoenix area. Current focus areas are children and education.

Social Venture Partners - Boulder County (Boulder, CO) - Working with the Community Foundation Serving Boulder County, partners vote on issue areas such as youth, homelessness and the environment to focus their collective resources and build a "dynamic connection between entrepreneurial energy and grass roots innovation."

Social Venture Partners New Mexico – works to develop a philanthropic community whose members provide leadership and a highly engaged, long-term approach to social investing throughout New Mexico.

Social Venture Partners of the San Francisco Bay Area (San Francisco, CA) - seeks to develop philanthropy and volunteerism to achieve positive social change in the metropolitan San Francisco area.

Social Venture Partners (Seattle, WA) - seeks to "develop philanthropy and volunteerism to achieve positive social change in the Puget Sound region" by using the venture capital approach as a model in forming partnerships with local nonprofits.

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