A New Marriage: Venture Capital Philanthropy

One scarcity in any organization is… FUNDING. Ask anyone building a non-profit, for-profit, or socially conscious business and they will say fundraising is one of the most challenging aspects. Robert Pozen recently wrote an article in The Wall Street Journal “Why Not Venture-Capital Philanthropy?” announcing a new proposal by the U.S. Department of Treasury that foundations may buy stock or make loans to a commercial venture if its activities promote its charitable objectives.

So what does mean for you?

It means that instead of a traditional approach where a foundation makes a grant to a non-profit institution like a university or traditional 501c3, the government has expanded the roles of foundations to provide funds to innovative, for-profit entities in the form of buying stock or making a low interest loan.

This creates a great opportunity not only for the for-profit organization trying to be innovative, but also for foundations. By their very nature, foundations were created to perpetuate some sort of “good” in a specialized or niche focus. Foundations NEED innovative solutions as much as entrepreneurs need funding.

It’s like the relationship between peanut butter and jelly, or Batman and Robin. The marriage of these two categories of people dedicated to facilitating transformational change should be championed, it should be encouraged, and we each must find our role in facilitating those relationships.

So this begs the question that I ask myself every time I read an article like this oneā€¦. What is my role? How do I help? How can I be involved.

The key is truly understanding the role you can play in this relationship and pushing forward full steam.

  • If you are a foundation or know a foundation with a particular vision or focus, you should go to them and help them begin to seek out opportunities that are in line with this new proposal by the U.S. Treasury Department. Help these foundations connect with and meet for-profit companies that help fulfill their objectives while also providing a profitable investment engine.
  • If you are a for-profit organization that is attempting to perpetuate a social good within our culture make sure you are honing your pitch, developing an answer for the question of why should foundational money be given to you and your organization.
  • What makes you different from everyone else? What are you doing that they cannot find in someone else? How are you collaborating with others to make your organization more effective?

And finally, if you are just an interested reader and passionate proponent of social good, get on your dancing shoes, pull out your megaphone, and utilize every ounce of your passion and heart to evangelize and connect these ideas, concepts, and companies to these foundation funding sources. Do research on Google, sign petitions, send emails, make phone calls, and most importantly use your social voice to entreat people across the country to find their place, find a role, and make venture-capital philanthropy an accepted solution that helps people do more “good” around the world.

 

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