Today’s podcast marks a new chapter in my evolving attempt to facilitate cross-disciplinary conversations in the field of philanthropy. As I announced yesterday, interviewees will now be expected to participate in a discussion of the podcast topics in the days after each release. However, for this to be successful I need your help. My readers have already shown a great interest in posting comments and emailing me their thoughts. Now is your opportunity to do the same with the thought leaders who are featured in the podcast. So leave your comments and questions and check back often to watch the discussion unfold.
Kicking off the new format is Paul Shoemaker of Social Venture Partners (SVP). SVP is like a giving circle on steroids. Using a venture capital model, SVP makes grants but also provides their grantees with knowledge, skills and valuable contacts. If you want more context about Paul and SVP check out info here, here and here.
As you develop your questions for Paul, I would encourage you to think about the following topics that we’ve already discussed: giving circles, measuring impact and outcomes, venture philanthropy, the impact of high tech entrepreneurs entering philanthropy for the first time, and “new” vs. “old” philanthropy.
Paul defends the venture capital concept, criticizes “big mouthed”, arrogant individuals for diluting the term “venture philanthropy”, tells us why he thinks there really is a “new donor” today, and talks about the rise of giving circles. Let Paul know what you think. Leave a comment at the end of this post or email me any thoughts or questions. I have Bill Schambra lined up to try this new format and a major foundation CEO considering giving it a try. Help me make this work and I think this venue will attract important leaders and spark a lively conversation. Thanks so much to everyone who has been participating in the discussion here. It has been my great honor and pleasure to watch the debate unfold.
Expand this post using the link below to read the transcript.
Sean Stannard-Stockton: Hello and welcome to the Tactical Philanthropy Podcast. I’m Sean Stannard-Stockton, author of the Tactical Philanthropy blog and Principal and Director of Tactical Philanthropy at Ensemble Capital. My guest today is Paul Shoemaker. Paul is the Executive Director of Social Venture Partners. Good morning, Paul. Thanks so much for joining us.
Paul Shoemaker: How are you doing Sean?
Sean: I am doing good. Thank you. Paul, why don’t you start off and give us a brief overview of Social Venture Partners and then tell us why you joined SVP and took on the role of Executive Director.
Paul: You got it. Well, we are an international network of engaged philanthropists. There are SVPs in about 23 cities. There is a network called SVP International. What is common to all of those is that it is made up of individuals that contribute not just their financial but their human capital as well. That means that our members are directly involved in deciding where grant money goes in the community. They are involved in lending their professional skills and expertise to nonprofits as volunteers to help them build their capacity.
They are also involved in ongoing education to increase their knowledge about the nonprofit sector and about philanthropy. The end result, the two missions of that body of work, Sean, are number one to help nonprofit organizations become stronger and help them build their capacity and secondly, it is to help philanthropists build their own strength and their own capacity as philanthropic and civic leaders. As I mentioned in the start, it has spawned now into 23 cities, about 1,700 partners across America and a group in Japan.
Sean: What do you think attracts your members to venture philanthropy? I would assume that many of them have already engaged in some level of giving before joining SVP. Why do they decide to join SVP rather than continue in their kind of annual traditional giving?
Paul: Well, first of all a lot of them probably do continue part of their philanthropy in a traditional way which is totally fine. It is probably not rocket science. The reason folks join us is because they have the desire to be more engaged in their philanthropy. They want to be closer to the work. They will learn. They want to grow as a philanthropist and some combination of those reasons is why they join our organization. It’s more kind of motivated.
As it goes on, those reasons are valid but as time goes on what becomes more significant to them is the network of people, the value they get out of it, the impact that they believe that they are having on the community they think they get out of an approach like this. It is usually some combination of that first set of reasons is why someone joins.
Sean: So the concept of venture philanthropy has proven to be somewhat controversial over the years. What do you think the role of venture philanthropy is today and why do you think venture philanthropy is important?
Paul: Well as some people inside the sector know, venture philanthropy is one of the terms that got [unintelligible] in the late 90s. The original intent of the name – and a few organizations like Roberts Enterprise Fund and Robin Hood, who were really the pioneers of this and we jumped on – the original intent specifically was the notion of long-term capacity focused engaged relationships between philanthropists and nonprofits.
The term became controversial, in part, because some folks disagreed with that approach but also a lot of it was because a lot of people started using that term to describe themselves and a lot of them happened to be big mouthed and suggested they were going to save the world with their great business practices which is not what we intended by it.
If you look at it in the intentional, intended meaning of the term, I would be glad to stand up for it. It is a term that got used in a lot of different ways. The controversy was about arrogance and some things like that.
As far as why I think it’s important. It’s important because our suggestion is not even remotely the only or necessarily the best approach. What it is is it’s great for certain nonprofits at certain stages and for certain philanthropists and civil leaders in certain stages of their development.
It’s more about filling a particular segment of the market and with those organizations, those nonprofits we work with, there are nonprofits just like for-profits that at certain stages they need not just investment in the product but in the whole organization. They need not just money but they need advice and expertise and networks, etc.
On the flip side of that, there are philanthropists that at a certain point, it’s the reasons I just described to you a minute ago why they joined. They need different parts of that value equation and their evolution in the different points in that philanthropy. A lot of our folks, the vast majority of our folks, they still practice a lot of philanthropy outside of SVP as well as inside it.
So we exist not only to do the work of the organization to build certain nonprofits, we’re also trying to be a catalyst for their own individual philanthropy outside of SVP and help them become more effective in that work.
Sean: Paul, personally, I am really intrigued by the concept that philanthropy, because it is not subject to market forces, often doesn’t have to learn from its failures. I think there is a shift in that trend right now, for instance, the Hewlett Foundation on the front page of their website has a link to a study that they call “Hard Lessons” where they talk about what is essentially a failure and the lessons they learned from it.
You just wrote an article in the Stanford Social Innovation Review about the closing of the Bay Area chapter of SVP titled “Profiting from Failure.”
Sean: What did SVP learn from the failure of your Bay Area chapter and then more broadly, how do you think philanthropy in general can learn to profit from their failures?
Paul: Yeah, let me start with the latter first if I can, the former for the most part somebody can read Stanford Social Innovation Review. The broader point and you framed it well Sean is that not only is there, there are no market forces. There is not even particular motivation for a funder to describe and learn from its failures. They don’t have to be public about it which is probably what made what Hewlett did really highly admirable and important.
If you think about any industry, any factor, any business, any nonprofit is an industry. Nonprofit organizations are businesses and fundamentally you get better not because of the good decisions you make. Almost anybody will tell you you learn more from your failures than your successes. In the private sector you don’t have any choice. The market exposes your failures and you have to learn from them or else you will fail.
The same is just like you said in the absence of market forces for foundations you don’t have it. The motivation to do it is not particularly high because you are shown where you made mistakes. But as a fundamental proposition, your ability to get better and the slope, if you will, of your learning and your effectiveness curb gets significantly reduced if you don’t have a chance to learn from other people’s mistakes and you don’t learn from your own mistakes.
So I think it’s a real kind of fundamental dynamic of the sector that makes its level of innovation and progress and effectiveness. It slows it because there aren’t those forces there to make it happen. In the specific case of SVP Bay, the broad point is at that point we were about half a dozen cities and some of them were succeeding and some of them were failing.
The founding and creation of SVPs in other cities beside Seattle was not part of the plan so it happened very organically for a while and San Francisco was a great example of, at that stage of the process, we were growing this thing organically but we really didn’t know how to intentionally create and scale a nonprofit network across North America.
So the lesson at that point really was organic is fine for a while, but at some point you’ve got to be intentional and just like every nonprofit locally or any nonprofit that’s tried to expand and replicate, it is extremely hard, ten times harder than you think and I think it’s a lot harder than doing it for a private sector business.
Sean: So I talk a lot on Tactical Philanthropy about giving circles and the important role I think that they can play in the current philanthropic environment. So while SVP may, we can say, represents a giving circle on steroids, can you talk a little bit about giving circles in general, I mean how you view them and their place in philanthropy?
Paul: Yeah, I think it depends on, there’s a lot of different giving circles, so it kind of depends on how far you go with it. At a minimum level, just act to get better with peers, I think it is a reinforcement for the act. It’s an opportunity to learn from other people, it’s an opportunity to get confident in what you do, that’s kind of Giving Circles 101 I guess.
I think it beats the heck out of somebody not being a part of one. Where it grows up from there, depending on how long it exists, how much financial capital is in it, how much human capital’s in it, how they focus on relationships with nonprofits. The further it goes along all of those dimensions, the more you get into giving circles, not just as a learning in a social environment but also as leverage, as a way for multiple funders to bring together resources to focus in a collaborative, integrated way as opposed to everybody making one-off decisions, the notion that we can do more here together than I could on my own.
So its importance is a function of how far you take the idea at each level. I think it adds a piece of value to the sector that doesn’t exist when you’ve only got individual funders acting on their own.
Sean: I think that SVP – there’s a sense in the field right now – that people involved in SVP represent to some extent, a kind of new donor and there’s some debate around people who say, “Well, what the so-called ‘new donors’ are doing, is really not much different from what any of the existing philanthropists were doing when they first started.”
Do you think that the concept even has any validity? Is there a new donor today or are the people that you’re interacting with, are they really approaching philanthropy in a new way, and I don’t just mean venture philanthropy, I mean the people who are attracted to philanthropy in new ways?
Paul: Great question. I’m going to answer at two levels but the first level, which you may be expecting, which is, the new versus old, that was just like venture philanthropy, it was one of those terms that just kind of got tiring several years ago and frankly, new versus old, it didn’t say anything about whether it’s effective or not anyway.
So the new-old concept is pretty tired at least for somebody who has had heard it for a while and I know that in our case and I think a lot of others group’s case you’d be nuts not to learn from people who came before you.
Now, the point about whether there’s something new, every single piece that we do, collective grant making, strategic volunteering, donor education, you can find those pieces somewhere in a community of individuals but you cannot find putting them altogether in one organization to the degree to which we engage our members in the work and with each other that is unique.
So when folks ask me if there’s anything we’re doing here that’s unique or new, the parts, no. The way we put them together, yes.
And the part “Are Donors New”, it’s interesting, I’ll try, I would answer this question differently, maybe six or seven years ago and I would have said, “No, there’s not that much difference.”
And clearly there’s plenty of ways in which there are probably more similarities than differences but – and I know I got a little bit of bias on it but having lived here now for ten years – I do think there’s a difference in the degree to which, on average not universally, but on average philanthropist want to be engaged and they want to be hands on. I don’t think that was just a fad, I think it’s for real and I think I see that show up in many places.
So I do think that that is somewhat different and I don’t know if it’s because of a different generation or because people have money at a younger age or what the reason is and whether that carries with it. I think, for an organization like us is both up to the new duty and the responsibility because the more engaged they are, so it’s kind of like a risk/return ratio. They could add more value, they could also mess more things up.
Sean: OK, Paul, as we end, a last good piece of advice for my listeners and my readers from you. If you were talking to somebody who wanted to start their own giving circle, especially something that is more modest than SVP, what advice would you give to them to help make sure it works?
Paul: Great question. I would say a couple of things. Number one, do it. I think the things that are important and there’s definitely no rocket science here but it comes down to things like I think you got to make sure you got some leadership and who wants to be the organizer. When folks just kind of come together and everybody agrees to do it by committee, it can be a problem. So I think leadership matters.
Also, depends how far it goes, I think you need somebody to play the administrative role. So I guess the broad point I would say is number one, there’s a lot of information, lot of resources out there, you can always learn from, and number two, try to be clear and make sure people are fulfilling different roles in the group and a lot of what I just described to you, it isn’t even particular to even giving circles. It’s kind of more about group dynamics and how you get organized and you’re effective.
Sean: OK Paul, I really appreciate your time, and taking the time to speak with us today.
Paul: Keep it up. Thank you very much for having me.