The Impact and Future of Venture Philanthropy

(This is a guest post from Steve Butz, President & Founder of Social Solutions, who is covering the Council on Foundations Conference for Tactical Philanthropy)

By Steve Butz

So I just left an afternoon session that I had been looking forward to…”The Impact and Future of Venture Philanthropy.” The session was lightly attended, 30-35 people, and the conditions for an interactive session were less than ideal due to both the setup of the space (classroom style) and the inattentiveness of the moderator.

The central tenants of Venture Philanthropy were discussed, which was interesting. I am more than paraphrasing here, but basically the 3 tenants put forth by Paul Shoemaker, one of the Presenters, (there were four but in my rush to write this blog I have forgotten one…) were 1) deep investments into an organization and its capacity, as opposed to programmatic focus, 2) generally more extensive involvement between the funder and grantee and 3) generally investments focused on long term organizational growth, with an eye towards an exit where investment will come from outside the initial investing funder.

There was another Presenter (I do not believe it was the same person referenced in the COF materials on the session so I will not reference him by name) who articulated some of the concerns that he had with Venture Philanthropy. Some of these strongly resonated with me- one example that stuck very clearly was the idea that VP tends to invest in orgs that are relatively new- as opposed to those (he mentioned specifically Catholic Charities, Boys and Girls Clubs and The Salvation Army) that have been doing “the lion’s share of the work with the lion’s share of the people who most needs services.” I thought this was a great and interesting point and I had not heard, at least so well articulated, this criticism of Venture Philanthropy.

Another interesting gem was Paul Shoemaker’s assertion that he does not understand why business people are so often not in favor of giving organizations unrestricted funds. I tried to publicly comment on this (was not chosen by moderator) but I found it very interesting, having been involved with Venture Capital groups, why Paul could not see that business people generally need to see a well thought out business plan in order to ensure that any investment made has a reasonable chance of success. I believe that the fact that very rarely (I know there are exceptions) are such well thought out plans laid before a board or funding organization is probably the core reason why private sector folks are opposed to such “general support.” I hope I am right, anyway, but I will agree with another of Paul’s main points- that the level of engagement of private sector individuals, in their role as board members of non-profits, currently leaves much to be desired. I have written more extensively about this in our white paper available here.

The session was a good primer on the basics of Venture Philanthropy but I would have liked to have felt a bit more of the capitalistic, “survival of the fittest organizations” mentality that I believe is an important part of Venture Philanthropy.