Chuck Harris on Investing in Nonprofits

Chuck Harris is co-founder of SeaChange Capital Parters (see profile in the New York Times). His organization was on my list of organizations utilizing the model I described in my post Investing in Nonprofits. He’s left a comment with his own thoughts on investing in nonprofits vs. executing a foundation designed program through buying services from nonprofits.

Chuck Harris:

On behalf of SeaChange Capital Partners, let me add to the excellent comments from George Overholser and Jeff Berndt.

At SeaChange Capital, we also take an enterprise-centric approach, believing that outstanding entrepreneurs and their boards and management teams deserve and require unrestricted, multi-year philanthropic support in pursuit of significant increases in impact. Certainly this is how great companies are funded, and while acknowledging imperfect mapping between business and social enterprise, we do believe the equity investor’s mindset is applicable to both sectors.

We add to this the conviction that, as the social problems faced by children and youth in our low-income communities are enormous in scale, at least some of the responses need to be of scale as well. This suggests that the funding required from the philanthropic sector, often and ideally in partnership with government, needs to be quite large, larger than any single funder can provide. So we have taken on the assignment of supplementing our own resources with those of a national network of wealthy individuals and families who see the need to act collaboratively, with SeaChange Capital conducting significant due diligence (including utilizing prior research done by others willing to share their insights) and working to arrange the multi-party financings.

Yes, only time will tell if well-capitalized nonprofit enterprises can effect meaningful social change. I would suggest that results from the handful of youth-serving organizations that have achieved financings of this nature (see, for example, Teach for America, College Summit, Year Up, Youth Villages, Citizen Schools) support our thesis.

Thanks for engaging the conversation.


  1. Chuck Harris on Investing in Nonprofits

  2. Joseph Sinatra says:

    Dear Sean,

    I’m wondering if Chuck Harris can elaborate on this point that funding from the philanthropic sector should be large and “often and ideally in partnership with government.”

    Why does he view government funding as necessary and ideal?



  3. Aaron Stiner says:


    Great comments from Chuck at Sea Change. I wonder, if in these new times of economic uncertainty, if the cause will begin to transcend the organization. For example, should philanthropists not only be focusing on collaborating among funding sources, but also funding collaborations among agencies? If impact is the goal, it seems to me the impact is best achieved when organizations work together. That also brings efficiencies and economies of scale in staff time, networks, donors and recipients.

    Check out the latest project from the Lodestar Foundation, the Collaboration Prize:

  4. Chuck Harris says:

    Joseph — my thought is simply that large-scale systemic reform that is sustainable is likely to require funding of a magnitude and over a time frame that only the government can provide. I certainly don’t mean to overlook the difficulties in securing such funding, having it survive political turnover, the often burdensome restrictions and reporting requirements that accompany such funding or the operational risks that accompany both scale and government involvement. Chuck Harris

  5. Aaron, I think Lodestar is doing great stuff. I’ve blogged about their work and met Jerry Hirsch a couple of times. Funding a collaboration, much like investing in a joint venture, I think would be a version of investing in an organization. However, if the foundation has its own program idea that no nonprofits are doing, but offers funding for two groups to get together to do it, than this would be the program design model.

    My understanding of the Collaboration Prize is that the collaboration is being designed by the nonprofits to achieve their program needs and Lodestar is rewarding them. So I think the prize is very much about the organizations rather than the program.

    That said, EVERYTHING I’m writing is about affecting the cause. I’m just saying that building great organizations is the best way to have impact on the cause.

  6. Joseph Sinatra says:


    Thank you very much for you response.

    Much appreciated,