Back home in 1996, Khazei returned to City Year, aiming to seed the organization in 10 new cities within five years. Kirsch, who had left Public Allies, began to lay the groundwork for a venture-capital fund that would serve nonprofits. She approached the project as she had any other in her life: with complete obsession. "By the time I got back to America, I couldn't think of doing anything else. When people say, 'Oh, I think you're off here. Maybe the timing's not right,' I think, 'We're doing the right thing because I know it,' " Kirsch says. "There's such a higher drive for me, because I've listened to voices in Russia, the Middle East, South Africa, China, and Japan, among others, all saying the same thing. I don't want to sound mushy -- but this is my calling."

Kirsch, with Khazei's help, spent a year researching the idea, assembling a think tank of students, professors, social entrepreneurs, and business leaders. Kirsch and a coworker bulldozed their way into the office of Harvard accounting professor Robert Kaplan, who had invented the "balanced scorecard" method of evaluating companies' nonfinancial performance. Within an hour, they had persuaded Kaplan to adapt his method for Kirsch's venture, New Profit Inc. Kirsch then struck a deal with the Boston-based Monitor Group to provide mentoring and strategy consulting for the nonprofits that her company would choose to groom -- as well as office space for her four employees.

Then Kirsch started raising money -- $2 million to date from investors including the Knight Foundation, Mark Nunnely of Bain Capital, and Chris Gabrieli of Bessemer Venture Partners. Initially, New Profit will provide four entrepreneurial nonprofits, chosen from among 40 applicants, with consulting and financial services worth up to $1 million over three to five years. The inaugural investments: Jumpstart, which matches college-age tutors with preschoolers; Citizen Schools, a group that fosters community involvement in public after-school education; Working Today, a union, of sorts, for free agents; and Codman Square Health Center, a Boston clinic that serves the disadvantaged. Mirroring the for-profit venture-capital paradigm, a New Profit representative will sit on the board of each funded organization to advise and monitor its progress.

Like Public Allies and City Year, New Profit is intended to be a test case. If it's successful, Kirsch hopes and expects to witness the organization launch a whole new sector -- not nonprofit or for-profit, but new-profit. In the new-profit world, investors will demand a strict accounting of strategy, operations, and results. They will seek a quantifiable return on their social investments -- not a financial return per se, but one that is based on measurable social progress. New Profit grantees that meet certain standards will be rewarded with additional funding; those that fall short of meeting those standards will ultimately be dropped.

Competition, in other words, will arrive in the nonprofit world. "American industry wouldn't be the entrepreneurial mecca it is if it weren't for venture capital. In venture capital, a lot of the new ideas get the big grants. People take big risks on new ideas," Kirsch says. "But the nonprofit sector is stuck with a conservative, banking mentality. Funders don't take big risks on big new ideas. There are a few people who generally control what gets funded. My goal is to someday have hundreds of venture-philanthropy funds to fill in that green space that hasn't been developed."

Cheryl Dahle (cdahle@fastcompany.com) is a Fast Company senior writer. Contact Alan Khazei (akhazei@cityyear.org) or Vanessa Kirsch (kspan@earthlink.com) by email, or learn more about New Profit Inc. on the Web (www.newprofit.com).

Sidebar: What's Fast

After spending roughly a year networking with other social entrepreneurs around the world, Vanessa Kirsch and Alan Khazei have a good sense of the future of civil society.

Get used to new profit.

"In the future, change agents will have to be comfortable in all different sectors, both public and private," Khazei says. "They'll have to be willing to work with the government, to work with nonprofit leagues, to work with businesses. We saw that everywhere we went. Even in China, which is communist and very much government-controlled, we found that there were people doing borderline nonprofit work."

Say goodbye to big government.

"The era of big government is over, and not just in America," Khazei says. "The issue of government corruption was everywhere. But it wasn't that people were against the government or ready to throw government away. They were recognizing that they needed more nonprofits and businesses involved in addressing issues."

Meet the new revolution.