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The Business of Philanthropy

Social Venture Partners is helping businesspeople move their skills from the conference room to the community.

Nonprofit organizations do not play by the rules of the new economy. They do not issue top-dollar IPOs. They do not court high-dollar mergers. They do not register on your Yahoo! stock ticker. But they can benefit from hard-nosed capitalistic sensibilities every once in a while.

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That is the premise behind Social Venture Partners, a Seattle-based foundation that has adapted the venture-capital model to benefit local philanthropic organizations. SVP understands that businesspeople think in terms of timelines, deliverables, and measurable results. It also realizes that nonprofits gauge success on a less standard scale of smiles shared, barriers broken, and lives impacted. SVP is now working to merge the two worlds by encouraging local businesspeople to initiate long-term, investor-like relationships with charitable organizations that correlate with their individual talents, criteria, and interests.

Though designed to accommodate the individual strengths and resources of each of its 235 participants, SVP also acknowledges and attempts to leverage the power of teamwork. Every investor, or “partner,” can join a small, entrepreneurial grant committee or volunteer team that creates and maintains long-term partnerships with Seattle nonprofits. The partners each contribute at least $5,000 a year to a grant fund, and pool their business know-how, unique experience, and financial resources to create a much larger and more powerful effort. SVP introduces the alliance. The partners make it go.

“The model is actually a very simple idea underneath the verbiage and the practice,” says Paul Shoemaker, executive director of SVP. “The simple act of combining time and money makes a person more committed and more personally invested in a cause. Our partners want to roll up their sleeves and see the investment through.”

Three years ago, SVP’s president and founder, Paul Brainerd, was looking to apply his experience with Seattle’s high-tech business community to various philanthropic causes. Confident that a standard venture-capital model could bring about social good, he founded SVP as a vehicle to connect pro-active businesspeople with nonprofits that could use advice along with a bank check. Today, SVP works with 13 community groups and schools (http://www.svpseattle.org/investees-content.htm), connecting them to experienced professionals who help actualize and invigorate their charitable mission statements by writing marketing plans, installing accounting systems, producing PR videos, and more.

“The skills we’ve learned for succeeding in the for-profit world really can add value to the nonprofits,” Shoemaker says. “At some level, marketing is marketing and technology is technology.”

SVP invests in nonprofits for the long haul. When a new philanthropy joins the SVP network, it is awarded a one-year grant that allows the partners to scope out the group with the intent of building a five-to seven-year partnership. This year, in addition to the usual $300,000 in new grants, SVP expects to renew various partnerships by awarding an additional $700,000 to nonprofits already in the foundation’s investee portfolio.

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While participation in the entrepreneurial teams is not required, more than two-thirds of SVP partners actively give their time and expertise to the nonprofits. “If volunteers need some expertise that the team doesn’t have, they can go to another SVP partner beyond their group,” Shoemaker says. “Many times they get their friends or business associates involved. Partners bring to the nonprofits not only SVP resources, but offerings from all of Seattle.”

Because SVP operates locally, partners can readily witness the results of their charitable work in the surrounding community. Beyond the intangible benefits of volunteering, partners also join a web of people with whom they can discuss and work on philanthropy and business issues.

“We want partners to become more excited and informed about philanthropy so that they’ll be philanthropic sooner, smarter, and more often,” says Shoemaker, who believes that SVP must engage its partners in order to maintain interest and involvement in the long run. “We are building up our partner education calendar to offer more workshops, seminars, and discussions about personal philanthropy.”

Today, the idea is spreading beyond the individual, beyond the corporation, and beyond the region. Seattle SVP has spawned like-minded organizations in Austin, Texas (www.asvp.org) and Phoenix, Arizona (www.svpaz.org) that share the same mission, model, and name. More SVP sites are under development in Dallas and Denver, as well.

“We’re an evolution, not a revolution,” says Shoemaker. “We’re throwing some new ideas into the stew now and, in some Darwinian way, we’re adding to existing foundations so that philanthropy can move forward. The SVP model remains 99.9 percent locally driven. If local change agents have the leadership nucleus to launch a chapter of SVP, we’ll help them do it.”

For more information on SVP, visit http://www.svpseattle.org

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