Post on 31-Mar-2015
Finding Philanthropy’s Sweet Spot
Kristen Burns, PresidentREDF
May 16, 2006
2Finding Philanthropy’s Sweet Spot -- May 16, 2006
Meet Ted
3Finding Philanthropy’s Sweet Spot -- May 16, 2006
The good news
Many types of organizations and individuals have goals that include accomplishing a social mission.
Ted (and others like him)
Nonprofit organizations• Social service expertise• Primary goal of achieving positive social
outcomes• Often financially constrained
Social entrepreneurs• Business expertise• Creativity in developing double
or triple bottom line solutions• Hands-on role
Foundations• Can make grants and/or
invest assets • Varying degrees of non-
financial support• Well-positioned to strengthen
non-profit organizations
Socially-minded for-profit investors• Financial return important• Varying levels of interest in
social return
4Finding Philanthropy’s Sweet Spot -- May 16, 2006
The challenge
With so many possible participants in the solution, how can resources be maximized – while still accommodating each entity’s needs and limitations?
Social goals
Nonprofit structure
Financial goals
Desire for equity investment model
Planning support Capital investment
Social mission expertise
Business acumen
5Finding Philanthropy’s Sweet Spot -- May 16, 2006
Juma Ventures(nonprofit)
The creation of Evergreen Lodge
Each entity identified and played a role that matched its “sweet spot.”
Farber FellowsLee Zimmerman &
Brian Anderluh
• General operating support• Collateral for line of credit• Capacity-building activities
(e.g., financial systems, social outcomes measurement and analysis)
• Farber Internships and Fellowships
The Phalarope Foundation
• Farber Internships and Fellowships
Equity and debt investors• Commercial loans• Equity investments from private
investors – both individuals and The Roberts Foundation (REDF’s former parent)
Evergreen Lodge(for-profit)
• Family-oriented hotel bordering Yosemite National Park
• Youth development program serving at-risk 18-24 year olds from San Francisco
6Finding Philanthropy’s Sweet Spot -- May 16, 2006
The result
Evergreen Lodge is succeeding in meeting both financial and social goals.
Financial/business performance
• Frommer’s Guide (2005) Favorite
• Over 90% occupancy throughout peak season
• $4M annual revenues, ~30% EBITDA
• On track to provide 15% return to equity investors
• Making first equity distribution of $300K this year
Investors’ varied needs are met
Social performance
• Four-part on-site youth program:
– Employment and training
– Individualized social service support
– Outdoor recreation
– Healthy residential community
• 12 youth internships each year, 50 youth served to date
• Successful transitions into adulthood for graduates, including significant increase in employability, wages, and stability
7Finding Philanthropy’s Sweet Spot -- May 16, 2006
Ted’s progress
8Finding Philanthropy’s Sweet Spot -- May 16, 2006
Lessons
• Different philanthropic investors have different sweet spots.
• When philanthropic investors identify, articulate, and develop their own sweet spots – as for-profit investors have – it creates new social and financial opportunities.
• Collaborations among philanthropic investors can generate creative and powerful models for affecting social change.
9Finding Philanthropy’s Sweet Spot -- May 16, 2006
www.redf.org
www.jumaventures.org
www.evergreenlodge.com