Finding Philanthropys Sweet Spot Kristen Burns, President REDF May 16, 2006.

Finding Philanthropy’s Sweet Spot

Kristen Burns, PresidentREDF

May 16, 2006

2Finding Philanthropy’s Sweet Spot -- May 16, 2006

Meet Ted


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


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


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


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


Ted’s progress


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.


www.redf.org

www.jumaventures.org

www.evergreenlodge.com

Finding Philanthropys Sweet Spot Kristen Burns, President REDF May 16, 2006.

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Transcript of Finding Philanthropys Sweet Spot Kristen Burns, President REDF May 16, 2006.