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What is Venture Philanthropy?
What other organizations are doing this kind of work in the United States?
What is New Profit’s ultimate goal?
How does an investment in New Profit differ from a donation directly to a portfolio organization?
In addition to investing in New Profit, how can individuals or institutions support New Profit’s work?
What is New Profit’s selection process for portfolio organizations?
Is my nonprofit organization a good fit for New Profit’s portfolio and how do I apply?
Does New Profit invest in for-profit, socially responsible organizations?
What is the relationship between Monitor Group and New Profit?
What is Venture Philanthropy?
Venture philanthropy is a set of related approaches developed by individuals from the private, nonprofit and philanthropic sectors across the United States in the 1990s, and more recently in Europe and beyond. Venture philanthropy is characterized by a focus on performance and impact, investor engagement and the financial support of strategies and organizations rather than programs. Most practitioners of venture philanthropy make multi-year investments in a relatively small number of organizations. Responding to an array of challenges associated with more traditional forms of philanthropy, venture philanthropy models vary along many dimensions: some focus their support on an issue area (e.g., education) or a region (e.g., New York or Washington, DC); other are issue-neutral and national; some focus more on investor engagement, while others emphasize the relationship with their portfolio of organizations; still others focus on seed-stage organizations and their leaders, while others focus on replicating scalable models; and so on. A helpful reference for those interested in learning more about venture philanthropy is Venture Philanthropy Partner’s series of available in PDF format at www.vppartners.org.
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What other organizations are doing this kind of work in the United States?
Over the past few years an increasing number of organizations have emerged that identify themselves as practicing venture philanthropy (sometimes also called high-engagement philanthropy, though these terms are not always synonymous). Some of the best-known examples are The NewSchools Venture Fund, Venture Philanthropy Partners, Social Venture Partners International, REDF (Roberts Enterprise Development Fund), and Robin Hood Foundation. Information about venture philanthropy in the United Kingdom and Europe can be found at the European Venture Philanthropy Association.
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What is New Profit’s ultimate goal?
Our ultimate goal is to create an environment in which visionary social entrepreneurs have the necessary strategic and financial resources to grow their organizations to scale and achieve sustainable, transformative social impact.
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How does an investment in New Profit differ from a donation directly to an organization?
An investment in New Profit differs from one made directly to an organization in that it is significantly leveraged. Investments in the New Profit fund are leveraged in at least a 2:1 ratio by the intellectual capital and strategic resources contributed by New Profit, Monitor Group, and other partners, and continuously monitored by New Profit portfolio managers. In addition, New Profit’s blind fund enables individuals to pool their resources and spread their “risk” across investment in a collection of rigorously screened organizations. An individual investor does not typically have the resources to do equivalent due diligence or manage spread of risk on their own.
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In addition to investing in New Profit, how do individuals or institutions support New Profit’s work?
In addition to the financial support that individual investors provide to New Profit, these dedicated individuals bring significant expertise and other resources to our pooled investment model. Our investors are passionate about creating high social impact with their philanthropy, often seeking engagement with social entrepreneurs and their strategic challenges, as well as with New Profit itself.
New Profit’s institutional investors are major philanthropic foundations that provide capital to support New Profit’s mission, and increase their leverage by uniting the forces of traditional philanthropy and venture philanthropy. Institutional investors support the development of key New Profit capacities such as intellectual capital. New Profit’s joint venture investment in Kids Voting USA with the John S. and James L. Knight Foundation is one example of partnership extending beyond financial grantmaking.
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What is New Profit’s selection process for portfolio organizations?
New Profit chooses portfolio organizations using a rigorous evaluation process against key selection criteria. Our due diligence process involves New Profit investors, board members, and peer social entrepreneurs who select a small number of investments each year from a pool of several hundred candidates, and entails extensive interviews with management teams and board members, competitive landscape analysis, review of financial performance, and interviews with other key stakeholders. We view the due diligence process as critical preparation for undertaking long-term partnerships with potential portfolio organizations, spending at least 80 hours with finalists to determine the organization’s fit.
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Is my nonprofit organization a good fit for New Profit’s portfolio and how do I apply?
New Profit supports social entrepreneurs and organizations whose ideas have the potential to address the root causes of our nation’s most pressing social problems. We seek to create a broad community of scaled, high-impact organizations achieving sustainable, transformative social change. Candidates for the portfolio must meet two initial criteria to be considered for New Profit support: 1) have established 501c-3 status; and 2) be headquartered in the Northeast. In addition, we use a set of selection criteria that guides our investment decisions in our due diligence process, which occurs approximately once a year. To submit a statement of interest in consideration for the New Profit portfolio, click here.
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Does New Profit invest in for-profit, socially responsible organizations?
Presently, New Profit is committed to working only with organizations with nonprofit, 501(c)(3) status. However, we are always interested in hearing about good ideas in both the nonprofit and for-profit sectors that have the potential to create large scale social change.
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What is the relationship between Monitor Group and New Profit?
Five years ago the leadership at Monitor Group saw the possibility for engaging in transforming philanthropy by supporting New Profit Inc. That vision has evolved to become one of the most comprehensive and high-impact cross-sectoral partnerships in the country. Today, the collaboration is an essential part of Monitor's work to catalyze innovations that accelerate the successful application of resources—human, intellectual, and financial—to create positive social outcomes. This unparalleled partnership between a nonprofit organization and an international strategy consulting firm has enhanced the capacities of both organizations, particularly in the areas of talent development, networking and community building, and has helped evolve new approaches to solving entrenched social problems.
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