Understanding the Unique Challenges for Democracy Entrepreneurs

Research from New Profit's Civic Lab surfaced challenges facing entrepreneurs who are building civic trust

Launched in 2019, New Profit’s Civic Lab is the nation’s first nonpartisan venture philanthropy initiative to invest in democracy organizations led by proximate entrepreneurs. In addition to providing unrestricted funding coupled with strategic capacity-building support, Civic Lab is working to build the ecosystem for democracy entrepreneurship. 

In early 2021, New Profit launched an open application period for its second cohort of Civic Lab. We invited applications from entrepreneurs across the country who are building civic trust and inclusive democracy in America. During the selection process, the Civic Lab team reviewed 117 applications from nonpartisan organizations and conducted due diligence interviews with the entrepreneurs and their stakeholders Through our analysis of applicant data, Civic Lab has generated unique insights into the challenges faced by these entrepreneurs, particularly women of color, and the role philanthropy can play in removing barriers for proximate leaders. These findings were published in a new report “The State of Democracy Entrepreneurship: Insights from New Profit’s Civic Lab

The report analyzes democracy entrepreneurship across five critical dimensions: demography, geography, budget size, age of organization, and strategies employed. The authors detail five key takeaways:

  1. Open investment application cycles facilitate inclusive philanthropy.
  2. Democracy organizations are in strong need of post-election and sustained philanthropic investments.
  3. Philanthropy needs to close the funding gap, particularly for women of color.
  4. In addition to capital, democracy entrepreneurs are seeking peer-learning communities.
  5. The democracy sector lacks robust entrepreneur- and practitioner-focused research.

“Even during the height of political giving, women of color are shortchanged—despite the monumental role they have and continue to play,” noted Yordanos Eyoel of New Profit and Aimee Allison of She the People in a recent op-ed they co-authored in The Hill. “Women of color are not only reforming the existing broken and discriminatory practices in our democracy, they are also entrepreneurs who are building and growing new institutions that, if effectively resourced, can help us realize a truly multi-racial democracy.”

In the absence of robust data and sector-wide visibility, there is often a duplication of efforts and high levels of inefficiency in the landscape. It is precisely because of these challenges that Civic Lab is sharing these findings from its investment selection cycle. In the report, we invite others to join us in developing an evidence base to uncover insights into democracy entrepreneurship, and to help build the infrastructure to enable a thriving ecosystem.

ICYMI: Revisiting 2020 with New Profit’s Civic Lab

The events of 2020 pushed us all to reconsider the ideological and structural foundations on which our country was built. The pandemic and the renewed call for racial justice following the police killings of George Floyd, Breonna Taylor, and so many others put a spotlight on who the systems in our country are harming. And while the November elections demonstrated the resilience of our electorate and election workers, the deep political and cultural fragmentation highlighted the urgent need to build civic trust.

In response to the year’s historic events, our work focused on supporting and equipping entrepreneurs and organizations, in our portfolio and across the social impact sector, who are on the frontlines of addressing systemic inequities. This work included: