Learnings from New Profit’s Emerging Portfolio Perspective

Learn how we are bolstering our social entrepreneur support model to center our values of equity and proximity


New Profit was founded in 1998 based on a core insight about what it takes to grow and deepen social impact. Where for-profit entities were able to continuously grow and scale, non-profit social impact organizations stalled out. We believed a big part of the reason why was a lack of access to unrestricted growth capital and world-class strategic advice. Since our founding, we have worked to provide these two things—giving unrestricted grants to leading organizations and providing support on board development, leadership coaching, and holistic strategy. Over the course of these two decades, we also learned and evolved in our thinking. 

In early 2020, New Profit embarked on a learning journey to update our portfolio strategy. Throughout this work, we looked at lessons from our history to identify ways of working that we can celebrate and continue, as well as interrogate and update assumptions and blindspots that are no longer compatible with our goals of equity and systems change. This required us to look at and question our beliefs about growth and scale, our perspective on leadership capabilities, and much more. 

We are excited to share with you all the outputs of that work—what we call our Emerging Portfolio Perspective. This is and will always be an emerging perspective as we seek to continually evolve and update our view based on what we are learning from the social entrepreneurs we support and their communities. We hope this emerging perspective will enable New Profit to provide meaningful support to social entrepreneurs as we pursue significant growth over the next three years, as we continue to invest in organizations tackling a broad set of challenges using varying impact models, and as we invest in the largest group of Black, Latine/x, and Indigenous leaders in our portfolio history. 

What We’ve Learned Along the Way

Throughout this work, the team surfaced a number of important concepts and themes that we committed to as core to New Profit’s vision for impact. Some of these re-affirm what has long been true about our work, while others signal changes and evolution in our approach. We share these here to help you understand what we see as the commitments and changes that are integrated into this work, as well as to provide shared language and build a shared perspective around our work going forward. As we continue to learn about the needs of our social entrepreneur partners, their communities, and our role in supporting them, we invite your thoughts and feedback as learning partners in this challenging and complex work of advancing equity and opportunity in America. 

1. Equity and Systems Change
New Profit has always sought to invest in organizations focused on expanding opportunity for all in the US. As we embarked upon our own introspection and equity journey, we strengthened our belief that equity is the ultimate objective of our portfolio work and that this will only be possible through fundamental systems change. We and our portfolio organizations seek to challenge, disrupt, and re-architect systems that today are biased, structurally racist, and interconnected in order to pursue equitable outcomes.

Significant and lasting social change is only possible if the conditions which hold these social problems in place are shifted in ways that dismantle barriers to opportunity and produce equitable outcomes across all communities. While we’ve always invested in social entrepreneurs and organizations that aspire to systems-level change, our understanding of systems change, and the models that organizations might use to achieve it, has broadened considerably beyond the “scaling proof points” approach we once ascribed to.

Through our work in recent years, we have become much more explicit in our commitment to interrupting systemic racism and bias, as well as the ways in which doing so influences our model and the work of our organizations. This work, however, is constantly evolving. We will continue to nuance and advance our perspective on equity and systems change as we invest in and learn alongside a diverse group of leaders and organizations with a wide array of impact models.

2. Proximate Social Entrepreneurs and Organizations
Our founding model was based on our belief that talented social entrepreneurs who are deeply connected to the problems they are trying to address are experts and their innovations serve as proof points in their respective fields. Social entrepreneurs remain crucial to our theory of change. Their focus on disrupting and reshaping systems through a variety of organizational approaches is a powerful lever for transformative change. We have also come to understand that it is essential that social entrepreneurs and their organizations are deeply connected to the communities they serve and are meaningfully guided by these communities’ input, ideas, agendas, and assets. This applies to the leader and the stance they take as well as the organization as a whole. The organizations best positioned to catalyze meaningful, sustainable change are those that prioritize proximity*—meaning those that center, learn from, and adapt to the needs of their core constituencies as a continuous practice.

This belief in the power of proximity emphasizes our commitment to achieving equitable outcomes and requires us to broaden our own perspectives on who we support in our portfolio. New Profit, like many funders, has historically invested in organizations we had learned about and connected to—those already in our network—and all too often this meant our portfolio was led by predominantly white social entrepreneurs. We are committed to investing in proximate social entrepreneurs, including prioritizing and increasing our investments in social entrepreneurs of color who are proximate to dispel the notion that there is a limited pipeline of excellent entrepreneurs of color and to demonstrate that those who bring to life the power of proximity have greater, more sustainable impact. 

3. Progress not Victory
In the past, we’ve often talked about “winners” and our “definition of victory”, and we held a relatively narrow view of what success could look like for organizations that focused largely on “proof point” or direct scale models, and a particular structure or style of leadership. 

In our work with Deals going forward, we are focused on helping portfolio organizations make maximum progress aligned with an aspirational “Deal Impact Compass”** instead of trying to get all portfolio organizations across the same finish line. This focus on progress rather than a prescribed destination is in keeping with our four-year support model, reflects our thinking around systems change, and recognizes our growing understanding of the various and rich ways organizations are achieving impact. Organizations we support will enter our portfolio at different starting points and are pursuing a diversity of models to achieve impact. We recognize that as organizations center equity and advance systems change, their paths will differ based on the needs of their constituencies and the contexts in which they work. As we build our understanding of and invest in more systemic change approaches, we are learning that organizations tend to operate in more emergent ways requiring us to hold a more flexible perspective on the paths organizations take toward change. We will therefore follow the expertise of social entrepreneurs and continue to build and apply our pattern recognition and ongoing learning to support organizations in making progress guided by the Deal Impact Compass. 

4. Philanthropic Role Models
New Profit has long been committed to creating trusted partnerships with social entrepreneurs—standing shoulder-to-shoulder with them—and affirming that philanthropy is more powerful when funders listen to social entrepreneurs. We hold this partnership tenet as core to our work, and aspire to model ways for our institutional philanthropic peers and individual donors to discuss and disrupt the power dynamics inherently present in philanthropic relationships. How we work with our portfolio organizations as true partners and how we show up as funders are important “outputs” from our portfolio work that are built upon a learning relationship and are critical to our firm-wide efforts to increase equity. We seek to support and learn from portfolio organizations through our trusting relationships and, at the same time, demonstrate to our philanthropic peers what capacity-building support that centers our entrepreneurs and equity can look like.

Moving Forward: Recommitting Ourselves to Learning

In New Profit’s early years, we were building our practices and pattern recognition together with our social entrepreneurs, charting a path to see what was possible in terms of building scaled, high-impact organizations by doing it together and in partnership. We were truly shoulder-to-shoulder, offering insight where we could and developing tools to test out and refine with our social entrepreneurs. In some ways, we are going “back to the future” as we enter this next chapter of our work.

 We are and will be learning on a number of fronts—we are investing in a broader set of models and approaches, we are supporting a more diverse group of leaders with varied backgrounds and experiences, and we are centering equity and systems change while continuing to develop our perspective in these areas. As we continue to evolve our support model, we will hold a stance of humility and curiosity, and maintain a commitment to feedback. We will invest in our own capabilities for continuous improvement, and commit to regularly adapting our practices. 

We are excited to share with you some updates on where we are in our thinking. Since aligning on these principles and ideas early in 2021, the portfolio team has been working to integrate these values into our core tools and approaches. We are asking questions like – what does this mean about how we select organizations to support? How should we think differently about investing in our own capabilities? What does this mean for impact measurement? We are experimenting and trying new things and we know it is only a starting point. We will rely upon all of you as partners in purpose to call us into living these commitments and share with us when you see where we can continue to grow. 

If you would like to learn more about our portfolio “Impact Compass” and what it means for our portfolio work, reach out to Molly O’Donnell and Amina Fahmy Casewit.

*We take inspiration from and give thanks for the words and ideas of Bryan Stevenson, Founder & Executive Director of Equal Justice Initiative. 

**We have developed a Deal Level Compass that paints an aspirational vision for what we believe our Deals can achieve over time (not necessarily in our four-year investment period). This compass reflects our most fundamental beliefs about the capabilities that enable organizations to achieve their greatest aspirations. We articulate our Compass along four key dimensions: Impact, Equity & Proximity, Adaptive Leadership, and Sustainability.