When Paul Brainerd began conceptualizing Social Venture Partners in the mid 1990s, he could not have imagined its impact on the world of philanthropy. At the beginning of 2004, SVP had 23 Affiliates across North America with 1,100 Partner Units. That is over 1,500 individuals involved in making our communities better. Over $11 million U.S. and thousands of volunteer hours have been invested in 145 non-profits.

Brainerd, the founder and former president of Aldus Corporation, worked with Scott Oki, Ida Cole, Bill Neukom and Doug and Maggie Walker to develop the vision for a philanthropic community using a model that paralleled venture capital practices in business.

Venture philanthropy has developed as a complement to traditional philanthropy, with both playing important roles. Traditional philanthropy generally supports non-profits through financial contributions. Venture philanthropy adds business expertise and resources over a long-term relationship. Venture philanthropy not only encourages philanthropy, but works hand in hand with non-profits to improve their work.

When SVP Seattle launched in 1997, and interest in this new approach to philanthropy grew, SVP organizations began developing throughout North America.

By 2001, a loose network of SVPs had formed. In mid 2001, representatives from the 17 SVPs unanimously decided to create Social Venture Partners International to support and advance this network.

top

• Funding typically spans several years
• Funding gradually scales back as the non-profit's capacity grows
• Funding is for operating support and is accompanied by a capacity-building component
• Outcome-based investing
• Connection with donor via volunteers and mentors in a long-term, structured relationship
• Financial support and volunteer business expertise and community contacts
• The financial investment is the start of the relationship

• Funding is typically a one-time grant
• Funding completely ends at a specific date or when grant funds run out
• Funding for specific programs or services
• Proposal-based grant making
• Connection with donor via applications, phone communication and periodic visits
• Financial support only
• The grant is the end of the relationship

top

Social Venture Partners is timely. We are living in an age of affluence. Thanks in part to the technology boom and Alberta's healthy energy sector, community foundations have witnessed their most spectacular growth period ever. People are not restricted generally by budget constraints of the past. More and more diverse people have a permanent income stream that more than adequately meets their expenses. Whereas a generation ago only a select elite, usually older, could ponder philanthropy, many are experiencing this earlier in life, and asking: What choices am I going to make with my financial resources now that accumulation is no longer a high priority?

Over the next five decades, it is estimated that $40 to $136 trillion in the US alone will be transferred to the next generation and other beneficiaries. Based on typical giving patterns, a reasonable estimate is that $6 to $25 trillion will go to charity. To give some context, individuals annually contribute $180 billion in the US and $5 billion in Canada to non-profits - the wealth transfer estimate is indeed significant.

While research at Boston College's Social Welfare Research Institute indicates families at every level of income and wealth are equally generous, there is a positive relationship between wealth and the percentage of wealth contributed to charities.

While wealth among many is secure, it is widely known that income disparity continues to grow and the needs in communities are rising. There will continue to be fewer government dollars available to address critical social problems. With 85% of private giving coming from individuals, SVP's role is to teach donors what the needs are in the community and how to resolve them.

SVP will have a growing base of interest from which to recruit. Almost half of North American adults volunteer, representing a value of $17 billion in Canada. Ninety one per cent of volunteers make charitable donations versus 74% from their non-volunteer counterparts. This data supports the SVP model of combining time and money.

top

Social Venture Partners Calgary fits into the trend of the changing relationship between a non-profit and its supporters. As the Forum of Regional Associations of Grantmakers writes, 'Not so long ago, nonprofits tended to list their team as staff, board, and volunteers, placing donors on the outside, mailing in checks. Now more organizations understand that donors are part of the organizational team that enables nonprofits to reach their goals.' While every non-profit and donor is different, as the chart below illustrates, the expectations from both have tended to change over time.

Old Way

• Non-profits assumed they should never tell a donor anything but good news for fear of jeopardizing the donors commitment to the organization.
• Donors were seen only as a source of money.
• Donors often supported one organization for a lifetime.
• Giving was simply 'charity' or 'tithing' something donors did automatically but at a distance.
• Donors at similar giving levels were treated more or less the same by the non-profit.

New Way

• Non-profits are more straightforward; more likely to talk with donors about emerging problems and plans to address them; and more likely to educate donors about their organization's natural up-and-down cycles.
• Donors are seen as more than financial contributors; they are also understood to be a source of expertise and connections to other resources
• Greater awareness of options and of the range of potential donor/volunteer experiences means that donors 'shop around' more.
• Donors follow their favourite non-profits more closely and are more focused on evidence of effectiveness.
• Organizations now work harder to discern what donors want - be it appreciation; connection to issues; building relationships and friendships; prestige; or a simple tax benefit.

Source: How Effective Nonprofits Work: A guide for donors, board members and foundation officers by Marcia Feston & Marianne Philbin, Forum of Regional Association of Grantmakers

top

While we are making amazing advances in so many aspects of our society, some issues continue to plague us. While we are living in a time of explosive wealth, we are also living in a time of unprecedented homelessness and poverty, growing environmental concerns and fear for our basic safety. There are 100,000 non-profits in Canada.

As a result, non-profit organizations, and organizations like Social Venture Partners Calgary which support them, have an increasingly important role in our society. While it has always been important to support them in their work, a non-profit's ability to be a high-performing organization is as important as the programs they run. The smarter they are as a business, the more successful they can be at helping needy people through the programs they run.

Capacity building is the work of becoming a high-performing organization. It is:

The development of core skills, management practices, strategies and systems to enhance an organization's effectiveness, sustainability and ability to fulfill its mission.

In short, capacity building work helps non-profits help themselves.

Social Venture Partners Calgary is focused on this capacity building work. It is not only a market niche for us, it is true to our venture philanthropy model. Venture capitalists inject business expertise and resources over a long-term relationship; as Partners of SVP we do just the same except with non-profits. Partners invest their skills less in the 'what' of the organization (the programs), but more in the 'how' (the business capacity) and the 'why' (the general business strategies). Partners are not usually social workers or experts in programs. Instead they are usually experts in business.

While traditional funding supports capital projects or programs, a shift is occurring in funding capacity. Grants for capacity building are increasing dramatically.

What Capacity Building Is and Isn't: What SVP Is Focused on

top