An Interview with Liz Dow and Chris Satullo

Liz Dow (LD) and Chris Satullo (CS)

Describe your first meeting and your first impression of the person who you have ended up partnering with.

LD:  I met Chris through his writing. I was intrigued by the thought-provoking editorials he wrote...

It may seem counterintuitive, but economic slow-downs are known to spark entrepreneurial ventures. A Kauffman Foundation study showed that more than half the companies on the 2009 Fortune 500 list were launched during a recession or bear market, along with nearly half the firms on the 2008 Inc. list of America’s fastest-growing companies.Nonprofits manifest similar urges toward reinvention when times are tough, and the tumult of the past decade has accelerated their cooperative and collaborative efforts.

Describe your first meeting and your first impression of the person with whom you entered into a partnership.

THT: Nick Torres and I first connected through the Eisenhower Fellows Network. I am a 2005 Fellow, and Nick is a 2008 Fellow. In 2008, Fellows in Brazil and Eisenhower Fellowships hosted a conference in Ouro Preto, Brazil that focused on health and education.

Describe your first meeting and your first impression of the person.

PG: Thirty-three years ago a young woman—she was 26 at the time, I was 33—walked into the campaign headquarters of former six-term congressman William J. Green, who was running for Mayor in 1979.

Describe your first meeting and your first impression of the person who you have ended up partnering with.

Barbara:  I was just leaving the University of Pennsylvania, where I was director of news and public affairs, to work at Pew as a public affairs officer. Sharon called to welcome me and invite me to a meeting.

After September 11, 2001, when the world watched the Twin Towers fall, many employees at SEI Investments Company located in Oaks, PA, began their own efforts to help. Many employees individually began raising money and needed supplies for the recovery efforts. The company recognized this, and in an effort to help, pulled together all the disparate efforts within the organization, and thus began the start of its employee-led, company-sponsored philanthropy effort called The SEI Cares Program. These employee-led efforts have expanded substantially through the years and have helped foster employee engagement, grow meaningful partnerships with local organizations about which employees are passionate, and support a core value of the company in the global community around social responsibility.

There are so many nonprofit organizations and social entrepreneurs with great ideas. The difficult part seems to be scaling and expanding these great ideas. Jill Vialet, founder of Playworks, and her colleague Marjorie Nightingale, Director of Playworks Philadelphia, write about their experience scaling Playworks nationally, setting up shop in Philadelphia, and growing their network of supporters, including funders, schools, volunteers, and parents.

While creatively addressing the environmental challenge of global warming, NovaThermal Energy is a sound, profitable business strategy with numerous exit options. Working out of GoodCompany Ventures’ incubator site at 1650 Arch Street in Philadelphia, Elinor Haider has been leading an emerging company that has won the Global CleanTech Cluster Association’s Top 30 Later Stage Award, Artemis Top 50, CTSI Top 15 Utility Solution, and PACT Cleantech Company to Watch. Under Elinor’s guidance, NovaThermal Energy (NTE) has secured over $1.3 million in grant funding. This fall, NTE will embark on a $1 million Series A enterprise capital raise. In mid-August, I sat down with Elinor to learn a bit more about this exciting, home-grown Philadelphia social entrepreneur.

The nonprofit sector is becoming increasingly entrepreneurial. Leaders such as Alan Khazie and Michael Brown from City Year and Wendy Kopp from Teach for America have helped inspire a generation of nonprofit leaders who apply a combination of science and business practices to their approach: build a program, evaluate impact, adjust accordingly, prove a concept, scale it far and wide, and adapt accordingly to each new community. The use of strong assessment metrics and the mobility of program models have made nonprofit “scale” an attractive investment area for a growing number of funders. Organizations such as New Profit, Inc.and the Draper Richards Kaplan Foundation, among many more foundations, have made nonprofit growth the focal point of their funding. In 2010, 22 foundations representing about $80 billion in assets joined a coalition called “Scaling What Works,” committed to the large-scale growth of effective organizations.

The relationship between social entrepreneur and investor, nonprofit and funder, doer and donor is intriguing. You can talk to those with the capital and they will tell you how they are in constant search of innovation—to get in early and really make a difference by supporting an idea and making it a reality. You can talk to those with the ideas and they will tell you how they are in constant search of support (both capital and intellectual), looking to build a relationship with a funder and engage them in a way that they remain for the long haul. How these relationships begin, how they grow and change and how they ultimately serve some social good is at the core of this edition of the Philadelphia Social Innovations Journal.

You cannot have a conversation about impact philanthropy in Philadelphia without talking about The Center for High Impact Philanthropy (“The Center”). Established in the spring of 2006 by the dean of the School of Social Policy & Practice at the University of Pennsylvania and a small group of anonymous Wharton alumni, The Center provides independent analysis, education and other decision- making tools for donors concerned with maximizing the social impact of their funds. I had the pleasure of sitting down with The Center’s founding Executive Director, Katherina (“Kat”) Rosqueta and The Center’s Research Director, Carol McLaughlin.  Both women talked candidly and passionately about the work of The Center and the influence they are having on directing philanthropic capital towards impact.

Our personal ad would read, “Aspiring impact funders and nonprofit entrepreneurs seek likeminded for experimental relationship; willingness to cohabitate a must and hoping for more.” The experiment in question is a pilot effort being spearheaded by a small group of funders, funding collaboratives, philanthropy advisors and nonprofit organizations, including the authors of this article, at the Friends Center, a LEED platinum retrofit at 15th and Cherry Streets in Philadelphia. And despite the current trend towards incubators, accelerators and collective workspaces, this effort stands apart by bringing together a group that’s not always known for its collaborative energy: philanthropy. In literally breaking down the walls between a group of funding organizations and those representing funders, we’re looking to leverage one another’s strengths, expand our collective networks, and share what we’re learning through our investments.  

Looking to expand its programming to serve more homeless people, but concerned about its dependence on limited government and foundation funding, Depaul USA explored options to increase its earned income. A program-related investment from the Patricia Kind Family Foundation structured as a low-interest, multi-year loan allowed Depaul USA to purchase a commercial cleaning franchise. The goal of the cleaning business, Immaculate Cleaning Services, a for-profit limited liability corporation, is to generate unrestricted income for Depaul USA’s programs. Immaculate Cleaning Services also provides a secondary benefit of employing residents of Depaul USA’s transitional housing program. Depaul USA is now busy managing the day-to-day operations of Immaculate Cleaning Services, but plans to pursue additional social franchising opportunities in the future.

Delaware Valley Grantmakers (DVG) is Greater Philadelphia’s regional association of funders. As a membership organization DVG is dedicated to advancing the most effective practice of philanthropy in the region. Founded in 1988 and 150 members strong, DVG represents a wide variety of grantmakers, giving interests, and funding approaches. Because of this reach, the Journal asked Debra Kahn, Executive Director of DVG, to share her views on the topic of impact.

Conventional discussions about philanthropy focus on financial donations, financial incentives and subsequent returns on investment. In this article, Christine Jacobs focuses on linking her time and her talents with her money to advance the causes and organizations of her choice. Her career as an operations executive was not only financially fruitful but also provided her with strong leadership skills and a joy in working with individuals at all organizational levels. Earning money was a personal process for her; this money is now her entrée into a new phase of life. She feels that donors should understand their own skills and what they can offer to organizations. Similarly the organizations may need to open themselves up to the support and leadership that these new donors can provide.

Philanthropic funding addressing global poverty has traditionally come from governments, international aid organizations, large foundations and corporations. Individuals and family foundations who want to participate effectively have few ways to learn about existing solutions or to engage in a meaningful way. The globalislocal Fund, based in Philadelphia, recognizes this unmet need as an important opportunity to educate and connect philanthropists and family foundations with those working to create sustainable solutions to global poverty. globalislocal enables philanthropists to get to know  and significantly support social entrepreneurs and innovative systems change solutions.

Recently released guidance from the IRS has put program-related investments (PRIs) in the philanthropic spotlight. PRIs allow private foundations to invest their financial resources in causes consistent with their charitable missions. These investments often produce a greater charitable impact than dollars spent on traditional grant-making. But a historical lack of guidance in this area has made private foundations reluctant to engage in these innovative tools for giving. The new IRS guidance is encouraging social innovators to explore creative ways to maximize their charitable impact through the use of PRIs.

Collective giving—pooling one’s dollars with a circle of colleagues, friends, family, and acquaintances, in order to support nonprofits in a strategic manner—is redefining the way donors and nonprofits view philanthropy. It’s a new order of business best described as philanthropy with wide rather than deep pockets, capturing the smaller donations of many individuals and leveraging them into larger, more transformative grants.

Everyone is looking for measurable impact these days, in the philanthropic community and beyond. And while accountability is increasing, funders and nonprofits are facing fewer resources and capital. For the philanthropic community, the ever-present challenge is figuring out how to best invest dollars to reach maximum impact within supported organizations or affinity issues. The nonprofit community is facing a complex array of challenges in reaching impact, diminishing resources and challenging political and economic environments for their organizations and their clients.

Much of organized philanthropy—the world of private foundations set up to support nonprofit endeavors—is beginning to adopt collaborative, community-based models of action that were pioneered by foundations who give where they live. Many of today’s philanthropic leaders are seeking change strategies that go beyond bestowing grant monies from a comfortable distance. Some are looking to long-standing, place-based foundations for solutions. At the same time, those place-based foundations that want their investments to align with their missions often encounter barriers to investing locally. Faced with such obstacles, some forward-thinking foundations and their advisors may be developing some answers.