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Giving Smart, Getting Impact - New Models Of Social Philanthropy

Raj Melville

The non-profit sector is the fastest growing industry sector around the world.  In 2006, charitable giving in the US was $295 billion, setting a new annual record.  Each year, 65% of American families contribute to charity.  But, with more than 1.6 million non-profits in the US alone, deciding where and how to give remains a constant challenge for individuals and families committed to philanthropy.

A standing room audience of over a hundred attendees was treated to a lively panel discussion on “Giving Smart, Getting Impact - New Models of Social Philanthropy” that tried to provide the audience with some guidance on charitable giving. The panel was hosted by TiE Boston’s Social Entrepreneurs SIG on April 9th at the Foley Hoag Emerging Enterprise Center in Waltham. The panel brought together three different perspectives: Desh Deshpande serial entrepreneur and trustee of the Deshpande Foundation; Miki Akimoto co-founder of Saffron Circle, the first Asian giving circle in Massachusetts; and Jim Matheson partner at Flagship Ventures who is also actively involved with Massachusetts based social ventures. Each speaker explained how they got involved in the field of social entrepreneurship and their particular approach to supporting organizations.

Desh Deshpande started out as a technical entrepreneur as part of the founding team for three startups. However Desh said that in the past few years he was committed to nurturing at least one technical and one social entrepreneur. Elaborating on his social investments Desh described the work of the Deshpande Center for Technological Innovation at MIT that was setup with the objective of connecting the creative research ideas at MIT to the business community of investors and entrepreneurs. Applying the same principles in India, Desh’s emphasis has been on encouraging social entrepreneurial models that can scale. He highlighted the example of Akshaya Patra, one of his social ‘investments’, that has applied innovative technology and streamlined processes to scale up their operations to feed over 800,000 school children a hot, nutritious lunch every day.

Jim Matheson has also applied his entrepreneurial experience in the venture capital community to help support social organizations like Common Impact and the Center for Women and Enterprise. He spoke of the three things one can give back as a volunteer as “Time, Talent and Treasure”.  One of the challenges at most companies is making sure you can keep great people engaged and excited to work for the organization. Jim’s company, Flagship Ventures, helped incubate Common Impact a non-profit that allows employees to engage with non-profits while providing employers with a motivational tool and a well managed channel for their corporate responsibility efforts. By matching corporate volunteers to specific non-profit projects, Common Impact helps address key social needs while ensuring there is demonstrable organizational impact.

Miki Akimoto, as one of the co-founders of Saffron Circle, described her organization as the first multi-generational, pan-Asian group that is focused on supporting social change within the Boston Asian community. She provided a different perspective for the audience by showcasing Saffron Circle’s model that allowed individuals to pool their contributions to have significant social impact. By keeping the individual commitments to just $250 per year for two years, Saffron Circle allows the average person to get engaged and have a voice in how the funds are used.  

The audience engaged in a spirited discussion following the opening remarks. The panel observed that the model for social impact has changed. Progressive organizations are focused on impact first and then build models to raise funds – whether from grants or from earned revenue streams. Increasingly the “Sally Struthers” model of fundraising is being replaced by appeals that point to impact and results. In turn philanthropists also are looking for measurable impact and the ability to scale ideas.  A challenge for non-profits is coming up with measureable metrics of impact that can be used to evaluate effectiveness.  

Another challenge is the need to balance fundraising activities with the core work of the organization. The panelists pointed out that it was similar to what a for-profit startup has to do when raising a financing round. The startup founders need to estimate the amount to be raised for the projected burn rate. Keeping employees motivated and focused is another major issue for non-profits. The good news is that the younger generation is getting more engaged in the non-profit sector.

For individuals who are looking to support social entrepreneurs, there are a number of avenues to enable them to get the maximum impact for their dollar. In addition to Saffron Circle, groups like the Social Innovation Forum screen social entrepreneurs and select a few each year to coach and present to a network of interested donors. For those looking to donate directly, online resources like www.Guidestar.org provide information on non-profits including copies of their IRS form 990 filings.

In response to a question from the audience, Vikas Goyal, who moderated the panel and is the co-chair of the TIE Social Entrepreneurs SIG (SE SIG), described how the TiE SE SIG provides mentoring and network support to emerging social entrepreneurs. For example, the TiE SE SIG was able to connect a growing non-profit, Cradle to Crayons, to executives at Sterling Commerce for help on some of their supply chain issues.  In addition several organizations have been coached by TiE SE SIG members.

For more information on some of the organizations mentioned in this article:
Akshaya Patra: http://www.akshayapatra.org/
Common Impact: http://www.commonimpact.org/
Center for Women and Enterprise: http://www.cweonline.org
Saffron Circle: http://www.saffroncircle.org/
Social Innovation Forum: http://socialinnovationforum.org/
Guidestar: www.Guidestar.orgTiE Social Entrepreneurs SIG: Vikas Goyal vgoyal@exterapartners.com

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