Creating Economic Stability
Venture philanthropy represents a radical merger between the nonprofit and for-profit worlds. Nonprofits are adept at delivering their services to the people they support - however, they have difficulty reaching more people. For-profit practices, technology, and strategies offer valuable lessons that nonprofits can use to help them run their organizations more efficiently and effectively, thereby increasing their capacity.
As a venture philanthropist, Power of Love Foundation provides long-term funding to help grassroots organizations that committed to social change in the areas of HIV and AIDS increase their capacity. Power of Love staff and volunteers also provide organizational expertise by actively partnering with the grassroots organization. With funding taken care of and with the help of a committed knowledgeable partner, leadership within the grassroots organization can refocus from fundraising to creating a more efficient organization able to widen its reach.
Our process for the selection of organizations to support follows a rigorous approach:
- We carefully evaluate each organization for its work and its potential for making a long-term impact.
- We assess the organization’s financial stability as well as the quality of their management team.
- We check their references through dialogue with local and international funders who have supported the organization in the past.
- Most importantly, we spend a great deal of time on the ground, with potential partner organizations. This gives us the opportunity to witness the working of these organizations (as an insider) in a manner that cannot be done remotely from the US.
With the organizations that we choose to fund, we build long-term relationships involving funding and for-profit experience (3-6 years versus yearly grants).
Best practices in administration, marketing, financing, and internal organization adopted from the for-profit sector can be successfully implemented in a not-for-profit organization to help it serve more people without increasing funding. Information technology also provides a way for not-for-profit organizations to greatly increase their efficiency with minimal investment. For-profit strategies that define goals, measure progress, and establish accountability can be used to monitor how well the not-for-profit organization is performing. This data can be presented by the organization to attract more funding from a variety of other sources. Eventually we can exit from the organization, confident of its continued success.
The learning is two-way: as we teach these organizations how to leverage technology and resources, we help them to document their lessons learned and stories in the fight against the AIDS epidemic. We share this knowledge with our other partners and projects to avoid mistakes and to fast-forward development of programs in other regions.