April 1, 2003

By Todd Cohen

Web Social Action
Venture partners aim to connect

Social Venture Partners, a five-year-old effort to tap the wealth and know-how of donors to help nonprofits boost their internal operations, has grown into a network of donor groups in 23 cities across the United States that now is looking for ways to strengthen itself.

Aiming to keep its operation lean, the network and its affiliates are developing high-tech and low-tech solutions to track, share and make better sense of what they’re learning through their work with donors and nonprofits.

“We need more bandwidth to get at how to do a more explicit, constant and strategic job and take what we’re learning and disseminate it,” said Paul Shoemaker, executive director of Social Venture Partners (SVP) in Seattle, Wash.

The SVP network and its affiliates are using the Web, email and teleconferencing to talk to one another and exchange ideas and information. The network also plans to use software to quantify and measure the impact of its affiliates’ work.

Donors contribute $5,000 each to local affiliates and also act as grantmakers, selecting nonprofits to receive grants that typically average $30,000 a year for three to five years. Donors also lend their business expertise to the grantees, advising on topics such as marketing, technology, finance, accounting and fund and board development.

“We’re not about big dollars,’” Shoemaker said. “We’re more about the people.”

Most affiliates, which also might hire consultants to help nonprofits evaluate the impact of grants, employ staffs of one person or fewer. “It’s a partner-driven model,” said Tom Donlea, director of Seattle-based Social Venture Partners International, the network of SVP affiliates that was formed in 2001.

SVP’s mission is to spur philanthropists to be more strategic in their giving, and to deliver strategic volunteer support to help nonprofits strengthen their organizational “capacity.” Founded by entrepreneur Paul Brainerd after he sold software-maker Aldus Corp. to Adobe in 1994, SVP has recruited 1,800 donors, up 40 percent in the past 18 months. Donors at SVP affiliates have invested $8.6 million and thousands of volunteer hours in 107 nonprofits.

SVP in Seattle, the oldest affiliate, has raised nearly $6 million from 265 donors, made grants totaling $1.5 million in 2002 to 29 nonprofits. The network, which has affiliates in Calgary and Vancouver and this year will add others in London and Brisbane, Australia, is looking for ways to strengthen communications and help affiliates share what they have learned.

To build their organizations, for example, most affiliates used “SVP-in-a-Box,” a Web-based document developed by the Seattle affiliate spelling out how it was created.

Using that document, affiliates recruit partners, who pool their money and invest in and volunteer for nonprofits. The affiliates help donors learn about philanthropy, family giving and community issues.

Some affiliates add to that basic model. The Kansas City affiliate, for example, won federal approval to make loans at low or no interest to nonprofits, with donors acting as loan officers and providing technical assistance on business development.

Nobody in the network has collected or summarized the separate strategies pursued by individual affiliates. So, the network is developing version 2.0 of “SVP-in-a-Box,” aggregating its affiliates’ combined experience into a “best-practices” document that will be available online in July.

The network’s Web site at svpintl.org already features a password-protected “affiliate zone” that individual affiliates use to post documents. It also has PowerPoint presentations highlighting best practices on topics, such as recruiting and educating donors and developing a process for donor committees to make grants.

To help affiliates learn from one another, Donlea convenes a one-hour teleconference every week or two that focuses on topics, such as helping donors create personal giving plans and involve their children in philanthropy to helping nonprofits be more effective. Using a product known as Spiderphone, the network records the calls, including related PowerPoint presentations, and has created an archive of the teleconferences on its Web site.

The network uses another product, known as realityfusion, to run Web conferences for affiliate staff who are equipped with Web cameras and headsets. The network publishes an email newsletter and listserve, and documents the listserve’s email traffic, posting summaries that are organized by topic on its Web site.

And, it is launching a pilot project with its Pittsburgh affiliate to test software that will track and measure the impact of its work with donors and nonprofits.

Ultimately, said Donlea, the network wants to find ways to “build communities of practice to strengthen the connections” among the affiliates. “There needs to be a common thread,” he said, “so there’s trust and understanding between people who know how to reach out to one another and are comfortable asking for help.”

GivingCapital on block

GivingCapital, a New York City firm that markets a Web-based system that financial institutions use to offer donor-advised funds to clients, is the active target of prospective buyers and merger partners. “We’re in pretty extensive discussions with a number of players,” said its CEO, Chris Blunt.

Formed in 1999, GivingCapital employs 26 people, double the total two years ago, and has a client list that includes the American Bar Endowment, American Express, Bank of America, Credit Suisse First Boston, Fiduciary Trust, Franklin Trust, J.P. Morgan Chase, Legg Mason Trust, Morgan Stanley and Northern Trust.

GivingCapital’s strategic partner, the $420 million-asset National Philanthropic Trust in Jenkintown, Pa., handles fiduciary tasks for most of the firm’s financial-services clients. Those tasks range from the approval of charities supported by the donor-advised funds to development and oversight of investment policies.

Blunt said GivingCapital is likely to pick a buyer or merger partner because it is too small to handle all its potential business, and has had to turn down business from financial institutions. The firm considered looking for venture-capital investors but found the slumping economy made terms of a possible deal “too Draconian,” Blunt said.

“Given the opportunities in front of us and who our clients are, we felt the best thing for us at this juncture was to get a big brother behind us,” he said, adding he expected to “pick a dance partner” soon.

GivingCapital, which last year sold its online-fundraising business to GetActive in Washington, D.C., after having signed up as many as 400 clients, has just launched a new Web-based product that lets donors create pooled-income funds, which are similar to charitable remainder trusts. The firm will offer the product to its financial-services clients to offer to their customers, who can use it to create trusts in which they put cash or appreciated assets such as stock, collecting dividends and interest during their lifetimes and leaving the principal to a charity at their death.

Industry notes

Kintera, a San Diego firm that provides online software and services to nonprofits, has acquired Involve, a Web architecture, design and development firm in New York City. Kintera last fall announced it had closed a round of nearly $8 million in financing that brought total financing to nearly $27 million.

Convio, a firm in Austin, Texas., that provides online systems for nonprofits to manage relationships with constituents, said it had closed $5.6 million in a third round of financing, bringing total financing to $22.1 million.

Microsoft is giving $15 million in software, plus technical assistance, to upgrade technology at 45 public historically black colleges and universities.

Todd Cohen is editor and publisher of Philanthropy Journal, an online newspaper at www.philanthropyjournal.org. His email is tcohen@ajf.org