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High-engagement giving
Another set of experiments that began in the late 1990s sought to replace the arm’s-length relationship that traditional funders maintained with the organizations they supported with a much closer and more active relationship. This so-called high-engagement philanthropy, born of efforts to incorporate successful practices from the venture capital industry into philanthropy, brings the donor and the grantee into a partnership in which the donor’s money is allied with other assistance, and where the achievement of measurable goals is carefully tracked.

According to High-Engagement Philanthropy: A Bridge to a More Effective Social Sector, a 2004 report produced by Venture Philanthropy Partners and Community Wealth Ventures, high-engagement philanthropy can be defined as “an approach in which funders or “investors" are directly and personally engaged and involved with their investment partners (in traditional terms, the grantees) beyond providing financial support. Often this engagement takes the form of strategic assistance, which can include long-term planning, board and executive recruitment, coaching, help in raising capital, assuming board roles, accessing networks, and leveraging relationships to identify additional resources and facilitate partnerships. There are a variety of approaches within high-engagement philanthropy and, as with anything new and different, there remain open questions about its effectiveness and value."

Organizations are using the high-engagement approach to build nonprofit capacity, provide management and other technical assistance, and monitor outcomes and progress to ensure that grantees meet specific performance targets. And many mainstream funders have begun to adopt and adapt some of the more effective techniques used by high-engagement funders as part of their regular grantmaking practices.

Social Venture Partners was started in Seattle in 1997 to help area professionals invest their time, skills, and money in local nonprofits focused on children, education, and the environment. Partners each commit to a minimum contribution of $5,500 and then work together to make investment decisions and organize volunteer capacity-building efforts to help recipient organizations. This model for engaged philanthropy has also spread far beyond Seattle, and there are now more than 20 different SVP communities across the world.

In the early 2000s, the Edna McConnell Clark Foundation narrowed its focus from five funding areas to one: youth development. The foundation also shifted its approach from supporting a range of new experiments to concentrate on developing close, long-term relationship with grantees that have demonstrated effectiveness and a commitment to growth. The foundation works extensively with grantees during the grant-selection process and then continues helping recipients to build capacity and measure outcomes.

New Profit Inc. is a nonprofit venture philanthropy firm committed to effecting social change by applying venture capital practices to help proven nonprofit organizations grow. NPI partners with grantees, supporting their growth with performance-based funding and management development assistance and using benchmarks and performance measurement to hold them accountable for generating social change.

Venture Philanthropy Partners works to improve the lives of children in low-income communities in Washington, D.C. in two ways: by strengthening nonprofit organizations through offers of funding, management expertise, and other non-financial resources; and by inspiring philanthropists and other leaders to increase the flow of capital and other resources to nonprofit organizations meeting the core needs of children.

Other important resources related to high-engagement philanthropy, and the venture philanthropy model with which it is often linked, include:

Virtuous Capital: What Foundations Can Learn from Venture Capital," by Christine Letts, William Ryan, and Allen Grossman in Harvard Business Review. This 1997 article helped to spread the idea of “venture philanthropy" throughout the field. The authors noted parallels between venture capital firms and foundations, and concluded that venture capital practices might be illuminating and applicable for the practice of philanthropy.

In “If Pigs Had Wings" (Foundation News and Commentary, 1997), Bruce Sievers, former Walter and Elise Haas Fund executive director, argued that the venture philanthropy analogy was not particularly helpful because important differences in how the venture capital and philanthropy worlds are structured mean that lessons are not easily transferable.

A series of reports published between 2000 and 2002 by Venture Philanthropy Partners and Community Wealth Ventures captured the state and evolution of high-engagement and venture philanthropy in each of those three years: Venture Philanthropy 2000: Landscape and Expectations; Venture Philanthropy 2001: The Changing Landscape; and Venture Philanthropy 2002: Advancing Nonprofit Performance Through High-Engagement Grantmaking.

In a 2002 Chronicle of Philanthropy article, “Will ‘Venture Philanthropy’ Leave a Lasting Mark on Charitable Giving?" Mark Kramer discussed how venture philanthropy had not fulfilled some initial hopes of its early practitioners. But he also noted that, “Interestingly, the three main elements of venture philanthropy—building operating capacity, close engagement between donors and recipients, and clear performance expectations—are not new at all. Many would argue that those have been among the trademarks of effective philanthropists for decades, and that they were well on the rise long before venture philanthropy gained public attention."

Two recent studies, “High Engagement Philanthropy: What Grantees Say About Power, Performance, and Money" by Christine Letts and William Ryan in Stanford Social Innovation Review, and Transforming Philanthropic Transactions: An Evaluation of the First Five Years at Social Venture Partners Seattle, by Kendall Guthrie, Alan Preston, and Lucy Bernholz of Blueprint R&D, examine high-engagement models. The authors suggest that high-engagement approaches, which require significant time and effort and careful execution, can effectively promote philanthropy and volunteerism among donors, and are perceived by many grantees to be both effective and satisfying grantmaking mechanisms.


 
 Introduction 
 Tour At A Glance 
 Where Are The Patterns In The Innovation? 
 Experimenting With Grantmaking Strategies 
 
Supporting Organizations, Not Just Programs
Becoming More Focused And Persistent
High-engagement Giving
Funder As Initiator And Operator
 Rethinking Available Resources 
 Redefining The Spheres Of Activity 
 Creating A Culture Of Learning 
 Aggregating Actors 
 Questioning The Foundation Form 


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