Entrepreneurial Design for Extreme Affordability May 14, 2007 - - PowerPoint PPT Presentation

Entrepreneurial Design for Extreme Affordability

May 14, 2007

2

Goals

• Provide an overview on the “funding/giving”

landscape with a focus on foundations. (Do not address government funding.)

• Delve more deeply into the funding
• pportunities and landscape for funding for

Social Entrepreneurs.

3

Agenda

Funding Landscape

– Who gives and to what? – Foundations at a glance – Foundations inside the beast

Alternatives Social Entrepreneur Funding Landscape Company Form

– Nonprofit, for-profit, or hybrid

4

What I say today is going to change tomorrow

5

1997

6

Today

• Sergey Brin & Larry Page

“We hope that someday this institution will eclipse Google itself in overall world impact by ambitiously applying innovation and significant resources to the largest of the world's problems.”

7

Overview of Giving From

2005 Donor Sources

Bequests 7% Individuals 76% Foundations 12% Corporations 5%

2005 Donor Sources

$260.28 billion total $13.77 $30.00 $17.44 $199.07 $0.00 $50.00 $100.00 $150.00 $200.00 $250.00 Corporations Foundations Bequests Individuals Corporations Foundations Bequests Individuals

Source: Giving USA 2006, www.aafrc.org/gusa

8

Overview of Giving To

$93.18 $38.56 $22.54 $25.36 $14.03 $13.51 $8.86 $6.39 $21.70 $16.15 $0.00 $20.00 $40.00 $60.00 $80.00 $100.00

2005 Donor Recipients

Religion - 36% Education - 15% Health - 9% Human Serv ices - 10% Public-society benefit - 5% Arts, culture, and humanities - 5% Env ironment and animals - 3% International affairs - 3% Foundations - 8% Unallocated giv ing - 6%

Source: Giving USA 2006, www.aafrc.org/gusa

9

Charity Gap

“The vast majority of givers believe the bulk of their donations help those less fortunate than

• themselves. In fact, less than one-third of the

money individuals gave to nonprofits in 2005 went to help the economically disadvantaged, according to a new study commissioned by Google.org, the philanthropic arm of Google.”

Source: Sandberg, “The Charity Gap,” Wall Street Journal, 4 Apr 2007

10

Individuals Giving Characteristics

• Largest source of giving
• Largest recipient religious
• Limited funds to serve economically

disadvantaged

• Limited funds for international affairs

11

Foundation Type

Foundation Type, 2005

63,059 2,607 707 4,722 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% Corporate Operating Community Independent

Source: Foundation Growth & Giving Estimates, The Foundation Center, 2007

12

Foundation Size

Source: The Foundation Center, 2004

44488 12907 2892 2240 949 504 417 86 5000 10000 15000 20000 25000 30000 35000 40000 45000

<$1M $1M- $5M $5M- $10M $10M- $25M $25M- $50M $50M- $100M $100M- $500M >$500M

Foundation Assets

13

Foundation – Who Gives

2005 Top fifty foundations out of over 71,095 (.001%) gave $10.6 billion (29%)

Source: Foundation Growth & Giving Estimates, The Foundation Center, 2007

14

Hewlett

Accepting LOIs

• Education
• Environment
• Performing Arts

Not Accepting LOIs

• Global Development
• Philanthropy
• Population

Gates

• Global Development
• Global Health Program
• United States

(education)

• Charitable Sector

* Global Development No RFPs are currently

• pen

Open Society

Foundation Guideline Snapshot

• Children & Youth
• Economic Developmen
• Education
• Governance
• Health
• Human Rights
• Law & Justice
• Media, Arts, & Culture
• Women

15

Foundation Characteristics

• Small
• Fragmented
• Power/$ lies in few largest
• Closed
• Specific restrictions
• Slow

16

Foundations – what to do?

• Small - Find and tap less well-known
• Fragmented - Time sink, plan for it
• Power/$ lies in few largest - Unless you have

connections or an “in” is it worth your time?

• Closed - Network, network, network
• Specific restrictions - Be flexible, without losing core
• Slow - Think of alternatives in start-up phase

17

Snapshot of Wealth Growth

Source: Foundation Center, Forbes 2004

18

Evergreen Lodge

http://www.evergreenlodge.com/index.html

19

BearTooth Capital

http://www.beartoothcap.com/

20

Alternatives

• Leverage Networks
• Creative in start-up phase

* Partner * Off-shoot * Fiscal agent * Sponsor

• Think broad focus

21

Social Entrepreneur Funders

Echoing Green

• Start-up
• Individuals/partners
• 60K over 2 years

Draper Richards

• National/global start-up
• 100K for 3 years

Ashoka

• Ashoka fellows – leading social

entrepreneurs; average grant: living stipend for 3 years

• Senior Fellows – networkers,

advisors, advanced leaders

• Global Fellows – international work
• Social Investment Venture (SIV)

Fellows – allocate capital for social benefit

22

Social Entrepreneur Funders

Schwab Foundation for Social Entrepreneurs Facilitates – No $:

• Networking and alliances
• Training and conferences

Skoll

• Second-round, mezzanine funding

(at least 3 years operating history)

• Grants and/or loans (renewable)

Good Capital

• Capital investment, advisory services,

and networks

• For-profit social enterprises eligible
• At least 2 years operating history

23

Social Entrepreneur Funders

Omidyar Network

• For-profit: social impact integral to business model
• Nonprofit: usually invest in general operating fund

Areas of investment include:

• Microfinance
• Philanthropic markets
• Open source
• Participatory media
• Transparency in government

New Profit

• Venture philanthropy fund providing

multi-year financial & strategic support

• Partnership with the Monitor Group

24

Social Entrepreneur Continuum

START-UP MEZZANINE ESTABLISHED

• Echoing Green
• Draper Richards
• Ashoka (Fellows)
• Skoll
• Ashoka (Senior Fellows

Schwab Fellows Good Capital Omidyar Network Acumen Fund

25

Nonprofit For profit Hybrid

?

26

Additional Resources

• SOCIAL EDGE

http://www.socialedge.org/resources/edge-wiki/Funding

• Good Capital

http://www.goodcap.net

• Foundation Center

http://www.fdncenter.org

• Lex Mundi Pro Bono Foundation

http://www.lexmundiprobono.org

• Center for Social Innovation

http://www.gsb.stanford.edu/csi/ - http://www.ssireview.org/