Venture philanthropy may be an unfamiliar concept to many, but that will change as the GreenLight Fund brings its model to Cincinnati and starts working to solve problems around poverty.
The GreenLight Fund formed in Boston over a decade ago to apply venture capital principals to the nonprofit sector. The idea: Find organizations that are generating impact and results for chronic issues and expand its work into new markets through investment and advising. The model has proven so successful that the organization has expanded into five other cities, including Cincinnati.
“Overall, our focus is on addressing the challenges of children, youth and families in high poverty neighborhoods,” says Tara Noland, GreenLight Cincinnati's executive director. “But the needs and resources vary by city, so we conduct a thorough assessment annually before selecting a focus. We are not interested in forcing a model on a community.” Tara Noland, executive director of GreenLight Cincinnati
GreenLight Cincinnati and its advisory board of investors and experts review the local nonprofit landscape for the gaps in services related to poverty. Using the resources of its national network, GreenLight Cincinnati finds nonprofits already operating in multiple cities that offer a possible solution and are willing to expand to Cincinnati. Meanwhile, it raises an investment fund and identifies potential local partners to help bring that solution to the city.
“Our investments are structured to be paid out over four years, which gives the organization time to become part of the local nonprofit community, demonstrate results and find support that allows them to stay here long-term,” Noland says.
Although the terminology is different than that of traditional philanthropy, the investment GreenLight Fund makes in its portfolio of nonprofit organizations is in fact a grant. GreenLight Cincinnati itself is a nonprofit and raises its seed funding from a combination of grants and tax-deductible donations.
Duke Energy, a partner of GreenLight Charlotte, recently announced a multi-year funding commitment to GreenLight Cincinnati, joining other investors including P&G, the United Way of Greater Cincinnati, the Bank of America Charitable Foundation and the Manuel D. and Rhoda Mayerson Foundation.
“Last year, our focus was on returning citizens,” says Noland. “There are a lot of organizations working on pieces of the issue, but the need is so great and complex, we felt that was an area where we could help.”
GreenLight Cincinnati’s first investment will bring the Center for Employment Opportunities to Cincinnati. They provide transitional work and supportive services for recently incarcerated individuals, preparing them for a program like Cincinnati Works, one of its local partners.
“What is so great about the venture philanthropy model is that it identifies a need in the community and then finds a solution that is not duplicative and fills that niche,” says Noland. “Our community partners are often the most excited about our investment because they see what it can do for their clients.”
GreenLight Cincinnati will announce its second investment later this summer.