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Group forms to raise money, donate expertise to assist nonprofits
Monday, April 30, 2001 By Eve Modzelewski, Post-Gazette Staff Writer
Venture capitalism, the fuel of the New Economy, has taken on a new face. No longer is it just about hoping for profits and a big payout from an initial public offering. Now, a wave of do-good investors are using venture capitalism as a method of philanthropy.
And they're not just investing their dollars. They're investing also their time and their expertise.
Pittsburgh Social Venture Partners got its start in November 2000 on the heels of a national trend launched three years ago in Seattle. Since then, it's had a steady pool of supporters from high-tech communities across the country, with Pittsburgh becoming the eighth of 12 cities that have adopted social venture programs to date.
The idea is to have an organization driven by individuals, or partners, who collaborate to help make nonprofits more self-sufficient. Typically, there's only about one permanent staff member for every 50 partners, which means the partners are responsible for the execution of the grants, both in terms of money and service.
"The more traditional model of grant-making has been a hands-off relationship with the nonprofit," said John Denny, a founding partner who spearheaded the launch of a Pittsburgh chapter of Social Venture Partners and is director of community projects for Elsie Hillman's office. "But this way is much more involved with the use of human capital as well."
The new venture will target nonprofits serving at-risk populations, especially youths, in Allegheny County. Over the summer, it plans to begin to advertise and accept grant proposals, Denny said. Its goal is to make its first round of grants in the fall.
So far, 47 partners have signed on, he said, including New Economy entrepreneurs, accountants, lobbyists, marketing specialists and public relations workers.
"It is a diverse partnership in terms of human capital," Denny said, which means the group should be able to provide a range of specialized skills to the nonprofits it ultimately assists. "It's really a twofold mission: To practice engaged grant-making and to serve as a catalyst to promote more volunteerism and philanthropy in the community."
Denny, who was previously a program officer for the Hillman Foundation, said nonprofits are often unaware of how the public sector functions, which slows them down when it comes to getting funding. Pittsburgh Social Venture Partners believes it will be able to help remedy that drawback.
Sanjay Chopra, former CEO of OnlineChoice.com, a North Side vendor of electricity, telephone and other services, said he thought Social Venture Partners was a good way for New Economy workers to learn about philanthropy.
"People like me, we have zero clue about philanthropy," he said. "I liked the concept of bringing a network of partners and applying venture capitalism principles."
Chopra was recruited as the first chairman of the Pittsburgh venture, which in March set up its governance structure and formed committees. It is now searching for a chief executive.
"I really see this as relaxation," Chopra said, "to be able to take your focus off your own company and give back to society."
Partners make a two-year commitment to the local venture, and are required to donate time and money -- $3,000 this year -- toward the nonprofits receiving grants. Spouses may join as one partner unit, which together would still pay $3,000.
Partner education is strongly emphasized, since most partners aren't familiar with the inner workings of nonprofits.
One such seminar is scheduled for 6 p.m. to 8 p.m. today at the Bidwell Training Center in Manchester. The meeting is open to the public, but people who are interested should first call Grantmakers of Western Pennsylvania at 412-471-6488.
"Just like venture capitalists partner with for-profits, we're partnering with nonprofits to ensure their long-term success," Chopra said. "Nonprofits typically take longer to achieve success and sustainability. It's like cathedral-building: one generation starts, and at the end of three or four hundred years, you see the results are beautiful."
For more information on Pittsburgh Social Venture Partners, see its Web site at http://www.psvp.org/ or call Grantmakers of Western Pennsylvania.
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