At GreenLight philanthropy, sowing seeds
Monday, August 10, 2015
Posted by: Amy Seasholtz
Erin E. Arvedlund, Inquirer Staff Writer
Posted: Monday, August 10, 2015
What if a philanthropy were run like a venture capital-funded start-up? Welcome to the GreenLight Fund.
With seed money of about $12 million, GreenLight gives money to local organizations here, in Boston, and the San Francisco Bay Area. Local grantees then raise additional rounds of money - $32 million for social-impact work so far.
How does GreenLight Fund work here? Venture capitalist John Simon and Margaret Hall cofounded GreenLight as "a way to do philanthropy using the approach a VC firm would take," Philadelphia executive director Matthew Joyce said.
GreenLight's vetting process is similar: interviews with management teams, board members, and clients, plus a review of financial information and local landscape analysis.
Three organizations here were "greenlighted": Single Stop USA, Year Up, and the Center for Employment Opportunities.
Single Stop partnered with Community College of Philadelphia to screen every college student for benefits outside of financial aid, such as food stamps or tax credits for child care.
"The hope is to draw down resources students don't know they're eligible for and build marginal income, so they graduate," Joyce said. Typically, Single Stop helps students double their $5,000 in annual student aid income.
Year Up students spend six months at Peirce College in credit-bearing programs and another six months at an employer.
And in 2015, GreenLight gave seed money to the Center for Employment Opportunities (CEO), which helps reduce recidivism among men and women coming out of prison.
"Folks released from jail transition into work right away. We partner with the city and the parks department," Joyce said. "Within a short time, CEO connects them with private-sector positions. Most of our money is spent in partnership with a public entity or other funders."
GreenLight typically seeds $600,000 annually for a few years, "as early-stage funding giving them runway to build relationships in Philly," Joyce said.
What about return on investment? The metric shouldn't just be numbers of people served, but cost per impact, said Katherina Rosqueta, founding executive director at the University of Pennsylvania's Center for High Impact Philanthropy.
"For CEO, their big outcome is reducing recidivism. But there's also the cost savings to state governments of people not going back to prison. We help them do the math on the positive impact if CEO is successful," Rosqueta said.
Saj Cherian, vice president at the VC firm Kynetic in Conshohocken, said of GreenLight: "They can't just write a check and leave. We help [local grantees] along, because they have our money. Our goal is to identify worthy organizations, hire the social entrepreneur as executive, and bet on the jockey and the horse." Kynetic is the company formed by Michael Rubin, who sold GSI Commerce to eBay in 2011, and owns Fanatics, Rue La La, and ShopRunner.
GreenLight seeds newer, innovative nonprofits with the expertise of businesspeople, said Jeff Berstein, president of ImageFIRST Healthcare Laundry Specialists in Radnor.
"Philly is challenging," said Berstein, also a GreenLight board member. "Other nonprofits are in the same space and may look at the new entrant as a threat. There's a limited funding base."