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Venture funds fall short – Policy and advocacy missing

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Venture philanthropists are falling short in networking, risk-taking and community focus.

That’s the opinion of Neil F. Carlson, director of the project on social ventures and new wealth for theNational Committee for Responsive Philanthropy in Washington, D.C., writing in the San Jose Mercury News on June 25.

Social venture funds have been extremely successful at bringing in donors, especially in Silicon Valley. All too often, however, those funds fail to address fundamental questions of social and economic justice, Carlson says.

First, venture philanthropists often fail to network beyond the traditional groups of corporate leaders, foundation officers and government officials that are mainstays of nonprofit boards.

If venture groups made an effort to talk to activists, poor people and people of color, Carlson suggests, they would better understand the problems they are trying to solve. There are thousands of nonprofit groups already working in marginal communities that are outside the networks of power and influence – social venture funds should take a closer look.

Second, venture philanthropists talk about innovation but take few political risks, Carlson says. Silicon Valley groups invest their charity dollars in community economic development, services and education – all focuses of traditional philanthropy as well.

What’s missing is policy and advocacy. Why not complement community development initiatives with advocacy for the living wage and affordable housing, Carlson asks. More explicitly political commitments could lead to more real structural change, he argues.

Finally, Carlson says, venture philanthropists are dangerously close to putting donor interest above community service.

The problem begins with social venture funds’ tendency to liken donors to “shareholders” or “partners” who deserve a return on their “investments,” he says. The funds promise donors rewarding experiences and community connections.

Volunteers and community connections are not necessarily central to nonprofits’ missions or critical to disadvantaged communities, however. The needs of those communities, and the nonprofits that serve them, should determine funding priorities.

Venture philanthropy has good values, Carlson says: innovation, partnership, collaboration and a commitment to building strong institutions. The movement will only live up to its ideals, however, if the new philanthropists learn to listen to the communities they serve.

For full text, go to the San Jose Mercury News.

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