Collaboration in Venture Philanthropy: New Profit’s Story

June 21, 2015

New Profit is a national nonprofit venture philanthropy fund that aims to break down the barriers standing between people and opportunity in America. Our work is about transforming the big systems that shape how America educates its children, propels people toward social and financial stability, and creates healthy communities.

Our model is built on the belief that no organization or sector can create transformative social change on its own, but visionary social entrepreneurs, philanthropists and cross-sector partners can lead (and are leading) the way to a dramatically different and brighter future in our nation. Across all of our hand-in-hand work with these partners‚Äîfrom investing in visionary leaders to help them scale great social innovations through the New Profit Innovation Fund and our Focus Funds; to advocating for high-impact public policy through America Forward; to building communities of learning around new approaches to problem solving through the Gathering of Leaders‚Äîcollaboration is essential.

Our landmark collaboration with Deloitte is a case in point. The relationship is rooted in New Profit’s founding in 1998 and the question our founder, Vanessa Kirsch, was trying to answer in creating a new kind of organization: “Why don’t social innovations scale like consumer products and technology do?” It was a question she couldn’t shake after a trip around the world interviewing social entrepreneurs, during which she saw the ubiquity of big brands on the one hand, and scarce distribution of interventions and life-saving cures on the other.

The earliest version of New Profit aimed to fill that gap by providing growth capital and Fortune 500-caliber strategic support to social entrepreneurs who were on the cusp of breaking out with bold and transformative ideas. This was the beginning of a sea change that positioned innovation, disruption, entrepreneurship and stronger accountability for impact at the center of philanthropy. Some of New Profit’s earliest grantees, organizations like Teach For America, KIPP, and the Freelancer’s Union, were at the vanguard of these trends.

The strategic support piece of New Profit’s earliest value offering demanded collaboration, which is why we partnered with the strategy consulting firm Monitor Group, and its social-purpose arm, The Monitor Institute, both of which were acquired by Deloitte in 2012. We co-created the approaches that brought the best of strategy consulting to a social sector context, its different assets, challenges, and organizational capabilities. That foundational relationship has only grown stronger over time. Here’s an articulation of the relationship from Deloitte’s 2014 announcement about our renewed commitment to collaboration:

“This multi-million dollar collaboration provides pro bono strategic support from Deloitte’s consultants, who work with New Profit staff to support leadership teams at the [more than 30] high-impact nonprofits currently in New Profit’s portfolio. These teams help nonprofits pursue impact at scale by focusing on leadership and board development, monitoring and evaluation, financial sustainability, impact modeling, and growth strategy.

The announcement also provides a window into how the collaboration delivers value to innovative organizations:

For Year Up, which provides job training for disconnected youth while helping businesses fill their staffing needs with qualified talent, New Profit and Deloitte provided support on the launch of an aggressive effort to serve significantly more students over the next 10 years. The team developed a strategic plan, operating and financial model, and an expansion implementation roadmap. That effort is now projected to help Year Up support an additional 2,000 students annually in five years, with the capacity to serve thousands more. All of this will be accomplished while reducing the cost per student by almost half.

‚ÄòNew Profit and Deloitte have been invaluable as we continue scaling to reach more young adults in need of an opportunity,” said Gerald Chertavian, Year Up founder and CEO. “With their support, We’re helping more and more companies across the U.S. recognize the value of this talent to their organizations.’

Recently, we’ve spent a lot of time thinking about what it takes to make such cross-sector collaboration work over the long term. My colleague Shruti Sehra, who leads New Profit’s Reimagine Learning Fund (explained in more detail below), recently co-authored a piece with Deloitte’s Dana O’Donovan in the Stanford Social Innovation Review called “Relationship Advice for Cross-Sector Collaborators.” The piece featured three key insights:

Design … and redesign. don’t set the parameters of a collaboration or its offerings in stone at the outset. Doing so may seem attractive, because it creates a sense of confidence about what’s on the table and what’s not. But in reality, it might be creating false security. There needs to be room to evolve the partnership over time as the organizations learn and grow together.
Strive to engage the entire organization. When the two of us were mid-level managers ourselves, it was OK for us to keep the nuts-and-bolts processes and norms of the collaboration mostly in our heads. Predictably, when we took on new roles, we were forced to download our implicit “operating instructions” into a formal playbook so that it would be easier for new mid-level managers to work as productively as possible out of the gates. That playbook, as it turned out, has been a real asset in attracting an entire cadre of managers to participate in the collaboration.
Face tough issues head on. Sometimes issues arise in a cross-sector collaboration that are difficult to discuss. It often seems like the best course of action is to push those issues to the side in the interest of getting the work of the day accomplished. People dance around an area of conflict, finessing details and papering over problems so that work can continue “uninterrupted.” But just as with any longstanding relationship, we’ve learned that while addressing issues in the moment can be challenging, it is critical for the long-term success of the collaboration.”

We’ve written some other pieces on this topic in the Chronicle of Philanthropy, Huffington Post and Forbes.

It is hard to overstate the value of our relationship with Deloitte (and previously with the Monitor Group). We pioneered a new model for collaboration in the social sector that has helped dozens of organizations increase their impact, as noted in the Year Up example above. Through the thick and thin of our work together, we developed a level of trust that has created space for us to constantly think about the next frontier and beyond, seen nowhere more clearly than in our work together on New Profit’s Focus Funds.

In addition to our core investment vehicle, the New Profit Innovation Fund, we operate Focus Funds that allow for ambitious experimentation and risk-taking with emerging solutions to social challenges. Weaving together the separate capabilities we built over 15 years, we unite like-minded social entrepreneurs, philanthropists and institutional donors, researchers, policy experts and other cross-sector partners for intensive collaboration aimed at catalyzing new approaches and breaking through on intractable challenges. With New Profit as the driver and facilitator, Focus Funds integrate four core activities:

Co-creating and collaborating on vision and strategy, operating plans and measurement;
Investing in visionary leaders who have created bold solutions with systemic change potential;
Advocating for public policy that sets the agenda, redirects resources and leads to better outcomes; and,
Capturing public attention and mobilizing support for major change.

These intimate, dynamic problem-solving networks allow us to bring new ideas, energy, and financial and intellectual capital into existing or emerging areas where social change has not come as fast or effectively as we had hoped. They also allow us to pull the levers that we believe are most necessary for transformative change to occur‚Äîinvesting in great social innovations, advocating for high-impact public policy and driving cross-sector engagement and public dialogue‚Äîin a more integrated and powerful way. We’re learning that the Focus Fund model allows for all manner of unexpected breakthroughs to occur.

New Profit’s Reimagine Learning Fund is working to transform the future of learning in America so all students can achieve both academic and life success through implementing differentiated learning approaches, putting intentionality on social and emotional learning, and supporting learner agency in learning environments across the country. The fund was created to seize a moment of real opportunity for change: a convergence of research findings across a wide range of fields‚Äîincluding neuroscience, learning science, developmental psychology, psychiatry and information processing‚Äîshow learning experiences and environments can be tailored to specific types of students and yield life-long positive outcomes.

With support and strategy co-creation from lead funder the Peter and Elizabeth C. Tower Foundation and other signature funders, the Poses Family Foundation and the Oak Foundation, the Reimagine Learning Fund has, over the last two years, convened leading practitioners, policy advocates, researchers and others in these fields and begun to change practice, policy and public awareness.

The Reimagine Learning network now includes more than 100 individuals and organizations, which have coalesced around guiding principles that the fund team is now translating into action and executing. The fund has made investments in ANet, Eye to Eye, New Classrooms Innovation Partners, New Teacher Center, Peace First, and Turnaround for Children to co-develop and seed new approaches to learning in existing networks. An incubation fund has also been created to provide grants to organizations that are pushing toward the future of learning: City Year’s Compass Academy; University of Kansas Center for Research on Learning; Convergence Center for Policy Resolution; MIT Media Lab; and the Yale Center for Emotional Intelligence. A regional impact strategy, focused on facilitating collaboration between organizations in the fund, is also in the works.

On the policy side, a group of organizations in the network worked together to successfully elevate a new set of approaches and ideas into the Every Child Achieves Act, which would reauthorize the Elementary and Secondary Education Act (ESEA). The bill was passed by the U.S. Senate Committee on Health, Education, Labor, and Pensions with bipartisan support and will be considered by the full Senate soon.

The Reimagine Learning Fund has also done significant work to increase public awareness and mobilize new support. In February, the Fund held a public launch event in partnership with the leading talent and literary agency WME|IMG, Grammy award-winner and education advocate John Legend, the fashion line Public School, Understood.org, and other partners. The event generated hundreds of millions of media impressions and potentially valuable new donor engagement opportunities. It also helped position the Fund at the center of public debate about the future of education.

The dynamic, collaborative environment in the Reimagine Learning Fund network, coupled with integrated execution of practice, policy and public awareness strategies, make us optimistic that transformative change is on the horizon. This spirit and model are driving work in our other Focus Funds on early learning, K-12 school system innovation and reform, college to career pathways and career advancement for low-income youth, and criminal justice system reform.

Our collaboration with Deloitte and the evolving Focus Fund model have helped us drive extraordinary outcomes for people in need, and the partnership of so many great people and organizations keeps us pushing ourselves to find ever more effective approaches to driving social change. We maintain a healthy impatience that keeps us on the lookout for the next collaboration that could help us dramatically increase the impact of our work. Over the next year, we’ll be rolling out some new partnerships and programs and we’ll be excited to share them with this community.