Letter to a Young Venture Philanthropist

By Mark Charendoff

Published June 20, 2003, issue of June 20, 2003.
  • Print
  • Share Share

Judging from the explosion in popularity of “venture philanthropy” initiatives in local communities, one would be excused for thinking we are in the midst of a renaissance of sorts.

In federation after federation, these new groups are beginning with great fanfare and proceeding, or ending, with decidedly mixed results. One thing is certain, though: They are not all “venture” philanthropy. Just calling it a duck won’t make it quack.

The term “venture philanthropy” gained some initial currency after a 1997 Harvard Business Review article argued that there was much that a philanthropic foundation could learn from venture capitalists. The article was widely discussed at the time, and not all of the comments were glowing.

A great deal of opposition to the notion of venture philanthropy emerged in the foundation world, as well as the not-for-profit community. Many of the principles articulated in the article were abused by the former and criticized by the latter. Still, there is much wisdom to be found in the idea.

So, what should a good venture philanthropist do? One of the greatest market advantages that an independent funder has — whether they have a foundation or not — is the ability to fail. When you are prepared to fail, while fervently hoping to succeed, it means that you are prepared to risk. And when you are prepared to risk you are going to end up funding interesting things.

Some of the most innovative projects in today’s Jewish communities came about because an independent funder or group of funders took a risk on a long shot. A calculated risk, perhaps, but they invested money in a passionate individual with a dream and they were prepared to walk away from that money if it did not work out.

Like the good venture capitalist, they keep a varied portfolio of investments — some blue chips with a certain, though modest, return; some moderately risky but pretty safe bets, and some long shots. Knowing that long shots rarely pay off does not discourage them. They might only need one big win to have a great year. If that means they are going to end up investing in some losers, well, that is the cost of doing business. That is what risk is.

Our venture philanthropist thinks the same way. She wants that one long shot that is going to pay off, that one great idea that is going to change the Jewish world. She is probably going to end up backing some losers in order to find that winner. That is the cost of doing venture philanthropy.

I attended a meeting of foundation professionals several years ago and the topic of discussion was “grants that failed.” As we went around the room describing our setbacks, one young pro, new to the field, delighted in asserting that he had a perfect track record — no failures. The moderator cautioned him not to be too proud of that record. In a foundation the size of the one at which he was working, no failures probably meant too low of a tolerance for risk. A good philanthropist ought to tolerate failure, at worst, and celebrate and learn from it, at best.

The are other characteristics of the venture philanthropist as well — a willingness to bring more than a checkbook to the table, for one; an insistence on measurables, for another. Venture philanthropy has its applications and misapplications. It is an approach that naturally favors certain not-for-profits and has limited application to others.

But one thing is certain: It is not just about getting a group of young people together to make small or mid-sized grants to a range of local institutions. It does not become venture philanthropy simply by calling it venture philanthropy.

If we want to change the world, or our little piece of it, we are going to have to take some chances. Aspiring venture philanthropists who are assessing their appetite for risk would do well to consider the New York Lottery’s sage advice to skeptical ticket-buyers: “Hey, you never know.”

Mark Charendoff is president of the Jewish Funders Network.






Find us on Facebook!
  • More than 50 former Israeli soldiers have refused to serve in the current ground operation in #Gaza.
  • "My wife and I are both half-Jewish. Both of us very much felt and feel American first and Jewish second. We are currently debating whether we should send our daughter to a Jewish pre-K and kindergarten program or to a public one. Pros? Give her a Jewish community and identity that she could build on throughout her life. Cons? Costs a lot of money; She will enter school with the idea that being Jewish makes her different somehow instead of something that you do after or in addition to regular school. Maybe a Shabbat sing-along would be enough?"
  • Undeterred by the conflict, 24 Jews participated in the first ever Jewish National Fund— JDate singles trip to Israel. Translation: Jews age 30 to 45 travelled to Israel to get it on in the sun, with a side of hummus.
  • "It pains and shocks me to say this, but here goes: My father was right all along. He always told me, as I spouted liberal talking points at the Shabbos table and challenged his hawkish views on Israel and the Palestinians to his unending chagrin, that I would one day change my tune." Have you had a similar experience?
  • "'What’s this, mommy?' she asked, while pulling at the purple sleeve to unwrap this mysterious little gift mom keeps hidden in the inside pocket of her bag. Oh boy, how do I answer?"
  • "I fear that we are witnessing the end of politics in the Israeli-Palestinian conflict. I see no possibility for resolution right now. I look into the future and see only a void." What do you think?
  • Not a gazillionaire? Take the "poor door."
  • "We will do what we must to protect our people. We have that right. We are not less deserving of life and quiet than anyone else. No more apologies."
  • "Woody Allen should have quit while he was ahead." Ezra Glinter's review of "Magic in the Moonlight": http://jd.fo/f4Q1Q
  • Jon Stewart responds to his critics: “Look, obviously there are many strong opinions on this. But just merely mentioning Israel or questioning in any way the effectiveness or humanity of Israel’s policies is not the same thing as being pro-Hamas.”
  • "My bat mitzvah party took place in our living room. There were only a few Jewish kids there, and only one from my Sunday school class. She sat in the corner, wearing the right clothes, asking her mom when they could go." The latest in our Promised Lands series — what state should we visit next?
  • Former Israeli National Security Advisor Yaakov Amidror: “A cease-fire will mean that anytime Hamas wants to fight it can. Occupation of Gaza will bring longer-term quiet, but the price will be very high.” What do you think?
  • Should couples sign a pre-pregnancy contract, outlining how caring for the infant will be equally divided between the two parties involved? Just think of it as a ketubah for expectant parents:
  • Many #Israelis can't make it to bomb shelters in time. One of them is Amos Oz.
  • According to Israeli professor Mordechai Kedar, “the only thing that can deter terrorists, like those who kidnapped the children and killed them, is the knowledge that their sister or their mother will be raped."
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.