As a non-profit leader, you’ve dedicated your life to pursuing a mission aimed at improving local communities and the lives of others. However, your ability to make a difference is always contingent on funding and resources. These days, cash from grants, donations, and fundraisers is usually not enough to effectively scale an organization and truly drive change. It’s also rarely enough to offer the competitive compensation necessary to attract highly effective leaders and strong talent, who can often find much higher salaries in the for-profit sector. All of this is to say, driving business growth as a non-profit has never been more challenging.
However, there is another option. As more and more for-profit organizations realize the importance of making a social impact, venture philanthropy is becoming an increasingly popular way for non-profits to obtain funding and resources needed to truly make a difference. Below, we’ll tell you what venture philanthropy is and how your organization can leverage it to drive business growth.
What Is Venture Philanthropy?
Venture philanthropy is a phrase that describes a VC’s (or a corporation’s) financial, time, and resource investment in a non-profit organization. The investment is usually made with the goal to promote social good that is aligned with an organization’s mission. When VCs or companies invest in venture philanthropy, the objective is usually not to generate a monetary return. However, VCs can often use the investment as a tax deduction so there is a financial incentive.
How Can Venture Philanthropy Grow My Non-Profit?
Capital is the most significant and obvious benefit of venture philanthropy; however, your operations can benefit from the expertise of a qualified VC firm as well. As part of the deal, a VC or Corporate Responsibility Officer may take a board seat, provide consulting, or help with developing new policies and/or procedures. Here are a few specific examples of how non-profits are leveraging venture philanthropy to drive business growth:
1. It Creates A Consistent Cash Flow
Consistent, predictable cash flow is a necessity to build and execute strategies that drive business growth. Achieving predictable cash flow can be a challenge in the non-profit sector. Donations are difficult to forecast and the majority of them come at the end of the year. However, when partnering with a VC firm, you can receive cash all year long, so you’ll be better equipped to gradually scale, plan for the future, and execute on your strategic priorities.
2. It Provides Access To Resources
VCs and large companies not only have funding, but can also bring a massive network of resources to the table. For example, if your organization needs a specialized type of talent, such as a software engineer, performance marketer, or project manager – your VC partner is likely to have a network of candidates and agencies that can help. Your VC partners also bring in experienced business consultants who can help you build your strategic plan. By working with a VC firm, your quantity of business relationships has the opportunity to grow exponentially making it easier to find the talent you need to drive business growth.
3. It Provides Stronger Leadership
Venture philanthropy can bolster the strength of your leadership team in two ways. First, an experienced VC partner may take a board seat or an executive position, which will give you the opportunity to leverage their experience to help build a successful culture and a strong strategic plan. Second, with predictable funding, you’ll likely have more opportunities to invest in leadership development programs and strategic planning sessions that can help you gain the skills to build a strong team and map out the most effective path toward success.
With today’s competitive job market and tumultuous economy, growing a non-profit has never been more challenging. Luckily, there are numerous VCs and for-profit corporations that want to do their part and contribute to the social good. By forming a strategic partnership with a reputable firm, you can give your non-profit the leverage it needs to truly make a difference in this world.
If you are a non-profit leader who is struggling to drive growth or find sustainable funding, an experienced business consultant can help. Contact us at Lilly Consulting today. We can not only help you map out your strategic plan, we also help you coordinate the right VC partnership.
