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Venture philanthropy institutions are less averse to risks than typical foundations. This can give nonprofits more freedom to be open about their challenges and test whether or not their model is working. Having a venture philanthropist as a funder typically requires a heavy time investment including frequent calls, intensive support, and questioning. Be sure this is what they’re looking for. You should have criteria to determine which grants are right for you. How much time do you want to invest? Do you want a one time grant or a partnership? Venture philanthropy is not simply transactional funding.

Sometimes referred to as social entrepreneurialism, philanthropists may choose to provide start-up capital and loans to organizations that provide a social service and kick back revenue to pay for the investment. They usually have a mission focus. They then often use the investment payback to fund more projects in the community and are often non-profits themselves.

Tipping Point is one example of this type of investment. Since 2005, Tipping Point has raised more than $150 million to educate, employ, house and support those in need in the Bay Area. Last year alone, we helped put 23,000 people on a path out of poverty.

Source: Lessons from Funders