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Venture Philanthropy In Alberta

Alberta charities weary of chasing donors and dollars are seeing “venture philanthropy” as the key to self-sufficiency. Is it really the gift that will keep on giving?

Jan 1, 2010

by Jennifer Cockrall-King

Perpetual motion might seem a natural state for Carol Kelly, but as executive director of the Medicine River Wildlife Centre (MRWC), it’s a necessity. On a summer day, the phones start ringing as early as 7 a.m., with Kelly handling as many as 50 calls on the busiest days (overall, upwards of 8,000 a year) regarding everything from the rescue of oil-slickened birds to someone frantic from hitting an animal on the highway. “It quiets down about nine or 10 at night,” says the bubbly 57-year-old. “But then I’ll get a call in the middle of the night about an injured fox and I’ll have to leap out of bed.”

In 1984, after some vet clinic experience, Kelly thought she’d simply nurse a few animals in her backyard. Now, MRWC is a 300-acre animal rescue shelter and sanctuary 41 kilometres west of Innisfail. Last year, it treated 1,007 wild “patients” from across Alberta. It put on 200 educational programs for groups ranging from pre-schoolers to seniors to inmates at correctional institutions. As with most non-profits, demand outstrips capacity of three full-time employees, Kelly included, plus volunteers. “We really could use another four full-time paid staff,” she sighs.

MRWC receives no government funding to meet its $400,000 annual operating budget. Instead, it engages in the usual fundraising activities: selling merchandise, memberships, running casinos and writing grants (Kelly applied for 17 last winter alone). “You always have your hand out looking for money,” says Kelly.

Like other non-profit operators, Kelly realizes the approach is unsustainable. She’s now on a mission to find not just a donor but an investor to help run the centre more like a revenue-generating business. MRWC has already added ecotourism components and there are plans for a children’s book featuring the centre’s great horned owl, Otis, a permanent resident. But in the non-profit realm, business skills and corporate connections aren’t a given. “When I heard about venture philanthropy, I thought, ‘Wow, that’s the answer.’ These are people who already have successful businesses, so for them, it’s just natural.”

With the Alberta economy still in recovery mode, and charity dollars scarce even for well-established non-profits, venture philanthropy is gaining a foothold in corporate social responsibility programs. Groups like MRWC are soliciting business investors to be mentors and partners to provide them a competitive edge and even a self-sustaining business model that could make them less reliant on donors. In theory, it’s a win-win situation.

It sounds like a logical solution to the charity cash crunch, but as a relatively new concept, the definition of venture philanthropy is still a moving target. Some forms are even bound to raise questions, particularly when enterprises emerge, as some have, with promises of financial returns for not just the charities they support but for the investor-donor, the newest kind of giver on Alberta’s philanthropic scene.

Venture philanthropy emerged out of the mid-1990s tech boom, when a handful of brash, young Silicon Valley innovators became overnight millionaires and even billionaires. Some, like Paul Brainerd, founder of Aldus Corp. (purchased in 1994 by Adobe Systems Inc. for US$450 million), envisioned putting their windfall toward affecting social change in a way that would completely remake the donor-charity paradigm. Brainerd started Social Venture Partners in 1997 with a mission to create a “philanthropic community that borrowed from venture capital practices.”

Today, it has evolved to encompass its own jargon and operating models, adopted from the for-profit business world. Donors are referred to as “investors”; charities and non-profits are “investees.” Investors give time and expertise as well as funds, and place an emphasis on building capacity within a non-profit. Often they take on directorship roles for a fixed term, usually three to five years, in which measurable results guide the investor-investee relationship. And most importantly, there is an exit strategy for the investor. Investees are expected to reach a level of self-sufficiency and business acumen by a “graduation date.”

This concept appealed to Brad Zumwalt, Alberta’s own dot-com success story, and his wife Tanya. In the days preceding the tech bust, before which Brad fortuitously sold his digital image distribution company EyeWire to Getty Images, the Zumwalts moved in the same circles as Brainerd and felt his next-gen philanthropic model would suit Calgary’s entrepreneurial business culture. They started Social Venture Partners (SVP) Calgary in 2000.

SVP Calgary is the most well-established example of venture philanthropy in the province. It’s a registered non-profit public foundation with a mandate to provide funds and business expertise to Calgary charities supporting youth and education.

It acts as both a fixed-term source of funding for its associated charities, and as a business incubator where non-profits access the business acumen and corporate network of its investors. Investors each contribute $5,000 annually, but when the money is pooled through SVP, partner charities receive between $20,000 and $50,000 a year. Its investors have supported programs such as Calgary Reads, Calgary Bridge Foundation for Youth and the Brown Bagging It for Calgary’s Kids Society.

“For me, it’s the reward of following your money,” explains Krystyna Williamson, half of a philanthropic couple who have been heavily involved SVP Calgary investors since 2002. “I give my $5,000. I pool it with other like-minded individuals who I get to know and enjoy being with. Then I get a seat at the strategic planning mission of that charity organization and help them recraft their mission statement to better express what they do.” Williamson also credits SVP for turning Andy Williamson, her “traditional” philanthropist husband – “the cheque-writing kind with no time” – into a much more engaged philanthropist.

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