Published in 2008 | Download [PDF] 1,019 KB

Roadmap #1: Strategic Co-Funding
This is the first article in REDF’s “Out of Philanthropy's Funding Maze” Series, which has developed out of our concern for the funding environment in which nonprofits carrying out critical social change work must operate. The series of three articles explores ways that private sector financing practices, especially those in private equity and venture capital, can be adapted to improve practices in nonprofit funding. We are grateful to The Aspen Institute’s Nonprofit Sector and Philanthropy Program for funding critical elements of this series.

This article is the first in a series exploring the adaptability of several venture capital (VC) financing principles to foundation grantmaking. It looks at Strategic Co-Funding: how do venture capital investors and grantmaking foundations and philanthropic individuals differ in their approaches to co-funding and how might the underlying principles of VC co-funding be adapted to foundation and individual giving? The article draws potential nonprofit capital market solutions from interviews with philanthropists, nonprofit experts, VC partners, and from a growing body of literature. The accompanying tool is designed to help an organization (or individual) determine whether Strategic Co-Funding is a good fit with its goals, mission, and processes.