The Power of Venture Philanthropy
For 15 years, the Draper Richards Kaplan Foundation has pioneered venture philanthropy as a unique approach to finding, funding and supporting social entrepreneurs who are changing the world.
We do this by making three-year, unrestricted grants to leaders who have the vision and capacity to build strong organizations that, at scale, can have a significant impact. Having funded nearly 100 organizations to date, we’ve also learned that giving money and checking in from time to time isn’t enough. We’ve found that by partnering with passionate leaders in the growth stage and giving them rigorous and ongoing support, we can help dynamic leaders dream even bigger.
We’re not shy about saying we’ve borrowed this perspective from our venture capital legacy, allowing us to create a unique model. We find exceptional individuals and ideas through exhaustive due diligence with hundreds of potential prospects, working in close contact with our partners and networks. We look for the most compelling opportunities to build and sustain impact, rather than focusing on specific issues or geographies.
A hands-on approach to driving success
What do we look for? We seek out people who exhibit characteristics of extraordinary leadership: vision, intelligence, empathy, ambition and follow-through. We identify entrepreneurs who demonstrate a full spectrum of competencies. As a result of our unapologetically rigorous, venture capital-style due diligence process, our entrepreneurs and their advisors routinely say that our questions pushed their own thinking, helping them to further evolve and refine their models.
Early on, we recognized two things that drive our funding model of providing three-year unrestricted investments. The first one is that unrestricted capital is critical for building strong, sustainable organizations. The second is that multi-year funding, as opposed to a one-time grant, is a critical success factor in helping these organizations scale their efforts.
Our directors join the boards of our grantee organizations for three years, often serving as the first “outsider” board member. We work day and night with our grantees, sharing our networks and contacts, facilitating meetings, convening critical resources and working side by side with each leader to help them reach their full potential and achieve their vision.
In the past 15 years, we’ve become savvy in recognizing common start-up challenges, and we partner with our entrepreneurs to help navigate these issues effectively and quickly.
A track record of impact across sectors
We have invested in nearly 100 social entrepreneurs operating both domestically and internationally. Since our first dollar was invested in our portfolio companies, each dollar has been leveraged more than 75 times, raising over $1.5 billion dollars for our portfolio companies who are advancing social good across the globe.
Our portfolio grantees have averaged more than 50% year-over-year growth in revenue over their 3-year grant cycle, and many have achieved multiples of their forecasted metrics.
Our investments can speak for themselves:
- Room to Read has helped a staggering 10 million children to become more literate.
- Kiva has enabled more than $550 million in small loans to low-income businesses.
- One Acre Fund reached more than 130,000 farm families in 2013 alone and increased their farm income by 50–100%.
- EducationSuperHighway urged the Federal Communications Commission to spend more on broadband for schools causing them to double their investment to over $2 billion a year.
- SIRUM redistributed close to $5 million of medication to 85,000 patients across the nation.
- Crisis Text Line counselors have exchanged over 8 million messages with individuals in distress.
- Watsi’s 16,000 donors have contributed $5.5 million to fund care for 6,500 patients around the world.
- Solar Sister launched over 2,000 clean energy businesses powered by women entrepreneurs, reaching more than 350,000 people with solar lights and clean cook stoves.
Our venture philanthropy approach enables us to find, fund, and support promising social enterprises at the time of their greatest need: the growth stage. Our focus on early-stage social investments allows us to have an influence on strategy and operations, to leverage early dollars for impact, and to position our grantees for continued growth and significant contributions to our most pressing social issues.
Jim Bildner, CEO, Draper Richards Kaplan Foundation