Making Minnesota truly the most generous state: How the Constellation Fund is using data to eradicate poverty in the Twin Cities
Like many native Minnesotans, Andrew Dayton left the Midwest to pursue opportunity on the coast. Leaving the Twin Cities in January of 2015, he worked in San Francisco for a few years, gaining insight into the startup scene there before returning to his home state in 2017.
After working in the San Francisco mayor’s office, Dayton met the people behind Tipping Point, a company focused on fighting poverty in the Bay Area. By identifying the most impactful nonprofit organizations, the company is able to more efficiently give back to people in need. Seeing the energy and drive behind the work they were doing, he was inspired to bring their model back home.
Having grown up in Minnesota, Dayton was familiar with the philanthropic community, but was shocked when he heard about the wealth disparities in his hometown — how could the most generous state in the country have this many people living in poverty?
Disappointed that philanthropic donations in our infamously generous state weren’t making an impact on the communities who needed support the most, Dayton set out to use data to disrupt the way that Minnesotans donate in their local communities. Enter the Constellation Fund.
Bringing together a team of experts in policy, economics and poverty alleviation, he officially founded the poverty-fighting startup in October of 2018. The company is built with one goal in mind: to eradicate poverty by using predictive analytics to get the best possible return on philanthropic investment. “We identify and evaluate the organizations that are making the biggest impact,” he says.
Decision making in the nonprofit world is so different from corporate investing, says Dayton. Many donors are relying on subjective factors such as an organization’s anecdote or their intuition to decide where their money goes, instead of cold hard facts. This might explain why the population of people living in poverty in Minnesota has risen by 60 percent in the last 20 years, according to the Constellation Fund website.
“If things were working how they should be, we wouldn’t have to do this,” Dayton says of his company, which has already given four grants to four nonprofit partners. Blowing past their early goals, the startup is now in the process of refining its methodology and setting “even more ambitious goals.”
“The priority is not to fund as many [nonprofits] as we can,” Dayton says of their mission, “but to really do the diligence to identify the organizations in the community that are doing the best work.”
In other words, quality over quantity: The startup wants to focus and have a deep understanding of each organization that it works with to get the best possible returns on investment.
Dayton mentions admiring Twin Cities Startup Week and what the week-long festival does for the community for “as long as [it’s] been around.” After seeing the vibrant community in San Francisco, he believes there’s room for more innovation in the Twin Cities. “Beta.MN and Startup Week are really helping to drive that conversation.”
Wanting to be a part of this innovation, Dayton is planning a happy hour, presentation and brief panel discussion on his company during Startup Week. At the Bachelor Farmer on Thursday, October 10th, he and others behind the Constellation Fund will share what it’s doing and why it’s needed.
“The goal is to bring together some of the folks that we’ve been working with,” he says. “We’ve got an amazing group of experts in the community, working on cutting edge research when it comes to inequities and poverty elimination.”
While there is only room for about 100 people in the upstairs private event space at the North Loop restaurant, Dayton hopes some members of the general public and those in the startup community will attend to learn more about the organization.
Believing wholeheartedly in the importance of participating in initiatives like Startup Week, Dayton mentioned a “burgeoning momentum” from the younger generation of innovation leaders who might not be naturally connected to larger companies. “[Events like] this are a no-brainer to be able to tap into the energy that’s building in the community,” he says.
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