The GreenLight Fund is a new kind of funder and nonprofit. This nonprofit venture philanthropy organization was born in 2004 in Boston, as founders Margaret Hall and John Simon wondered, what if solutions for the challenges facing Boston’s highest need children already existed, but elsewhere? How could they be brought to Boston?
Simon, a venture capitalist with a background in both the nonprofit and for-profit sectors, and Hall, a nonprofit leader with an extensive career in organizational growth and development, created the GreenLight Fund to interrogate those questions and develop new strategies to scale effective work in the nonprofit sector.
Today, GreenLight supports the expansion of effective organizations to new cities in need of their proven outcomes, impacting children and families by “helping them gain social mobility and economic mobility and improve their lives,” according to co-founder and national executive director Margaret Hall. In 2015-2016, the GreenLight Fund reached over 60,000 children, youth and families across five GreenLight sites, not including the most recent addition of Charlotte, North Carolina.
The Chronicle of Social Change spoke with Hall about the GreenLight Fund’s approach, how nonprofit organizations can appeal to the venture capital world, and bringing a new lens to funding solutions for children’s issues. This interview has been edited for length and clarity.
The Chronicle of Social Change: In exploring GreenLight’s history and work, I find myself trying to put you in some more traditional category … In the realm of funder to nonprofit to consulting-type services, what of those arenas do you feel GreenLight operates the most from?
Margaret Hall: Probably the thing that we are most like is, and we are, [is] a venture philanthropy organization. We are a nonprofit that raises the dollars we invest in nonprofits, and we invest in those organizations much like a venture capital firm would invest in an early stage company. We are doing [a] kind of market analysis, or in our case needs assessment, in our communities — running a diligent process that is very rigorous that looks deeply at financial health, impact of the model, replicability, scalability and fit in our communities.
And then ultimately each year [we] select one organization, and then support it not only with dollars that we’ve raised but also our high engagement. So you know, [we] get involved in hiring the local executive director of the organizations we bring into a city, we take a seat on the local board, we introduce the local leadership so they create the kind of partnership locally and relationships, and board and donor community, and volunteer community that they’ll need to be successful over time. So if I were giving us a category, I would probably say venture philanthropy, high engaged funder. But we do raise the dollars we invest.
How do you determine which cities you go into?
We’re looking for cities where there’s high and concentrated need among low-income children and families, so we’re looking at high-level data around poverty rates, child poverty rates, unemployment, school performance. We’re also looking for cities where there’s a strong enough philanthropic community … an ecosystem that our organizations, and [GreenLight itself] frankly, can come into and thrive.
There are many, many cities in this country who certainly have the need and also have kind of local leadership desire, philanthropy to find new solutions to the needs that their residents face. So in many ways so far we’ve expanded pretty opportunistically and looked at cities based on the interest we’ve gotten from the city. Or someone we happen to know there who says, “you really should take a look at Charlotte, or Cincinnati or Detroit, you know for these reasons” that have put those cities on our radar.
Can you talk about the local governance that allows you to tailor programs to the local character?
Well, what GreenLight does is so absolutely local. We are locally focused and community-focused, and the decisions about the needs that we’re going to address and the organizations that we’re going to support in our cities are all made by the local GreenLight. So in every city we have a local GreenLight executive director who’s from the city who puts together and works with a group of community leaders that we call the selection advisory council. These are leaders from the nonprofit sector, philanthropy, the business community particularly the entrepreneurial investor part of the business community, community leaders. So it’s that group that really drives everything locally.
Increasingly nonprofits are responsible for trying to track data and evidence, but also have limited resources to put toward data collection. What are some ways you think smaller or newer nonprofits could develop evidence to appeal to venture philanthropy-type funding and get investor attention?
That’s a great question, because organizations can begin to prepare for and operate in a way that will get the attention of these kinds of funders and, as you say, more and more funders are looking for data around results and outcomes … A lot of what we look at is the extent to which a results focus and data collection is almost in the DNA of an organization – it was there from the very beginning, their program or service is really rooted in a theory of change, some would call it, that they based on research in the field of what’s really working, and there’s an evidence base and a logic to what they’re trying to do and why they’re trying to do it, and the outcomes they believe that they can achieve.
And alongside that there is a data collection and analysis piece that’s testing whether they are in fact getting the kind of outcomes, both in the shorter term and the longer term, that they want. That [the] logic is holding up in implementation. And organizations can do that from day one. And most if not all of our organizations do that from day one. They’ve had that DNA of being focused on results and using data to drive those results and course correct when things aren’t going the way they hoped. So you’re really using the data and the data collection to learn and improve, not just to know it’s working. But I think any organization can do that, certainly from the very beginning but at any time in their evolution.
Are there any test cases that particularly embody the work that you’re doing? Any learning moments that you can highlight from this process?
There are two trends we’re seeing more and more of that we’re really excited about. One is the extent to which organizations in our portfolio and organizations that we are looking at in the diligence process are developing and have developed creative and diversified approaches to revenue. I would say earlier on in GreenLight’s history, most of the organizations’ revenue came from straight philanthropy. I think what we’re seeing more and more in these scale-worthy and scale-ready organizations is creative ways of combining philanthropy with government funding streams that solve a problem that’s a high priority for government, or earned income and fee for service through partnerships with corporations that satisfy a business need of those corporations. I think that those bode really well for long-term sustainability and growth of these organizations.
Do you see in the future expansion plans any inclination toward going to a more rural community?
I think we’re certainly seeing that smaller markets, off the coast and away from the biggest cities in the country like a Boston or New York or Los Angeles, we’re seeing a different kind of uptake of GreenLight, in a Cincinnati or a Charlotte or even a Detroit. And kind of a bigger appetite for the work we’re doing, and giving the city the tools to attract really innovative approaches to the needs that they have, because these are cities where there hasn’t been as much activity or interest among organizations that are scaling to get to them. So I definitely think we will be looking more and more at the smaller cities off the coast, if you will.
The other thing I would say is that where we’ve been for a while, namely Boston, Philadelphia and the San Francisco area, we’re even seeing it now in Cincinnati: even though we’ve only been there a couple years, the organizations we bring in are scaling throughout the region and often throughout the state. Whereas I think it’s unlikely that we would go into a state and plant ourselves in a rural area, we are by planting ourselves in that state in a more urban area, able to use that as a springboard – or the portfolio organizations … have been able to use that as a springboard to expand throughout the state and serve areas across the state.
A great example is Youth Villages and its LifeSet program. We’re focused on Boston; we brought them in because of what was happening to young people aging out of the foster care system in the Boston area. They’re all over the state now. So I would say that’s how we will address more rural areas where there isn’t the same kind of philanthropy but there are other sources of revenue, whether it’s government or earned income that can help these best of the best models get there.
If you are interested in bringing the GreenLight Fund to your community, or joining its network of partners, email firstname.lastname@example.org.