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When SCP was formed in early 2001, the original concept was to be a catalyst
for large-scale social change in Canada by investing in great nonprofit
organizations that had a system changing idea, visionary leadership
and dramatic growth potential . Our initial investing strategy was
based on a relatively new concept called venture philanthropy. Venture
philanthropy is an approach for funding nonprofit organizations
through the discipline of an “investment lens” as well
as a philanthropic one. Venture philanthropists provide financing,
and strategic and operational support, to those organizations that
meet certain criteria for delivering measurable results.
Our concept was loosely modeled after New Profit, Inc., one of the
most highly-regarded U.S. venture philanthropy organizations. Our
plan, at the outset, was to look for innovative, growth-oriented charitable
organizations with great ideas. We developed our investment criteria
by which we could make our “investment” decisions (our
grants). These criteria included:
- A great idea
- Visionary leader
- A commitment to sound business practices
- Scalable idea/organization
- Clear definition of success
- Limited dependencies
- Clear path to financial self-sufficiency
Having developed these criteria, we then went in search of one
or two Canadian non-profits that could meet them. As it turned out,
most of the organizations we examined could not meet our “limited
dependencies” test. By this, we meant that we wanted to invest
in organizations that had control of their own destiny and weren’t
overly dependent on any particular funding sources or other organization,
because achieving ambitious goals would be difficult enough without
relying on other organizations to accept the performance-based funding
principles at the core of venture philanthropy. The problem we encountered
is described in the next section, Strategic Barriers.
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