US Private Giving Field Trip 2014: Day Three

David Allen from Yajilarra Trust shares his thoughts on another influential day meeting leading US foundations.

Day 3 started with  breakfast at the Edna McConnell Clarke Foundation (EMCF), which has its origins in the Avon business. 

We were treated to a fascinating description of the process for making a grant - from sourcing, screening and making ‘the call’ and an initial business planning grant, through to review and making the ‘investment’. The whole process typically takes a year, during which time the not-for-profit needs to decide if they want to accept the funds, and EMCF’s active style of grant management.

We heard how Chuck Harris (ex-Goldman Sachs) takes the recipient’s managers and the business plan on a roadshow in a process they call the Growth Capital Aggregation Fund. This brings other funders in on the same plan and reporting regime - typically providing a further two to three times more capital than EMCF.
Our next stop was downtown to the FB Heron Foundation. Here we heard that the distinction between the operating costs of a not-for-profit and the growth capital needed was also clear in their approach. FB Heron’s primary concern is to provide growth capital to achieve social returns. Which financial instrument they use to achieve it is a distant second concern; grants, below-market loans, market loans or equity instruments are all used.

The can-do ex-Merrill banker summarised their flexible approach with “Whatever the need is, I have a tool for that.” This ‘whatever it takes’ mentality echoing from Einhorn’s green apples* on Monday. 

The disregard for traditional ‘investing’ and ‘granting’ demarkation felt revolutionary.

Today held the full range of New York City emotions, from the intellectual stimulation in our meetings, a convivial lunch in Tribeca, a cruise down the mecca of commerce that is Fifth Avenue to poignant reflections at the 9/11 memorial, where we stopped and regained perspective amongst all the busy-ness.
The final meeting of the day was with Non-Profit Finance Fund, a lending and advisory business that showed us that loans are often overlooked in the suite of tools available for funding not-for-profits, and that granting should be the instrument of last resort.
However, the best was yet to come; dinner with Sir James Wolfenshon. His gravitas and humble and humorous style of statesmanship surpassing even the grandeur of the private club where we were hosted - a truly memorable event.

Sir James Wolfenshon and Louise Walsh (CEO, Philanthropy Australia).
*The Einhorn Foundation uses a picture of a green apple to remind itself that if putting green apples on the corner of every street would help them reach their objective, then they would do it, whatever it takes.

Oct. 31, 2014

 Tags: us private giving field trip 2014

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