New Profit, Inc.
The goal of New Profit Inc., a national venture philanthropy fund based in Cambridge, is nothing short of "transformative social change." And to achieve it, New Profit has taken a page from the private sector playbook, by using intellectual capital, strategy, and the fund's financial resources to help motivated nonprofits build their organizations and impact.
When New Profit funds an organization, it does so for multiple years, and without earmarking the money for a particular program. The funding is performance-based, however, and as part of the arrangement, New Profit sets specific targets for growth, and devises metrics to measure both an organization's scale and the difference it makes in the community. The fund invests exclusively in what it calls "aggressive social entrepreneurs" - organizations that are committed to rapid growth - and has participated in some remarkable expansions. To use just one example, New Profit has invested more than $1 million in Citizen Schools since 1999, a period in which the Boston-based apprenticeship program has grown its annual revenue nearly sixfold, to over $10 million, and has expanded from Boston to 13 cities in four states.
Although Kim Syman, a partner at New Profit, acknowledges that such rapid growth often entails a "period of bumpiness," New Profit has found that large organizations are generally better equipped to control quality, invest in management, measure their impact, and command resources. "Many people believe that when you grow fast, you're going to burst the organization's seams," says Syman. "But we've actually discovered that, in the case of the organizations we work with, more often than not growth is a driver of quality."