New National Community of Philanthropic Funders, Practitioners to Promote Expansion of Effective Social Programs

October 22, 2009 — The Robert Wood Johnson Foundation, Growth Philanthropy Network and Duke University on Tuesday announced the creation of a first-of-its kind collaboration of philanthropic funders, practitioners, researchers and others designed to make it easier for top-performing social programs to expand widely to communities that need them.??

The Social Impact Exchange (The Exchange)—a cross-sector, member-driven group that will act as a focal point for studying, funding and implementing large expansions of proven social purpose organizations—will also hold a yearly competition to identify programs with the highest impact and readiness to grow, and support them with financial and consulting awards, the strategic partners said.??

“There is a growing sense of urgency in the social sector around the need to make progress on scale. The Exchange gives our sector a chance to learn together and develop the knowledge to effectively engage in nurturing and spreading our most effective social programs and solutions,” said Jane Isaacs Lowe, the Foundation’s team director for its work focused on helping vulnerable populations. “We hope that other foundations and funders will join us in this potentially transformative endeavor.”

??The Exchange will serve as a gathering place for knowledge-building and a platform for deal-making for those interested in scaling effective social solutions. The collaborative effort begins with 150 members who work across the spectrum of philanthropic activity.

??“Duke’s partnership with Growth Philanthropy Network to develop The Exchange is timely and significant,” said Joel L. Fleishman, professor of law and public policy and a leading expert in philanthropy and social policy. “By developing and disseminating knowledge on scaling-up and social enterprise we will fulfill our traditional role as an academic institution. By building, with The Exchange, a network of solution-finding, entrepreneurial organizations, we help turn that knowledge into action."??

“That action will stimulate even more projects and financial capital. It will greatly contribute to positive social change,” Fleishman said.??

Duke will serve as a founding member of The Exchange and act as strategic partner and primary academic adviser on making The Exchange a central component of a social sector capital marketplace and the hub for related research, publishing, education and training. The work will be undertaken in concert with GPN by the Center for Strategic Philanthropy and Civil Society (CSPCS) at Duke’s Sanford School of Public Policy and the university’s Center for the Advancement of Social Entrepreneurship (CASE) at The Fuqua School of Business.??

“Given the magnitude and urgency of the social problems we face both globally and in the U.S., nothing is more important than helping those with innovative solutions scale their impact,” said professor J. Gregory Dees, founding faculty director at CASE.

??“This new initiative holds great promise for doing just that,” said Dees, a widely recognized pioneer in researching and teaching social entrepreneurship.

??Alex Rossides, president and co-founder of GPN, said despite the energy and interest in growing effective programs, “we lack a common forum where we can work together, across sectors, and improve our ability to expand initiatives that work.”??

GPN’s focus is on establishing a capital marketplace to support scaling of social solutions.??

“Solutions to our social problems exist, but we have had great difficulty disseminating them broadly—in part because expansion requires collaborative funding and implementation,” Rossides said. “Having a common place where we can interact, share knowledge and learn together from the many efforts to grow effective programs that are being undertaken around the country will help accelerate our understanding and practice and improve outcomes.”??

The launch of The Exchange following several years of development comes at the same time Congress is providing money for a “social innovation fund,” to be managed by the newly created White House Office of Social Innovation and Civic Participation, which focuses on supporting growth of effective social programs and innovations.

The Exchange has three primary goals:
• Developing and sharing knowledge on practices for expanding programs that work.
• Providing venues to collaboratively fund expansion of successful initiatives.
• Helping build a field infrastructure for more efficient and effective scaling.

The Exchange will develop and share practical knowledge by making available an up-to-date library of relevant publications on a Web platform that will feature articles, tools, template business plans, real-time case studies, due diligence reports and academic research. Training will be offered at an annual conference, regional meetings and online.

The Exchange will facilitate collaborative investment in scaling by making available high-impact, well-vetted opportunities through an online clearinghouse and through an investment fair and the final round of a Social Impact Business Plan Competition, both scheduled to take place at the first annual conference in New York next June.

Finally, The Exchange will help build field infrastructure for growing effective programs by providing opportunities for members to jointly develop investment standards and processes, create more efficient methods to connect growth initiatives with donors, support intermediaries and forge effective public-private partnerships, and form funder groups focused on growth in different fields such as youth development, health and poverty alleviation.

"Shared knowledge and tools, as well as the benefits of being part of a network, should allow individuals and organizations to scale their impact more effectively and rapidly,” Dees said.

In announcing the launch of The Exchange, GPN said it will release a report based on its five years of investigation that finds the failure of top-performing programs to grow nationally represents a “huge missed opportunity to affect social change on a mass scale,” and that a well-organized, transparent and enduring system (a marketplace) can substantially enhance the way philanthropic capital is raised to support such scaling.

S. Robert Levine, M.D., chairman and co-founder of GPN, said The Exchange was designed in response to the report’s findings that show a national marketplace “is needed to fund large-scale expansions of top-performing programs and that for the marketplace to thrive six key elements must work in concert." They include:
1. Investment standards, transparent information and performance reporting.
2. A collaborative financing process that includes individuals, foundations, grants and debt.
3. Sufficient “deal flow,” a pool of high-impact nonprofits to demonstrate how a marketplace works.
4. Large-scale distribution to donors and a broad diversified national network of growth funders.
5. A network of expert intermediaries that aggregate growth capital for qualified scaling initiatives.
6. A focal point for shared learning, knowledge development and collective funding of high-impact growth initiatives.

“The Exchange is intended to provide a common platform where foundations, philanthropists, nonprofits, intermediaries, government officials, philanthropic advisers, researchers and service providers can participate in a scaling social impact marketplace and, through this collaboration, enhance the quality and volume of evidence-based expansion initiatives,” Levine said. “Together, we can take a huge step forward toward solving persistent social problems and bringing benefits to millions.”

The Growth Philanthropy Network is developing a nonprofit growth-capital marketplace in which foundations, private donors and others can make well-researched investments to help top-performing nonprofits with proven solutions expand nationally. Its mission is to exponentially increase the positive social impact of best-in-class programs that improve the lives of children and families.??The Center for Strategic Philanthropy and Civil Society at Duke University’s Sanford School of Public Policy researches, analyzes, and promotes philanthropy that consistently produces high impact. Its mission is to help philanthropy achieve broader and deeper impacts in solving problems facing the social sector and the wider civic community.??The Center for the Advancement of Social Entrepreneurship at The Fuqua School of Business at Duke University promotes the entrepreneurial pursuit of social impact through the thoughtful adaptation of business expertise.??The Robert Wood Johnson Foundation seeks to improve the health and health care of all Americans. Its efforts focus on improving both the health of everyone in America and their health care—how it’s delivered, how it’s paid for, and how well it does for patients and their families.