Impact Investing · · 5 min read

How GreenLight Fund Brings a Venture Capital Approach to the Nonprofit Sector

Unlike other philanthropy organizations, GreenLight Fund brings a venture capital approach to the nonprofit sector, transforming the lives of millions of children and families through a unique model that scales social innovation more efficiently and effectively. Over the last twenty years, GreenLigh

GreenLight Fund Brings a Venture Capital Approach to the Nonprofit Sector

Unlike other philanthropy organizations, GreenLight Fund brings a venture capital approach to the nonprofit sector, transforming the lives of millions of children and families through a unique model that scales social innovation more efficiently and effectively.

Over the last twenty years, GreenLight Fund has built and implemented a distribution model that facilitates social good by creating a city-by-city network that connects communities to implement new programs and solutions that address systemic issues (such as financial inequities or access to education in cities in need).

They understand that the best social impact programs, organizations, or solutions may not be found close to home, which is why the organization identifies social entrepreneurs that have built the most innovative solutions that work to address the specific and particular needs of each of the GreenLight communities.

GreenLight Fund operates in 12 cities including Atlanta, Boston, Charlotte, Chicago, Cincinnati, Detroit, Kansas City, Greater Newark, Philadelphia, San Francisco, and Twin Cities, with plans to expand into 25-30 cities by 2035.

More than 565,000 individuals and families were reached by GreenLight initiatives in 2021-2022.

John Simon, Co-Founder and Board Chair of GreenLight Fund

Below is an interview with John Simon, Co-Founder and Board Chair of GreenLight Fund, an active entrepreneur and investor who also founded General Catalyst.

For more interviews with social entrepreneurs, check out the Disruptors for GOOD podcast.

What was the Origin Story of GreenLight Fund?

John: In the for profit sector, great ideas that are experiencing success spread. However, in the nonprofit sector, I experienced firsthand the challenges of bringing social innovation to the communities that need it most.

Time and time again, I would come across social entrepreneurs who continued to develop innovative technologies and solutions that could solve systemic issues in a community, but they were ultimately limited by the distribution of those ideas.

This distribution issue is a massive problem when it comes to addressing some of our country’s largest issues – economic inequities, asset building, access to quality education and employment opportunities, community safety, housing, food insecurity and more. We know what the solutions are.

We have the technology.

We just lack the infrastructure to get them into the cities that need them most.

GreenLight Fund was created to design a new playbook that addresses this exact issue, establishing a nationwide network that aims to scale and replicate change in our communities.

We do this in a locally-driven way, pulling proven social innovations into cities at the time when the community has determined they are needed.

About GreenLight Fund

What is the Mission and Vision of GreenLight Fund?

John: GreenLight Fund is radically changing the way we spread social innovation. As a nonprofit change network with hubs across 12 different US cities, we take a venture capital approach to philanthropy, opening opportunities and breaking down barriers for millions of children and families to transform their lives through a unique model that scales social innovation more efficiently and effectively.

GreenLight Fund facilitates this community-driven change by engaging with the local community to prioritize unmet needs and then identifying high impact solutions that address those needs and have major, downstream effects.

Meaning that every seemingly singular change has the ability to impact an entire community and drive change at large.

As we look ahead, we hope to be in 20 – 30 more cities across the country, deploying more than 200 social innovations, and reaching 3-4M children and families annually with life-changing programs.

How Does GreenLight Fund Impact Lives in a Positive Way?

John: GreenLight Fund is working to scale solutions to some of our country’s largest systemic issues. A great example of the work we do is the program we helped scale to Boston, MA, Youth Villages LifeSet.

In 2008 the Boston Foundation released a report that found in 2005 more than 800 young adults that aged out of the foster care system were attempting to live on their own without any family or financial support.

So we identified and brought to Boston Youth Villages LifeSet, an innovative organization that had demonstrated tremendous impact with youths aging out of the system in Tennessee.

Fast forward to 2021, at 12 months post-discharge, 90% of youths that participated in Youth Villages LifeSet program were in school, employed or in GED classes, and 95% were living at home or independently, compared to the reported 54% unemployed and 37% homeless in 2005.

This is only one example.

We’ve brought 50 organizations to cities, each having measurable impact.

And we are on a path to adding cities and running our process every year in each city to address community-identified unmet needs and spread what works.

When it comes to identifying new cities, we look at a wide set of criteria that helps us understand where we can make the largest impact reaching hundreds of thousands of individuals, not just tens of thousands.

We also look at where the gaps are – the inequities, barriers and data – that indicate persistent challenges that are not yet being fully addressed in those communities.

How Have You Funded the Organization Thus Far?

John: GreenLight’s funding model is based on multiyear Funds. In each city, before we enter, and on average every five years thereafter, we raise a $5-6M Fund.

These are performance-oriented funds that outline the social return we will achieve: selecting and scaling four nonprofit solutions over five to six years that address community-identified unmet needs that will move the needle on persistent barriers to economic mobility, metrics that haven’t been moving, with significant philanthropic leverage.

To date, we have raised approximately $100M in cities in this way.

The results and exponential social return of past Funds continue to influence additional Funds with increasing commitments and we expect this to continue.

All of the dollars raised locally, stay locally.

It is a model that continues to build momentum, an impactful, locally-oriented “flywheel.” GreenLight also raises funds nationally to power the infrastructure, systems and learning that supports the whole network.

We raise performance oriented funds of approximately $15M+ every three to four years. The massive social return on these dollars is the social return across our whole network, 12 soon to be 15 cities.

National donors are looking to enable positive, measurable change at a massive scale annually as cities across the country help other cities via GreenLight’s model to pull in what’s needed and spread what works.

What Tools Do You Use to Run GreenLight Fund?

John: Our site teams rely on their colleagues in other sites as well as our national functional areas for regular communication that informs their work locally, helps problem solve and is an opportunity for sites to learn from each other, continually improving our work and impact.

At the same time, our site executive directors meet regularly with the local nonprofits GreenLight has brought to their city to provide strategic support and connections to potential partners and resources.

Zoom and the Google Suite help to facilitate these touchpoints and interactions.

Our portfolio team maintains an extensive database (Apricot) of proven nonprofits we have vetted that we have scaled or may potentially scale to our sites.

We utilize Salesforce for investor relationship management, Mailchimp for communication with stakeholders and WordPress for our website.

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