John Simon worked countless hours making a name for himself in the for-profit sector as the managing director at Boston-based Sigma Prime Ventures. But what he’s doing in the nonprofit world can be seen – by many accounts – as an even greater effort.
And it’s catching the attention of industry titans from former General Motors CEO Rick Wagner to Home Depot co-founder Bernie Marcus.
|THE HOME DEPOT INC.
|GENERAL MOTORS CO.
They’re among a handful of prominent figures throwing their weight and money behind Simon’s GreenLight Fund, which is tackling some of society’s biggest challenges with its venture capital-like approach to philanthropy.
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Leveraging his business acumen, Simon identified early on in his career that while there were organizations that were successful at tackling economic or racial inequities, there wasn’t an infrastructure in place to get them into the communities that needed them most.
He wanted to bridge that gap by creating a network connecting social entrepreneurs and communities, so they could replicate change at scale.
“Having worked in the nonprofit sector, I experienced firsthand the challenges of bringing social innovation to the communities that need it most,” Simon said. “Time and time again, social entrepreneurs continue to develop innovative technologies and solutions that solve for the world’s greatest problems; and yet, they are limited by the distribution of those ideas.”
Founded in 2004 by Simon and nonprofit executive Margaret Hall, the fund first identifies needs within a community like broadening acces to food, education, creating job security and tackling mental health issues by leaning on local leaders.
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They then source organizations with a proven track record of successfully addressing that need, and one they believe will have the best chance of making a positive impact locally. It’s a strategy that the fund has already executed in a dozen cites around the country.
Marcus known for backing countless philanthropic endeavors, is the largest donor to GreenLight Fund Atlanta, and describes the undertaking as “brilliantly simple.”
“The concept struck our team as brilliantly simple: identify a social services gap in a community like Atlanta; address that gap with a best of breed solution already proven in other communities; and fund that solution with an earned revenue model so that it is sustainable in the long run without relying on ongoing donors,” Marcus told FOX Business.
A driver of the fund’s success, Wagner explained to FOX Business, is that it acts in “a manner which empowers local teams to choose the highest impact projects for their communities’ needs.”
After the fund identifies a program, GreenLight will issue multiyear startup capital and ensure the organizations create ongoing measurable social impact and long-term sustainability.
PAR Capital Management founder Paul Reeder described the fund’s strategy as “a pathway to prosperity for hundreds of thousands of Americans.”
When the fund kicked off two decades ago, Simon’s plan was to start in Boston, and tackle one problem within the city each year.
“I started to envision, well, if we could do this for Boston. We could do this in cities across the country. And if we could do this in cities across the country, we would essentially create this innovation superhighway,” Simon said.
Quickly his efforts proliferated. Within the next two years, the fund expects to have projects within 15 cities. It’s also on track to “reach about a million children and families a year,” Simon added.
They are milestones within his ultimate goal of becoming “one of the most important poverty fighting organizations in the entire country.”
GreenLight has invested $37 million in its 53 portfolio organizations to date. It’s also leveraging an additional $259 million raised by its portfolio organizations. That figure increased by more than 25% last year despite the uncertain economy.
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