FOR IMMEDIATE RELEASE
Venn Foundation Launches “$1 Million by 2020”
Seed Capital Drive for Regional Social Businesses
MINNEAPOLIS (October 3, 2018)―Venn Foundation (Venn), with anchor financial support from Bush Foundation, today formally announced a bold new initiative to drive $1 million of seed capital to early-stage social businesses in Minnesota, South Dakota, North Dakota, and the 23 native nations that share this geography (the “region”) before January 1, 2020. The goal is to help make this region the best place in the country to launch and grow businesses that officially commit to solving social problems.
Social businesses are businesses that legally declare a social corporate purpose and require their leaders to continuously consider that purpose alongside of generating profit for owners. These companies pursue a “double-bottom-line” because they deliberately work to make both an impact and profit at the same time. Well-known national examples of social businesses include Patagonia, Kickstarter, and Method, as well as Sunrise Banks, Peace Coffee, and Finnegans, in Minnesota.
Under the “$1 Million by 2020” initiative, Venn Foundation will deploy seed capital to early-stage social businesses in the form of Program-Related Investments (PRIs). PRIs are a special kind of philanthropic investment made primarily to advance a charitable goal and on below-market financial terms. PRIs are incredibly versatile and can be structured as any financial tool (loan, equity, etc.) and made to any type of recipient that is advancing a charitable purpose, including social businesses.
“We like to call Program-Related Investments ‘The Starship Enterprise of Capital’,” said Jeff Ochs, CEO of Venn Foundation, “because PRIs can go where no other capital has gone before. Since risk and return expectations are anchored against one-time charitable grants, PRIs can succeed where for-profit capital markets often fail, like in the earliest stages of business development.”
Venn Foundation will capitalize its PRIs with contributions from donors using donor-advised funds (DAFs). Any individual, business, or foundation can set up a DAF with Venn and recommend that their tax-advantaged, charitable donations and grants be used to make PRIs. Venn can fund a single PRI with contributions from multiple DAFs. Financial returns from these PRIs go back into participating DAFs for donors to recommend redeployment into new PRIs or as grants to nonprofits.
As an anchor supporter of Venn’s “$1 Million by 2020” initiative, Bush Foundation is opening a DAF with Venn Foundation and making a contribution of $250,000. Venn will deploy these funds as PRIs for up to 10 regional social businesses on a 3:1 match basis. In this way, Venn Foundation and Bush Foundation hope to mobilize a broad set of donors behind early-stage social businesses as well as to attract $750,000 in additional capital to meet the $1 million goal by 2020.
“We believe businesses are positioned to solve some of our toughest social problems,” says Greg Keane, CFO of Bush Foundation, “Venn Foundation’s innovative approach of driving below-market investment capital to businesses that are intentionally helping advance charitable goals is really exciting to us. We hope our support will help motivate other foundations and donors to act now.”
Venn Foundation is accepting and reviewing applications from social businesses for PRI financing on a rolling basis. Applicants need not meet the definition of a social business at the time of application but would need to meet it by closing. For application information, visit www.vennfoundation.org/million-2020.
Venn Foundation has already made PRIs to two social businesses under this initiative. Binary Bridge, SBC, is commercializing a rugged electronic medical record system (BackpackEMR) that is specifically designed to support humanitarian medical missions and rural clinics in developing countries. Asiya, LLC, enables and encourages more Muslim girls and women to be physically active and participate in sports while also upholding religious traditions and cultural beliefs. The company designs and sells sports hijabs, which can be customized for clubs and sports teams, and advocates for inclusion in sports. Binary Bridge and Asiya have received $100,000 and $85,000 in PRI capital to date, respectively, with additional donations being accepted for these PRIs through October.
About Venn Foundation
Venn Foundation is a nonprofit public charity on a mission to unleash the full power of PRIs to advance charitable impact. Our vision is to create a new category of flexible, below-market investment capital that can be directed creatively to projects and organizations across all sectors that are helping advance charitable goals. To learn more, visit www.vennfoundation.org.
About Bush Foundation
The Bush Foundation invests in great ideas and the people who power them. Established in 1953 by 3M executive Archibald Bush and his wife, Edyth, the Foundation encourages individuals and organizations to think bigger and think differently about what is possible in communities across Minnesota, North Dakota, South Dakota, and the 23 Native nations that share the same geographic area. To learn more, visit www.bushfoundation.org.