By Bill Draper, Draper Richards Kaplan Foundation

In this open letter to philanthropists working with few or no staff, venture capitalist turned venture philanthropist Bill Draper outlines an approach to address today’s social issues. Just as the best venture capitalists achieve enormous, outsized impact in their chosen for-profit investments, each of us, as investors in the nonprofit arena, can strive for the same returns. Draper, one of the first to transfer his venture approach to philanthropy, offers a 3-step model and examples of successful investments.

At the Draper Richards Kaplan Foundation, we have one singular belief that drives everything we do. We believe that, with early funding and rigorous support, exceptional social entrepreneurs tackling some of society’s most complex problems can make the world a better place. It’s that simple.

We’ve taken this one singular belief, borrowed from our venture capital legacy, and created a unique model, proven over a decade, for working with world-class social entrepreneurs. We find, fund, and support leaders with exceptional promise and impactful ideas that have the potential to scale.

A time-tested three-step process

It’s hard work to be sure, but over the past 12 years, we have seen these organizations materially impact the lives of millions.

• Find—Through exhaustive due diligence on hundreds of potential portfolio opportunities, working in close contact with partners, networks, and institutions crossing the public, private, and non-profit sector, we narrow our focus on a select group of exceptional leaders and organizations.
• Fund—Early on, we recognized two things that drive our funding model: 1) unrestricted capital is the most precious capital that our portfolio companies need to build out their organizations; and 2) multiyear funding, as opposed to a one-time grant, is a critical success factor in helping these great organizations achieve scale.
• Support—We also have learned that just giving early stage organizations money and checking in periodically isn’t enough. Our approach is materially different. We partner with the leaders of these organizations and provide rigorous and unrelenting ongoing support. We take a board seat for 3 years, often serving as the first outside board member. We work day and night with our grantees, opening our networks and contacts to each of these select organizations, facilitating meetings, convening critical resources, and working side by side with each leader to help all reach their full potential and build their organizations to scale.

Since we started in 2002, we have invested in more than 60 social entrepreneurs both domestically and internationally. Since our first dollar was invested in our portfolio companies, our dollars have been leveraged more than 50 times, raising over three-quarters of a billion dollars for our portfolio companies who are advancing social good across the globe.

Our portfolio grantees have averaged more than 50% year-over-year growth in revenue over their 3-year grant cycle, and many have achieved multiples of the key impact metrics that they track.

Our early investments speak for themselves:

• Kiva has enabled more than $550 million in loans to low-income businesses;
• One Acre Fund reached more than 130,000 farm families in 2013 alone and increased their farm income by 50%–100%;
• Room to Read has helped a staggering 8.8 million children to become more literate;
• VisionSpring has delivered over 1.7 million pairs of eyeglasses to the developing world; and the list goes on and on.

And whereas our legacy investments are impressive, our current portfolio reflects similar innovation and promise, helping to provide critical access to health care, food security, social justice, water and sanitation, transparency and accountability, and shelter.

We look forward to partnering with all of you to find, fund, and support social entrepreneurs—and change the world together.

Hear from other philanthropic thought leaders in Exponent Philanthropy’s report Outsized Impact

William H. (Bill) Draper III is one of America’s first venture capitalists. He serves as co-chairman of the Draper Richards Kaplan Foundation, which seeks to dramatically improve the lives of people and the world around us through innovative strategies, systems changing approaches, and disrupting technologies. The foundation’s goal is to find social entrepreneurs with dynamic ideas and nurture them at the early stages with maximum leverage and total commitment.