In Boston, a Fund Seeks Promising Nonprofits to Tackle Social Ills

For the past 15 years, philanthropists have poured money into the national offices of high-performing charities to help them start operations in new cities.

The GreenLight Fund, in Boston, is also focused on helping the best charities grow, but it inverts the process. The nine-year-old nonprofit organization first canvasses the city to uncover Boston’s greatest needs and then scours the country to find growing and proven charities that can be imported to combat the local problem.

John Simon, a Boston venture capitalist, and Margaret Hall, a veteran consultant to charities and foundations, co-founded the GreenLight Fund in 2003 with a goal of bringing in just one charity a year to help improve the lives of inner-city, low-income children and families in Boston. Nonprofit experts have hailed the approach as a success, and this year GreenLight is embarking on its first expansion—to the San Francisco Bay Area and Philadelphia.“This is an innovative concept, and it’s worthy of a close look by other communities,” says Andrew Hahn, a professor at Brandeis University and director of its Sillerman Center for the Advancement of Philanthropy, who also serves on the board of GreenLight.

A Reason to Expand

Mr. Simon hit upon the idea for GreenLight while trying to build the Steppingstone Foundation, a charity that he co-founded in 1990.

By 1997, Steppingstone, which provides instruction to urban kids in Boston to help them get into better schools, had earned a strong reputation, and Mr. Simon and his partner began to expand. But just getting Steppingstone established in two new cities—Hartford and Philadelphia—nearly exhausted the partners.

Mr. Simon thought about what might prompt the group to expand, yet again, to a city like Detroit.

A $20,000 planning grant? That wouldn’t be enough.

But what if a benefactor promised to pay for the affiliate’s first-year budget, provide additional support for another three years, help find a local executive director, and make sure that school principals, superintendents, and local donors would do their part?

“If somebody had called us and promised that,” Mr. Simon says, “we would have been on the next plane.”

No one ever did. But Mr. Simon became obsessed with making that promise himself—to attract some of the nation’s best charities to Boston.

Unique Process

With a staff of just three people in Boston, including Ms. Hall, its executive director, GreenLight operates unlike any other grant maker. The cycle begins with a GreenLight selection committee, made up of volunteers, looking deeply at Boston to identify current needs. GreenLight’s staff then starts a process of several months to identify charities from outside Boston that work in causes like education, youth development, job training, and health.

The selection committee helps narrow the list from 20 to just one winner, unveiled at a gala each September. Together, that event and a second gala in December and a golf tournament the following June typically raise more than $600,000—all of which goes to the local affiliate of the newly chosen charity.

Single Stop USA, the newest GreenLight group, which helps low-income families tap into government benefits, tax credits, and other essential services, received $750,000 from the two galas—and the forthcoming golf tournament promises even more money.

Young Entrepreneurs

Thanks to Mr. Simon’s connections and its venture-like approach, GreenLight has been popular with young entrepreneurs, venture capitalists, and investors. “We’re unlocking new dollars from these folks who aren’t typically engaged in low-income communities,” Mr. Simon says.

Many of the talented, business-savvy donors who attend the galas also become board members, advisers, and volunteers to the incoming charities.

By all accounts, the six organizations that GreenLight has brought to Boston are thriving. (See box on Page 24.)

Raising a Reader, a charity founded in Silicon Valley that distributes books to low-income families and helps parents learn how to read with children, started its Massachusetts affiliate in 2006 after winning that year’s GreenLight competition.

Donna DiFillippo, the charity’s executive director, worked alone out of donated office space at the Chelsea library that first year on a budget of less than $250,000. Now the affiliate has 10 full-time employees, 10 part-time staff members, and a budget that is expected to hit $1.7-million next year.

Raising a Reader still has four board members who got to know the charity through GreenLight events during that first year. And even today, the halo of GreenLight’s support helps the charity find additional donors.

“It’s a blue ribbon,” Mr. DiFillippo says. “In Boston, if you’re a GreenLight program, people know who you are.”

A Promising Approach

Vanessa Kirsch, founder and managing director of New Profit, a venture-philanthropy fund in Boston, consulted with Mr. Simon a decade ago as he was shaping GreenLight. She says GreenLight’s growth holds the promise of helping outstanding charities expand more quickly.

“Unlike in the for-profit sector, where the best ideas tend to spread quickly to meet consumer demand, what we see so often in the nonprofit sector is that proven solutions to social problems fail to scale efficiently and effectively to reach those in need,” Ms. Kirsch says. “GreenLight’s model gets to the heart of this problem.”

Mr. Simon and his wife, Susan, have a donor-advised fund at the Boston Foundation, but the majority of the couple’s giving goes to support GreenLight. Though he declines to say how much they have given to GreenLight, he does note that they fully cover the operating costs of the Boston office.

Spurred by Rejection

GreenLight isn’t the only fund with a formal process for tapping into outside innovators. Indianapolis’s Mind Trust, for example, uses a venture fund to lure groups that are doing a good job of improving education. But such efforts remain rare.

“There’s been a lot of good work to strengthen the national hubs of organizations, but historically there’s been less work around the spokes,” Mr. Simon says. “At GreenLight, we’re all about strengthening those spokes.”

In 2010, GreenLight sought a $5-million grant in the first competition run by the federal Social Innovation Fund, in the hope that it could operate GreenLight projects with help from eight community foundations.

The proposal wasn’t chosen, and the judges said a main concern was that GreenLight hadn’t demonstrated that it could operate in multiple cities.

The rejection “was a great spur for GreenLight to say, ‘Let’s try this expansion thing out,’” says Casey Johnson, the newly hired executive director of GreenLight Bay Area.

Bank of America Charitable Foundation made a $1-million grant to help cover start-up costs at the two new sites, and Mr. Simon also put up substantial money.

The GreenLight approach isn’t expensive: Mr. Simon says the new offices will operate for now with just one full-time employee. He hopes to be in 10 to 20 cities within the next decade.

“Just imagine what the country would look like if 20 major metropolitan areas were doing what we’re doing in Boston,” Mr. Simon says. “Imagine how much better off you might be if you were a child born into tough circumstances.”

High Energy

Those who know Mr. Simon don’t doubt that he can pull it off. He organized KEEN (Kids Enjoy Exercise Now), a program that teaches tennis to kids with disabilities, while a Rhodes scholar in England in the 1980s. The charity now has more than 10 chapters in England and the United States.

Mr. Simon joined a private-equity fund after returning to America but broke away at age 28 to found UroMed, a medical-device company that made him a fortune. He is now a managing director at General Catalyst Partners, a venture-capital fund that manages $2.5-billion.

William Schnoor, a corporate lawyer who has made a donation at every GreenLight fund-raising gala since its founding, says Mr. Simon identified a “big hole in the landscape” and has done a strong job of carrying out his idea.

“John has a combination of great imagination and vision, coupled with very practical and effective hands-on leadership,” Mr. Schnoor says. “But all of that wouldn’t be possible without an energy level that’s extremely high.”

As GreenLight expands, it will have to navigate the same wariness among existing charities that comes up periodically in Boston.

“That’s clearly been the first response of people who have some nerves about the model,” says Matt Joyce, executive director of GreenLight Philadelphia.

“Is GreenLight just creating a pipeline of new organizations that are going to compete for the same funding as existing organizations?”

Paul Grogan, president of the Boston Foundation, which awarded GreenLight a $400,000 grant in 2005, says concerns about too many charities chasing too few dollars are legitimate, but he adds that new charities doing good work should always be welcomed.

“You don’t want to cut off the air supply of new ideas, whether they’re homegrown or imported via GreenLight,” Mr. Grogan says.

Fight for Resources

The Bay Area and Philadelphia affiliates also must figure out how to win the strong support from individuals that GreenLight receives in Boston.

The Philadelphia location has secured $800,000 from foundations, including a $500,000 grant from the William Penn Foundation. Federal help is also possible—GreenLight has pitched another grant request to the Social Innovation Fund.

But neither new site has won big commitments from individuals yet. “It’s a hard model to explain in a tagline,” Ms. Hall acknowledges.

Mr. Simon says friends in the Bay Area have asked him what charities GreenLight will bring to the region.

“I don’t know,” Mr. Simon tells them. “All I can tell you is, we’ll run an amazing annual process, just like we have in Boston.”

Charities the GreenLight Fund Brought to Boston

Single Stop USA

Founded: 2001, in New York, as a program of the Robin Hood Foundation; became a separate charity in 2008

Year selected by GreenLight: 2011

What it does: Provides a centralized place at community colleges where low-income students can obtain services like benefits counseling, free tax preparation, legal assistance, and financial counseling

Family Independence Initiative

Founded: 2000, in Oakland, Calif.

Year selected by GreenLight: 2010

What it does: Enhances the social and economic mobility of low-income families by providing them with small amounts of capital and connections to opportunities

Youth Villages (Transitional Living Program)

Founded: 1986, in Memphis

Year selected by GreenLight: 2008

What it does: Helps 18-year-olds who are leaving foster care make a successful transition to adulthood

Peer Health Exchange

Founded: 2003, in New York

Year selected by GreenLight: 2007

What it does: Trains college students to deliver health-education programs in public schools

Raising a Reader

Founded: 1999, in Silicon Valley

Year selected by GreenLight: 2006

What it does: Provides bags of books to low-income families and helps parents learn how to read with their children

Friends of the Children

Founded: 1993, in Portland, Ore.

Year selected by GreenLight: 2005

What it does: Provides 12 years of mentoring, through high-school graduation, to students at risk of dropping out of school —Ben Gose