Virtuous Capital: What Foundations Can Learn from Venture Capitalists

For decades, foundations have been making large grants to nonprofit organizations in the hope of meeting a wide range of society’s most pressing and vital needs. In 1995 alone, foundations invested more than $10 billion in programs dealing with, for example, poverty, homelessness, the environment, education, and the arts. Even as these large sums of money are put to work, however, many people in the nonprofit field are reporting a growing frustration that their programs’ goals, although valuable and praiseworthy, are not being achieved. Many social programs begin with high hopes and great promise, only to end up with limited impact and uncertain prospects.