Foundations, Philanthropy + Entrepreneurship: How to Capitalize Entrepreneurial Strategies

Funding an Entrepreneurial Ecosystem, Image via PexelsThe needs of entrepreneurship communities have changed, and so has the role of foundations and grant-making organizations. At our recent Affiliate Quarterly Conversation, we sat down with three foundation program managers to dig a little deeper into the role their foundation’s play in entrepreneurship and how they’ve developed their philanthropic mindset and measure success.

A philanthropic approach to the entrepreneurial mindset

“The role of foundations have become increasingly important to economic development,” says Pam Lewis, director of the New Economy Initiative (NEI) at Community Foundation of Southeast Michigan. “Government support of entrepreneurial endeavors that lead to new and existing business growth may be limited, especially for small ones in neighborhoods.” At New Economy Initiative, their role as philanthropists is unique. As a community foundation they are in the role of grant maker as well as ecosystem builder, storyteller and data collector.

As they were developing their fund, they discovered the new economy for southeast Michigan would only be as good as the economy of its main city, Detroit. They also discovered that it needed to include more than industry diversity. It needed to support growth of new and existing tech businesses as well as neighborhood businesses. Their role is investing in a network of support that is accessible to people.

Pam Bishop, vice president of economic development at the Southern Minnesota Initiative Foundation (SMIF), sees the need for a more systematic approach for business succession. People are working longer. More seniors are becoming entrepreneurs. Capacity for resource organizations is stretched, so more people need to step up to volunteer to contribute skills.

Also, with changes in population bases, the ethnicity of who is residing in small towns, people with a variety of skills and experiences offers opportunities for more people become successful entrepreneurs.

Measuring success

“The increasing role philanthropy in entrepreneurship allows foundations to bring their values to how they use their influential dollars,” says Lewis. “How do we use our dollars to promote the value of inclusion, not just inner city, but rural, veterans, women, etc.”

That is reflected in how NEI measures success. In addition to outcomes metrics, they now demonstrate progress by collecting stories and images of entrepreneurs showing different faces, showing passion, momentum, to share with community.

Chris Harris, who manages Market Gaps grants at the Ewing Marion Kauffman Foundation,  says foundations struggle with data collection. There are outputs/outcomes are attached to grant and reporting may be difficult for some groups. He hopes to see more programs come with non-financial asks. Perhaps some groups need help with capacity building, connections, programs, etc. 

Working collaboratively across communities

When working at a foundation, Chris also understands the abundance of opportunity. Since 2015, he has read more than 3,500 applications for funding, but they can’t fund all of it. So they look to fund programs that can be shared broadly, to prove out concepts, build networks that persist beyond the funding initiative or strategy.

Bishop works with small towns as convener, connector and catalyzer to create regional collaborations to grow community vitality. SMIF continues to find ways to assist entrepreneurs and seed new ideas as well as provide technical assistance, coaching and mentoring. The role of the foundation is to develop systems for long-lasting impact in communities.

Bishop believes entrepreneurs drive economy and works to help communities rethink their approach to economic development. By creating community collaborations and working in partnership with each other, Bishop has seen transformational change in some communities. Their process includes rethinking how to better measure change so people can understand the role they play in building the economy.

About SourceLink Affiliate Quarterly Conversations

SourceLink’s Quarterly Conversations are an exclusive benefit for affiliate members. Each quarter, the agenda include topics, speakers and discussions suggested by SourceLink communities to share best practices and collaborate with each other. Questions? Contact Dara Macan, Director of Global Business Development, [email protected].