a field that is supposed to be color blind, [black Americans]
face some of the toughest hurdles raising money in Silicon
Valley. Largely shut out of this closed network of investors,
investment bankers, lawyers, and business people who regularly
meet for breakfast at Buck's in Woodside and schmooze over
dinner at Il Fornaio in Palo Alto, a growing number of black
entrepreneurs are doing something about it. They 're forming
networks of their own to raise the profile of black businesses
and increase their numbers."
-From "Blacks Do End-run
on Venture Woes" by Jessica Guynn,
Contra Costa Times
June, 2001. (See
Charles Crockett is a partner in Ascend
a venture capital firm that invests in early stage technology
All four of our company's partners are African-American.
Before we started our own business, we were all senior executives
at investment banking and private equity firms. All of us
would run across attractive investment opportunities, but
our respective firms didn't necessarily have an interest
in them. So we decided to pool our own financial resources
and invest in private companies. As word got out in the
marketplace that there were four African Americans willing
to put their own risk capital to work and aggregate the
capital of others (sometimes amounting to more than a million
dollars), before we knew it, we had a portfolio of sixteen
companies. We decided to leave our firms and form the Ascend
The biggest way that money has changed things
for us is that, because all four of us had been financially
successful in our individual careers before we started the
firm, we were able to take capital and deploy it in other
situations. We could have done other things that were not
nearly as risky, but the money gave us the flexibility to
take risks. If we hadn't had the capital to lose, we would
never have considered it. If we hadn't first been financially
successful, there is no way we could have thought about
making these investments in early-stage technology companies.
What distinguishes us from other venture
capital firms is that we leverage our own network of women
and minorities to find good investment opportunities. For
example, we'll find an investment opportunity because we
have a relationship with a minority entrepreneur, or we'll
hear about a new company because we're close to an African-American
student business association, or we come across a company
through an organization that is promoting female entrepreneurship.
This network allows us to identify attractive business opportunities
to which other venture capital firms would probably not
have access. The companies we invest in still have to be
held to the same standard as other businesses.
Our business model is investing in good
businesses. The value of creating successful new businesses
can't be underestimated. For us to play a small part in
establishing new small companies that will employ hundreds
of people and assist many other businesses to become more
efficient is important in and of itself. A by-product of
our sourcing strategy is that many of the businesses we
help create are led by women and minorities. Of far greater
importance, however, is that we have to make profitable
investments for our limited partners. Otherwise we won't
continue to have capital to invest. It is so important for
us to have capital to enable others to pursue their dreams.
-From a conversation with Pamela Gerloff
Loescher is director of programs for Changemakers (
), a national foundation that gives
grants to organizations practicing and promoting community-
based philanthropy; it also helps donors direct their giving
toward social change.
To me, community-based philanthropy is the
point where personal transformation and societal change
intersect. In this model of philanthropy, diverse groups
of people come together to create a common vision for a
better future, and this enables change on many levels. Everyone
comes to the table with different resources. Some have financial
capital; others, in the words of Wayne Muller (
have "wisdom capital." Grantor and grantee decide together
where and how to use the available resources. Through community-based
philanthropy, those of us with access to wealth can more
fully understand that the real authorities on how to solve
social problems are the people who are experiencing those
problems directly. Having never been poor or hungry, how
fully can I understand what is needed to create systemic
and sustainable change in communities where everyone has
experienced poverty? As people come together as equal partners
in creating community change, they often go through incredible
shifts in their perceptions of and actions toward others.
I've seen people who wouldn't otherwise cross paths inspire
each other to give more , take action on an issue, and be
more patient with people who are different from them.
Not only does community-based philanthropy
help us make better grant decisions, but the process of
making those grants can transform people's lives by helping
us break through the barriers that separate us from one
another. Then philanthropy is no longer about helping "those"
people; it is about creating a circle of giving and receiving
in which we are all nurtured and celebrated.
-From a conversation with Pamela Gerloff
1 For an interview with Wayne Muller, see
Than Money Journal
issue #26, Effective Giving: Finding
Your Own Path.
of America's most ambitious and creative nonprofits have concluded
that handouts are no longer enough, that government and altruism
can't improve the lives of the poor. The new nonprofits want
to harness themselves and their causes to the unparalleled
power of the marketplace."
-From "Charity For Profit:
How the New Social Entrepreneurs Are Creating Good" by Carl
, June 16, 2000 (See
Bill Shore is founder of Community Wealth
Ventures, Inc. (CWV), based in Washington, D.C. Community
Wealth Ventures (
is a national for-profit subsidiary of the nonprofit anti-hunger
organization Share Our Strength. CWV helps nonprofits generate
new sources of revenue to support their work.
Nonprofits need to stop expecting donations
simply because their cause is noble. They have valuable,
and sellable, assets-expertise, networks of volunteers,
long experience in helping people. They need to stop thinking
of how to get donations and start thinking of how to market
assets. Nonprofits can create their own wealth, enough to
effect social change on a vast new scale-lasting, radical
Community wealth is financial wealth that
is "owned" by the community rather than by its shareholders.
It is tangible wealth, and it can and should be used to
benefit the community. It is wealth that is "earned" by
rather than transferred to a nonprofit organization. For
example, CWV worked with a large health care services provider
and discovered that its IT division was providing outstanding
technical and computer related assistance to the organization's
employees. CWV helped the organization formalize these activities
and offer them as for-fee IT consulting and training services
for all are a nonprofits. The organization's nonprofit expertise
and technical personnel were key competitive advantages
that have helped them grow in this market.
Whether or not organizations succeed in
creating community wealth depends on their ability to think
in new ways about assets they may have taken for granted
or not initially recognized as such. It all begins by understanding
that you are worth more than you think.
You may wonder: how do we do this without
compromising our values or selling our soul? I think what
you have to do is to view it as a means to an end. Is thinking
this way a distraction? Well, maybe. Is it as distracting
as spending six weeks of the year talking on the phone to
people to get them to come to a fundraising dinner they
don't really want to come to in the first place?
This is what is at stake in creating community
wealth: it will determine whether we address our most pressing
social needs with whatever leftover resources are available,
or instead with the best resources available; it will determine
whether our progress is incremental or monumental; it will
determine whether our grant recipients and community partners
have the ability to do not only what is popular, but what
is right; it will determine whether our grant recipients
and community partners have the freedom to invest in themselves
and their own operating capacity; and it will determine
whether those who live in and work closest to the communities
they serve have the freedom to run their programs their
way. For these reasons, community wealth means something
far more important than money. It means dignity.
- Excerpted and adapted from
by Bill Shore and "Profit with Honor" by Tracy
Wall Street Journal,
December 19, 1999.
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