• Context: Old friend of Dave’s; had done work in eg social impact bonds, and a few different nonprofits trying to do venture philanthropy.
  • Current org: optimize performance of programs and grants for addressing homelessness in Colorado
• Won city council (congrats!) for suburban Denver (lakeview?)
• https://www.ceemi.org/roger-low

[D] Saying a bit more, based on Roger’s background in social impact bonds, pay for performance structure (CEEMI)

• Manifund thinking through charitable donations impacts broadly, coming out of EA ecosystem

1. Building infrastructure
2. Regranting — HNW, care a lot about AI Safety, I’ll put up a pool for Manifund, divied up across people they trust (friends, experts), and then they will look at proposals, distribute money on my behalf. Lightweight grant management structure
3. Impact certificates — VC-ecosystem for new ideas that have impact. Roughly - pools of money that donors set up; early stage person can suggest it on the website; investors can buy slices of the project, and then founder
   • Is this a grant or an investment? [A] Investment
   • Could have a market along the way

Who should we be talking to? Reactions & thoughts to this

• To date: Bootstrapping, working with a few number of small donors, HNW who care about particular causes. To scale — do we go after this, pivot towards working with foundations, some other thing?

Roger’s recap:

Sees that Manifund, like many players in the social impact space, currently really has two things: 1) grants and 2) venture philanthropy.

1. Have taken a bunch of money (grants)
2. Or crowdfunding for things with social value (Venture philanthropy)
   • To buy a slice of a thing, with the expectation of a return (like in crowdfunding)
   • Or “concessional market returns” - social investing — still getting some return if that goes well.
     • Q: Regular market, or lower market returns
       • Some whose final goal is not to be a profitable venture
       • Also eg Lantern Bioworks — but
   • Roger was previously at New Profit (https://www.newprofit.org/) for a couple years
     • aside: “Venture philanthropy” is not a good name — “we take your money, try to do philanthropy using the strategic ideas of VC. focus on scale, long term, not trying to micromanage you, think nonprofits need growth capital instead of $50k for box lunches for orphans”. In exchange, want to have an active seat on your board?
     • https://www.newprofit.org/ — policy arm instead of deals. Didn’t really look at venture philanthropy model. Sense: this is pretty crowded, a number of orgs who are in competition for HNW individual & big institutional philanthropy. We’re good at taking money and deploying it strategically
       • New Profit — gatekeeper for Bill & Melinda Gates, Meridian Parker. They also are pretty good (network of HNW). These gatekeepers have the ability to say that they have a track record of finding TFA, kip, europe.
         • Sharp elbowed incumbents
     • Lot of waste in the system!
       • Bit cynical about philanthropy writ large - so many bloated nonprofits. People dump $m, they don’t have a culture of hustle, efficiency, getting what you want.
       • Say you’re a nonprofit that got $10m from MacKenzie Scott- how can they show it’s having a bigger impact than if they just sent it to a bunch of low-income families directly? Most orgs can’t show this
       • Venture Philanthropy — we’ll be an intermediary. Another word: “middleman” — a lot of people, salaries, smart people who are doing good diligence — need to pay them. Suddenly, taking quite a large amount of money out. Fine if you’re really demonstrating value. Not convinced that there’s really robust proof
         • No one has done a serious analysis of any intermediary - was the philanthropic impact higher by some metric, by virtue of their due diligence
         • Venture philanthropy is a good packaging for an idea, but doesn't always really have returns -- it in theory draws on the best ideas of VC, not micromanaging people, more early-stage capital, less restricted use of funds -- and in exchange, we want some sort of active role in your governance. (But taking that board seat is in tension with the trust that you're giving people through unrestricted capital). His sense is that at scale, it's a fairly crowded space of competition for HNW individuals and foundations, people saying "we're really good at money and deploying it strategically”

• Question on theory of change for 3?

  • Why not just put it on a crowdfunding (wefunder?) or kickstarter?
  • Pitch to HNW — if you have a prize pool, you can spur innovation
    • [D] On top of this — people are specific interested in how to optimize impact. Doing it in this way is a good way —- this optimizes the allocation
  • “That makes sense, cool model — but you’re in a crowded space wrt funding”. Think that in practice, too often, HNW and big institutional philanthropy aren’t putting in money because our diligence is better; but rather because they were persuaded that’s where they should put their money
    • Maybe you can persuade them with a strong case that we’re better. But so much of the game is about access. A lot of orgs who have locked down the big inst philanthropy. It’s very competitive. To scale, you need to sit down with billionaires, persuade them that our model is outperforming alternatives.
    • Hard to quantify impact in the short term. If we can figure out a way to do so that’s real

• Fundamental sickness of US philanthropy? Comes from a lot of super rich white dudes. How did they get it? Hockey stick growth models in SV, finance, wall street. How do you make money? You find a good idea and make a good idea

  • Good philanthropy & good investment in private sector are different
  • Billionaires think they are smart, and became that way by being smart; the tools that made them made them a lot are transferrable; don’t think that’s the case
  • Good philanthropy requires more patience.
  • Who is the client in philanthropy? Like to say it’s the environment, people — but really, nonprofits understand in practice it’s the people who write big checks. To scale need to be able to sit down with big institutional investors and persuade them that you outperform, which is hard.
  • Successful folks — people who open up checkbooks can speak the language of people who make a lot of money
    • "People don't always donate just because they've diligenced and found the absolute best, they donate where they're convinced they should put their money -- so much is about access”

• Insofar as a third party has to validate that the outcome is good, is good

  • [A] Impact certs as fundamental solve of principal-agent problem? Roger: that sounds really compelling, if you can do it. Evaluations are really hard, but we've learned a lot (e.g. RCTs are imperfect but still show some strong outcomes). RCT-validated or strong eval these should be at the front of the pack in terms of big scaling groups
  • A lot of funders are not good at doing this. Effective Altruism — they seem to get this. The US list — they have some of this. This is the right direction
    • But gets into very wonky evidence conversation where the big funders are quickly lost
    • Fundamental issue - orgs who have infra to do RCTs, are not the ones less that led by leaders that is more diverse (which is a goal that)
    • Scrappy startup lived experience — haven’t done a randomized evaluation, most big donors

• [Dave] If we’re trying to fight from “efficiency side”, hard to win; pools of money who are locked up, is good

  • Focus on telling donors this is about centering their judgment, rewarding scrappy early stage people like they used to be, and reducing their downside risk.  Focus on funders that aren't already locked up.
  • People who have lots of money think they’re smart, worked hard, like the idea of having social status
  • Then: “How do we make it very exciting to be the billionaire evaluating projects at the end”
  • How do we make it reaching out to pools of money that are not already locked up by Gates foundation friends

• Roger: Best for the world: convince billionaires to invest into programs that are proven; but not sexy enough for most funders.

  • So much of the game is about funding. If you can get MacKenzie Scott to give you $20m, you’re a player. Success begets success when it comes to fundraising.
  • Funding orgs gives you leverage to build a network of nonprofits, which snowballs

• Dave: Who else to talk to?

  • [R] New Profit? But our model is in direct competition with them.
  • Social Finance, Third Sector Capital Partners (https://www.thirdsectorcap.org/), Project Evident — orgs positioning in the due diligence/intermediary space.
  • Many established players are in direct competition; nonprofits like Social Finance or Third Sector Capital Partners, Project Evident are trying to position themselves as intermediaries, maybe connect with some of them?
    • Major player on impact, innovative finance
  • Obviously - talking to funders at the end of the day.
    • New Profit saying: “if you want money, ask for advice; if you want advice ask for money”.
    • Agrees we should talk to Abby Seldin sit down, love to pick your brain about this model, what is the need that you see? Good long-term development strategy. Now: See who else we can connect to in the philanthropic world
  • Roger: Trying to be careful about promising to connect people — in every meeting, but actually don’t have the bandwidth.
  • Middle of fundraising for CEEMI - most helpful ones are the ones I’ve tapped this most.
  • REDF - a venture philanthropy for employment social enterprises (e.g., orgs like Goodwill), which has positioned themselves in a really interesting way as an intermediary in that space.
  • Talk to Kickstarter (or someone in the crowdfunding space)