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Summary of Philanthropy's Challenge: Building Nonprofit Capacity Through Venture Grantmaking

The challenge facing philanthropy today is to increase the effectiveness of nonprofit organizations. Consequently, grantors are now rethinking the way they provide funding. In his new book, Paul Firstenberg explores the implications for both grantors and grantees of a fundamental shift in focus on the part of grantors away from the funding of specific programs and toward building the capacity of organizations to perform their missions on a sustained basis.

Whether considered capacity building, venture philanthropy, social venture capital, or a model not yet articulated, a shift in focus on the part of grantors away from specific programs toward the full organizational potential of grantees will result in grantors being more actively engaged in the management of the entities they finance. Regardless of how the grantor/grantee relationship is structured, Mr. Firstenberg challenges grantors to proactively assist grantee management as the way to maximize the social impact of nonprofit programs. In particular because Mr. Firstenberg sees nonprofit organization boards as key venues for grantors providing management assistance to their grantees, a full chapter is devoted to governance issues and responsibilities.

This book is for grantmakers seeking to leverage their investment in nonprofit organizations by providing both funding and management assistance focused on organizational development; and for grantseekers who wish to understand how the growing grantor emphasis on organizational capacity building will impact their efforts to win support.

Mr. Firstenberg draws on his years of experience working in both nonprofit and for-profit organizations to explore the roles of grantor and grantee in various models of venture grantmaking. He presents several real-world examples of venture grantmaking, details the characteristics of organizations for which a venture grant is appropriate, and lays out the steps grantors can take to build the organizational capacity of their grantees using venture grants. He also sets out the issues grantees need to address in light of this changing focus on organizational development and what grantees should learn about potential grantors they approach for assistance.

Philanthropy's Challenge

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