Friday, May 9, 2008

Start-up Capital

"[M]any apparently good ideas are really nothing but hopeless causes dressed up in fine sentiments."
Bryon Kennard,Nothing Can be Done, Everything is Possible

This is the kind of book I lent out and never got back, but I finally found a copy of the review I wrote for The Neighborhood Works of the Center for Neighborhood Technology twenty-six years ago. The book is a gem in the genre of folksy, hard-nosed reflections, opinions, and gut preferences about the world of social change.

A few choice bits on foundations and grants, quoting myself quoting Kennard: "New ideas go to the back of the line, and a rigged line at that. '[Y]ou can't get a grant unless you already have a grant.' Kennard advises that you can't get a grant for an innovation 'until you have already demonstrated it.' Sound familiar?"

Some kinds of groups are better equipped to penetrate foundation bulwarks than others. They've got networks, know how to phrase the magic words, and can show up. While foundation program officers like to think that they are out in the field searching for new ideas and exploring uncharted territory, more often than not they are on familiar ground, at least for some grantees.

And Kennard is right, many grants are to "take an idea to another level," not to start from scratch. There's some sense to that: groups that muster their own human, organizational, political, and financial capital to create a breathrough idea are more likely to stick with their innovation through tough times.

The questions are: Who gets left out? What great ideas remain undeveloped?


Josh said...

It makes sense that organizations need to show some initiative on their own. I do think, however, that there should be more grants and monies available to innovative projects that don't have the resources to get their ideas off the ground.

Perhaps foundations could take a hint from the entrepreneurial world on this by playing the role of venture capitalists and angel investors, granting small chunks of funds to new ideas with the understanding that more capital will become available with increasing success.

Bob Giloth said...

Good idea. I think some foundations do this already -- although they might not describe it that way. But,you're right, not a lot of them. I think foundations need to develop a more sophisticated investment approach for identifying, nurturing, model-building, and bringing innovations to scale.