The following post is the second in a series of articles by Linda Giampa, Executive Director, Bay Area Lyme Foundation, for Money Inc.
Last month, Linda offered five steps that have had a positive impact on the success of Bay Area Lyme Foundation. Over the next several months, she is offering a closer look at each of these steps
For years, venture capitalists and non-profit organizations were seen as polar opposites, the antithesis of one another. But, as non-profit leaders, we can learn a great deal from our venture capitalist counterparts. Venture capitalists aim to ensure the companies they fund succeed, and our role as non-profits is to ensure our mission is accomplished. Both are conduits entrusted with investing the financial resources of others – venture capitalists are beholden to their investors while nonprofits have the same responsibility to their donors.
Both non-profits and VCs seek out bright talent and creative ideas in which to invest our time and money, and we expect returns on that investment. This process requires that we create relationships, monitor and analyze progress, and know when to boost funds as well as when to decline or curtail funding.
In the same way that investors rely on VCs to manage their money efficiently, we appreciate the generosity of our donors and aim to manage their money so as to achieve optimal results for our cause.
Creating and Fostering Relationships
At Bay Area Lyme Foundation, we fund novel research that is grounded in proven science, and we develop close collaborative relationships with researchers to help them explore robust hypotheses. We have a responsibility to our donors who put their trust in the foundation to direct their contributions to the most promising and effective programs and projects.
Like venture capitalists, we, at Bay Area Lyme Foundation, conduct extensive investigation into each researcher’s track record and their proposed projects before deciding to invest in their work. Scientists who are part of our organization and our science committee review every proposal and interview each researcher. The ideas must be novel and viable, and the researchers need to be collaborative and willing to comply with our reporting requirements.
There is a commitment to, and a partnership with, our researchers that begins before the project commences. We invest in the projects we believe have potential to have significant impact on the field and we, like any investor, are dedicated in helping that idea be successful. Part of that commitment includes supporting the network of researchers – an important asset for scientists attacking ground-breaking research with innovative approaches and tactics.
Monitoring and Analyzing Progress
In our contractual agreements that lay out the terms of the partnership with researchers, we clearly define our expectations regarding their accountability, including quarterly updates. Additionally, we are regularly in touch with each researcher to provide support and guidance as appropriate, and we encourage collaboration and problem-solving among the researchers we fund as well as our internal scientists. These relationships, and this level of reporting not only gives us the opportunity to closely monitor our investment and help ensure its success, but also allows us to keep our donors updated on our progress, and ensure we are able to share exciting developments with periodicals and the public when appropriate.
Investing Wisely and Responsibly
We value every dollar donated to our organization and want each one working hard toward fulfilling our mission. Therefore, we will continue to fund researchers who show positive outcomes, and are also unafraid to end a project when, deemed appropriate by all parties. While our rigorous initial vetting of the projects and our ongoing support of researchers helps foster success, there will always be circumstances when science surprises us and experiments fail. The close working relationships we develop with the researchers allows us to identify a problem quickly, and redirect funds to projects that will better support our goals and drive the results our donors hope to see. Novel research that will generate new scientific breakthroughs is the most difficult research and often the least likely to get funded. Having a rigorous process and a portfolio approach to our investing, allows us to take some smart risks, monitor and adapt as needed, and ultimately ensure that the funds go to the best projects.
Providing those we fund with the right tools to succeed, developing deep relationships that allow us to offer the right level of collaboration and support, and monitoring and managing progress to ensure accountability, are key elements in our process, and principles we leveraged from the VC model.
Is your non-profit investing wisely?