Nonprofits with ideas for entrepreneurial, projects to benefit Delaware now have a source of start-up funding through the new Start It Up Delaware Social Impact Fund at the Delaware Community Foundation.
Business catalyst company Start It Up Delaware Inc. (SIUD) and Discover Bank started the fund at the DCF, with Discover Bank providing an initial $250,000 capital infusion. Several other corporations and foundations are currently reviewing the concept and the opportunity for future funding, a release stated.
The new fund will help nonprofits launch projects or products that will result in self-sustaining income streams. The nonprofits will then be able to use that income to further their charitable work. All projects must benefit the state of Delaware, but may include organizations from other areas.
SIUD Co-Founder and Chairman Jon Brilliant will direct the fund with guidance from an expert volunteer investment committee.
“This unique fund will simultaneously help nonprofits solve real-world community-based problems, increase their own self-sufficiency, and establish itself as a self-sustaining model for innovation,” Brilliant said.
The SIUD Social Impact Fund will provide equity investments in the form of grants to help nonprofits launch their projects. The nonprofit will be required to accept a volunteer board member to provide guidance related to the project and to ensure the board and management are focused on achieving the expected results.
If and when the project is successful and delivers agreed-upon results, the nonprofit or project guarantor will donate the amount of the original investment plus a negotiated return back into the fund. That will enable the money to be “recycled” to underwrite additional social ventures and allow for growth of the fund. If a project is unsuccessful, the nonprofit may not be required to return the funds as would be the case with traditional equity investing.
The SIUD Social Impact Fund is similar to social impact bonds, which have been increasing in popularity around the world since first created in the United Kingdom in 2010. In the United States, Massachusetts, New York and Utah have created social impact bond programs. The SIUD fund, however, is unique in that the invested money and its return are paid back into the nonprofit fund to be used for additional nonprofit work.
“This is the perfect example of how the Delaware Community Foundation facilitates creative public-private collaborations that help nonprofit organizations maximize their service to the community and maximize the impact of philanthropists’ charitable giving,” said DCF CEO Fred C. Sears.
Discover Bank President James Roszkowski hopes that other civic-minded venture capitalists also will provide financial support to the SIUD fund to encourage nonprofits to be innovative in their approach to generating funding in order to serve Delaware residents.
The first recipient, the Health for America (HFA) Fellowship program, is partnering with Christiana Care Health System. The SIUD Social Impact Fund empowers four HFA Fellows from diverse backgrounds – including engineering, consulting and public health – to spend one year working with physicians, thought leaders and community members to identify areas that need the most important improvement within the treatment of chronic heart failure.
Fellows are young leaders selected from a national pool of applicants. Utilizing design thinking, fellows are working to develop a specific, high-impact product, service or solution that will improve outcomes and lower costs. For more information about the fellows and their progress, visit www.healthforamerica.org.
Broadly defined as the heart’s inability to maintain sufficient blood flow, heart failure contributes to one in every four deaths in Delaware and one in every nine deaths nationwide. It accounts for over one million hospital admissions each year.
“Heart disease is a public health crisis that is taking an enormous human and economic toll in Delaware and around the world,” said Patrick Grusenmeyer, Sc.D., president of Christiana Care Health Initiatives, which explores creative solutions to improve patient care. “Thanks to the SIUD Social Impact grant, we look forward to developing innovative technological solutions to add greater quality and value and advance the care of patients who suffer from heart failure.”
SIUD has a pipeline of Delaware nonprofits developing innovative and promising projects to be considered for future funding, ranging from a statewide job placement project to an agricultural project in Sussex County, Brilliant said.
Those interested in supporting the SIUD Social Impact Fund and nonprofits wishing to apply for SIUD funding should contact Jon Brilliant at jon@startitupdelaware.org.
