Making a Difference in Baja California through Venture Philanthropy Richard Kiy International Community Foundation Baja Social Venture Partners Fund Organizational Meeting June 25, 2003

International Community Foundation (ICF) Established in 1990 from TSDF $895, $2.6 million to date 97% of giving is donor advised (less than 3% discretionary) Asia and the Americas Mexico, China Over 70% in Baja California Education, Health, Environment, Community Development; Economic Development and Culture & the Arts. Sister Foundation: Fundación Internacional de la Comunidad (FIC)—Baja’s only C.F.

The role of ICF: Assists family foundations, community foundations, corporations and individual donors with international giving; Follow up to make an overseas grant tax deductible; Provides research support for donors giving opportunities and community based needs Through its work with donors, ICF is seeking to dramatically increase the level of charitable giving to Baja California

Give2Baja Campaign Objective: Help non profits in Baja by expanding charitable giving among donors in Southern California and beyond Planned Activities: Release of Needs Assessment & NGO Profile (April 2003) On-going Donor Education & Outreach Targeted sister city outreach Periodic donor site visits

ICF Traditional Donor Advised Grantmaking Process 1. Donor identifies interest or need they would like to fund 2. ICF undertakes due diligence on project and/or NGO(s) in question 3. ICF requests a grant proposal from NGO 4. Donor reviews and makes funding decision 5. Grant is made 6. ICF/donor receives final project report within 12 month period Funding may or may not be multi-year

Limitations to Existing Grantmaking Model Donor relationship is arms length and limited to financial support; Majority of grants are one time and project based; Limited operational support Accountability limited to project report and budgetary accounting. Limited or no performance metrics

Venture Philanthropy: A new way of making a difference Applying venture capital practices to the non profit sector; Donor/Investors are not making grants, they’re making investments with measured outcomes over time.

Venture Philanthropy Model Investments in long-term (3-6 year) NGO business plans; A managing partner relationship; An accountability-for-results process; Performance Metrics/Outcome measures Provision of cash and expertise; and An exit strategy.

Venture Philanthropy: Ways to Invest “Invest" in the organizational development of NGOs to help them "scale up." Invest in the business/enterprise activities of NGOs to help them generate income to become more financially sustainable. Invest in "social innovators," i.e., NGOs that are addressing a critical social problem in a particularly innovative way.

Social Venture Partners (SVP)— A Community of Social Investors Social Venture Partners (SVP) was the inspiration of former Aldus Corporation President Paul Brainerd. SVP is a non-profit, volunteer-driven movement dedicated to addressing social issues in their given community’ Donor Partners in each community are professionals looking for a way to invest their time, skills and resources in their community Each Donor Partner commits to a minimum annual contribution of $5,000 for at least two years SVP links community professionals and nonprofit organizations to make a hands-on difference. There are now 22 existing SVP affiliates and 11 in formation Locally, San Diego SVP has been established

Experience that SVP Investors Bring to the table Organizational development & governance Finance HR Business Development Information Technology (web, ecommerce) Marketing and Media Strategic Planning (methodology for performance measurements) Other

Case Study: San Diego SVP Established as a donor advised fund at TSDF; Focus is in social investing in San Diego area for benefit of local NGOs In existence 3 years 55 Partners An expanded group of “Friends of SD-SVP” Investment Focus: Improving quality of life; 2002: Financial Literacy and Low Income Has completed 2 investment cycles (4 grantees to date)

Baja Social Venture Partners Apply SVP model with a singular Baja California focus; Two funding areas: border region (Baja Norte) and Baja Sur/Sea of Cortez; Encourage investment in Baja based NGOs that are social innovators Encourage investment of U.S. and Mexican Partners US side: donor advised fund at ICF Mexican side: fund at FIC Investment criteria based on review and selection of submitted business plans Potential medium term opportunities for collaboration with SD-SVP on projects having a cross-border impact

Baja SVP Partners Goals & Objectives 12 Partner/Investors by December 2003; 20 Partner/Investors by June 2004 First Investment Cycle: Summer 2004

Potential projects with a high social impact Community empowerment in comunidades populares with a focus on land tenure and community beautification; Youth programs for children/youth in Baja California's colonias populares; Educational enrichment Cost effective after school programs (arts, science & technology, music, sports) for primary and secondary public schools. Micro-enterprise credit support to indigenous community based arts and craft or medicinal plant business for re-sale in Mexico and/or the United States. Eco-tourism initiative to empower area local fishermen, ejidos and indigenous communities to find a sustainable income stream.

Making the Case for Venture Philanthropy in Baja California Will infuse concept of “social entrepreneurship” in Baja California; Promote greater accountability among regional NGOs with focus on performance measures Provide a meaningful and lasting way for U.S. and Mexican donors to give to Baja area NGOs Will stimulate charitable giving and volunteerism among Baja California’s professional class as well as those Californians with an active interest and/or presence in Baja.

Next Steps Invest $5,000 annually over 2 years Either individually, as a couple (Partner Pair) or as a company Get to know Baja Get involved Join a Working Group to build and manage Baja-SVP's internal infrastructure. communications, partner recruiting, partner education, governance and finance. Serve on the IWG (Investment Working Group) to assess investment focus areas and select new investees Joining a Volunteer Team (V-team) to work directly with an investee.

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