Case Study Sector
New Profit, Inc. (NPI) is an innovative venture philanthropy fund. Founded by social entrepreneur Venessa Kirsch, NPI intends to raise large donations from individuals who wish to invest in nonprofit enterprises that could have a significant social impact and the capability to grow to scale. NPI searches and identifies such organizations, provides initial funding, monitors their performance, and then provides additional funding to enable them to become high-impact, nationwide organizations. NPI uses the Balanced Scorecard approach for measuring both its own performance and that of its portfolio companies. The Balanced Scorecard provides the language for the performance contract between NPI and its funders and board, and between NPI and its portfolio organizations.
Learning objective: To describe a new approach for funding nonprofit enterprises, using as an example a venture philanthropy fund that uses private venture capital philosophies and management tools. To illustrate how the Balanced Scorecard can be used in an active governance process to monitor and guide the performance of nonprofit portfolio organizations. Class discussion can focus both on the need for a new approach to sustain funding to nonprofits as well as the role of the Balanced Scorecard in becoming the "financial statement" equivalent for reporting the performance of such enterprises.
- Northern America