Harvard Project for Asian and

International Relations
Deloitte Case
Competition

Deloitte Consulting LLP

August 2016
Disclaimer

This case and its solution guideline are intended to be used only as part of Deloitte’s National
Case Competition and should not be used for client and/or industry research. In some cases,
the information herein has been modified for the purposes of the competition.

This case is completely fictional, and the situation discussed is completely hypothetical
and meant for the educational purpose of the case competition only.

The names and logos of companies are trademarked by their respective legal entities, and
their use in this document does not imply any sponsorship herein.
Case Introduction
The Situation

You are a group of newly hired Senior Consultants at Deloitte. It is

10:30 a.m. on Friday morning and you are on your way to the
Deloitte office after tutoring local school children at a Deloitte Impact
Day event.
As you get to the subway, you receive the following message…

Kim Frazier now

Mail Message
Slide to read

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New Profit – Investing in Systemic Change

From: Kim Frazier

Maximizing social impact through strategic portfolio investments

Team,

I just had an interesting call with Vanessa Kirsch, Founder and CEO of New Profit Incorporated, a Boston-based nonprofit venture philanthropy
fund founded in 1998 with a mission to break down the barriers that stand between people and opportunity in America. Their original
“Innovation Fund” was launched to help “catalyze systemic change” in education, early childhood development, economic empowerment, and
public health. Entrepreneurial leaders and organizations in this fund receive $1M over four years in addition to strategic support.
In 2015, New Profit introduced an innovative approach to venture philanthropy with the launch of Focus Funds. Whereas the Innovation Fund
invests in individual organizations across a broad range of social issues, Focus Funds invest in organizations and a network of support around
a particular issue area (e.g., Early Childhood Learning). By bringing together social entrepreneurs, thought leaders, academics, and funders to
affect change on a specific issue, New Profit hopes to break through intractable challenges and develop significant breakthroughs for large-
scale, systemic social issues.
As New Profit looks to expand its footprint and maximize impact, Vanessa has asked Deloitte to help New Profit develop a growth strategy that
addresses the following questions:
• In its next phase of growth, how should New Profit allocate investments between Focus Funds and its Innovation Fund? What
is the optimal portfolio mix to maximize impact while balancing risk? Consider developing a framework to compare each type of
fund that incorporates market trends, investment considerations, and New Profit’s mission and capabilities.

• How should New Profit position each type of fund to attract new investment and align with New Profit’s mission? Consider
developing a brand positioning for each type of fund that highlights the advantages and unique characteristics of New Profit’s investment
model and the proposed investment strategy.
I would like your team to develop a discussion document to answer Vanessa’s questions. Attached is a data pack to support your research
efforts. As always, please specify any assumptions you make in your analysis. Thanks for your help.
Kim

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Contents

Philanthropy Overview 7

Organization Background 13

Innovation Fund Detail 22

Focus Funds Detail 28

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Philanthropy Overview
Philanthropy Overview
Philanthropy is typically characterized by donation of money or time to a cause, largely driven by the desire to
promote or support social good. It can be defined in many ways and there are multiple forms, including volunteering,
donating money to nonprofit organizations, grant making, and individual charitable donations

Contributions Philanthropy Recipients Largest Philanthropic Foundations2

• Total philanthropic contributions for 2014 Contributions by Recipient1

2014 increased 7.1% from 2013 to 2%
$358.4B 4%
3%
5% • Year founded: 2000
• Individuals continue to represent the • Endowment: $41.3B (2015)
32%
bulk of philanthropic contributions: 7%
• Key Program Areas: Global Health, Global
Development, US Program
2014 Contributions by Source1 8%

Corporations
Bequests 12%
5% 15%
• Year founded: 1936
8% 12% • Endowment: $12.3B (2015)
Found-
ations • Key Program Areas: Challenging
15% Religion Education Inequality
Human Services Gifts to Foundations
Health Public Society Benefit
Arts, Culture, and Humanities Internal Affairs
Environment/ Animals Individuals
72% • Year founded: 1953
• Although small in total, contributions to • Endowment: $11.1B (2015)
Individuals
arts, culture, and humanities grew the • Program Areas: Art Institution
fastest, with a 9.2% increase 2013- 2014

Source: 1 Giving USA 2015 Annual Report; 2 Foundation Center and Foundation Websites
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Innovation in Philanthropy
Philanthropic ambitions are growing, and organizations are exploring new ways of
achieving larger impacts

Betting Big Building Networks

• In 2014, the Robert Wood Johnson Foundation redefined • The Rockefeller Foundation drives program impact by
its work around the goal of improving health by improving creating networks that allow members to work together and
healthcare and building a “Culture of Health” learn from each other. The Foundation’s networks include:
− 100 Resilient Cities
• Major philanthropists (e.g., Warren Buffet, Mark
Zuckerberg) have pledged to give most of their fortunes to − Global Resilience Partnership
philanthropic causes, with many adopting a “spend it now”
− Asian Climate Change Resilience Network
mentality to disburse significant investments during
their lifetimes

Sharing Data Diversifying Funding

• Good Ventures, which disbursed $45M in its first three
years, publishes a database of all its grants
• Good Ventures collaborates with GiveWell – a nonprofit that
evaluates nonprofits – to create the Open Philanthropy
Project, which identifies the best ways to improve the world
through philanthropy with transparency and analysis
• Funders are expanding their use of debt financing, equity
investments, and nonfinancial support to drive impact
• Goldman Sachs and Bloomberg Philanthropies backed
the first social impact bond (SIB) in the US; it was canceled in
2015 for failing to meet goals. A bond backed by Goldman
and the J.B. and M.K. Pritzker Family Foundation was the
first US SIB to pay out

Sources: “100 Resilient Cities”, The Rockefeller Foundation. “Asian Cities Climate Change Resilience Network”, The Rockefeller Foundation. “Cari Tuna and Dustin Moskovitz: Young Silicon Valley Billionaires
Pioneer New Approach to Philanthropy”, The New York Times. “Criteria and Summary of Process”, GiveWell. ”Global Resilience Partnership”, The Rockefeller Foundation. “New Money, Big Bets: Three Takeaways
from a Massive Tech Grant to Fight Global Poverty”, Inside Philanthropy. “No Success Like Failure: N.Y. Sees Social Impact Bond Pluses”, The Bond Buyer. “Sean Parker: Philanthropy for Hackers”, The Wall
Street Journal. “Success Metrics Questions in School Program Funded by Goldman”, The New York Times. “The World’s 10 Most Innovative Companies of 2015 in Not-for-Profit”, Fast Company.
9 National Case Competition Copyright © 2015 Deloitte Development LLC. All rights reserved.
The Landscape of Philanthropy
Primary Goal: Primary Goal:
Create Societal Value Create Financial Value

Socially
Revenue Generating
Charities Driven Traditional Business
Social Enterprises
Business

Profit CSR or
Trading Breakeven; Profitable
Grants only, Potentially distributing, company Traditional
revenues & All income surplus
no trading Sustainable socially allocating % Company
grants from trading reinvested
driven to charity

Impact Only Strategy Impact First Strategy Finance First Strategy

Grant making Social Investment

(e.g., Rockefeller (e.g., YMCA)
Foundation)
“Impact Investment”
(e.g., Lundin Foundation)

Venture Philanthropy
(e.g., New Profit)
Venture philanthropy creates social value through a combination of grant making and
social investment (financial and strategic support). In general, this model is best suited to
help impact-based organizations achieve a “step-change” in their operations.

Source: “A guide to venture philanthropy for venture capital and private equity investors,” EVPA.
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Venture Philanthropy Overview
“Venture philanthropy” was coined by John D. Rockefeller in 1969 but began
gaining widespread traction after a Harvard Business Review article in 1997
Defining Characteristics
“Venture philanthropy” can describe a wide variety of funder organization types, goals, and investment approaches, but is generally
characterized by the following traits:

Commitment Funding Support Measurement Networks

Multi-year commitments Unrestricted funding in Funders provide technical Investees are assessed Funders convene networks
with high levels of the form of debt, equity, and management on quantitative of investees and experts to
engagement between or grants expertise and may take measures of outputs, foster innovation and
funders and investees board seats outcomes, and impact improve effectiveness

Current Trends

Personnel Funding Approach Rigor Focus

Nonfinancial support for Funders are increasingly Funders are increasingly using Funders increasingly need
investees is shifting from targeting capital preservation performance measurement to expertise in specific sectors –
volunteers to professional staff and using mechanisms other unlock additional funding 76% of European organizations
and pro bono support than grants specialize

Sources: “European Venture Philanthropy and Social Investment 2013/2014: The EVPA Survey”, European Venture Philanthropy Association. “Virtuous Capital: What
Foundations Can Learn from Venture Capitalists”, Harvard Business Review.
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 Venture Philanthropy Examples
Beyond sharing some basic characteristics, venture philanthropy organizations can
employ varying approaches to fundraising, collaboration, and advocacy

Boston, MA New York, NY New York, NY Redwood City, CA New York, NY

Founded 1999 Founded 1988 Founded 1970 Founded 2004 Founded 2001
Approach • Combines traditional • Focuses on a • Developed • Shifting to a • Accepts small-
venture fund specific “growth capital model of fewer, dollar donations
approach with new metropolitan area aggregation” larger investments from individuals in
network-based (New York City) approach in of $5M - $7M per addition to
“Focus Funds” • Uses 163 metrics which multiple investee foundations and
approach to address assessing co-investors • Publishes thought high-net worth
systemic issues financial, health, make significant leadership articles individuals
• Facilitates and legal impacts (>$1M) to stimulate public • Makes “patient
collaboration to select investments and discussion and capital”
through regular investees payouts are tied spread innovative investments of
convenings to performance approaches $250K to $3M in
• Engages in policy metrics debt or equity with
advocacy through exits in 7-10 years
America Forward
Cumulative
$120M >$2B $807M $872M $88M
Disbursements

Sources: New Profit; organization websites. “EBay Founder's Philanthropic Firm to Donate More”, The Wall Street Journal. “The Robin Hood Foundation Appoints
Reynold Levy As Its President”, PR Newswire.
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Organization Background
New Profit Inc. Overview

New Profit is a national nonprofit venture philanthropy fund with the mission to break down the barriers
that stand between people and opportunity in America. It works with entrepreneurs, philanthropists,
and other partners to upend the status quo and transform the way America educates its children,
propels people towards social and financial stability, and creates healthy communities.

Key Facts Enterprise Goals

Founded in 1998 by CEO Vanessa Kirsch
• Headquartered in Boston, MA with 50+ employees
• ~$150M given to organizations and 10M+ lives impacted
since 2007
• New Profit believes that entrenched systems in United States limit
opportunities for low-income individuals; the opportunity gap can
be closed by social entrepreneurs and their innovative solutions
• Organizational goals fall across three areas:

• 30 investments in current portfolio – Practice: Invest in visionary social entrepreneurs / leaders to

• $1.5B in funding mobilized through public policy advocacy
Program Areas
New Profit supports organizations with transformative
potential across four issues areas:
• Education (15 Investments)
• Early Childhood Development (2 Investments)
• Economic Empowerment (10 investments)
• Public Health (3 investments)
help them scale the impact of their transformative
organizations and drive systemic change
– Policy: Generate resources (i.e., funds, awareness, etc.)
toward solutions that create better social outcomes and more
efficient use of resources
– Public Awareness: Engage philanthropic sector and
broader public to build support for data-focused solutions and
new approaches
• New Profit investments focus on the above goals to different
degrees; many investments may fall across two or three areas

Source: New Profit

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 History of Growth
An idea is born
Meeting bi-weekly for five
months, a team designed an
organization that would
practice venture philanthropy
New Profit’s First Phase
New Profit partnered with Monitor
Group to provide support to
innovative social entrepreneurs
Key Milestones
America Forward is launched
On-Going Investments
New Profit launches America Forward,
which helped drive creation of White
Completed Investments
House Social Innovation Fund

Founding
New Profit was co-
founded in early 1998
New Phase for New Profit Pathways Fund Reimagine Learning Fund
Expands investment and adds new
New Profit’s Pathways Fund is New Profit’s Reimagine Learning
tools to drive large-scale change,
chosen for the first cohort of grantees Fund is launched as the first in a
including policy advocacy
of new Social Innovation Fund new category of “Focus Funds”

1997 1998 1999 - 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Kickstart, Right To Health Leads, iMentor College Possible, Educators 4

Play, BELL, Citizen LIFT Single Stop, Excellence,
Schools, Computers Achievement Youthbuild USA FoodCorps, New
for Youth, Freelancers First, Girls for College Advising Classrooms
Union, Jumpstart, Kids a Change Corps Eye2Eye, ANet
Voting USA
Family Independence
KIPP, MLT Initiative First Place for Youth, The
Rare, Upwardly New Teacher Center, Mission Continues
Global Turnaround for Children Acelero Learning, AVANCE,
Stand for Peace First
Children, Teach
For All, BUILD

Source: New Profit

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New Profit’s Key Financials
New Profit saw a decline in revenue from individuals in 2014 while portfolio
management expenses rose as the Focus Funds were formed

Revenue Expenses
$ in millions $ in millions
Total Funding and Contributions Total Grants and Expenses
$50 $45.6 $50
$0.9
$2.7
$40 $4.6 $40
$5.0 $31.7
$30.5
$30 $26.5 $30 $1.8
$2.7 $2.4
$1.8 $0.4 $2.7 4.2
5.0 $4.6
$20 $20 $7.2
$4.6
$32.4 $8.1
$10 $10
$15.9 $16.1
$11.2
$0 $0
2013 2014 2013 2014
Other In-Kind Services Deloitte In-Kind Services
Deloitte In-Kind Services Field Leadership
Federal Government - Social Innovation Fund Administration, Communication, Fundraising
Corporations and Foundations Portfolio Management
Individuals and Family Foundations Grantmaking

Source: New Profit (2012-2013 and 2014-2015 Annual Reports)

Note: In 2014, “Portfolio Management” expenses were disaggregated into expenses related to the Innovation Fund ($2.8M) and the Focus Funds ($4.4M)
16 National Case Competition Copyright © 2015 Deloitte Development LLC. All rights reserved.
Collaboration with Deloitte
For over 15 years, New Profit and Deloitte have collaborated to provide pro bono
consulting services to a wide range of social ventures

+
Relationship History

In 1999, Monitor Monitor and New Today, the multi-

Vanessa Kirsch
begins relationship Profit expand In 2013, Deloitte million dollar
seeks consulting
with New Profit relationship, acquires Monitor collaboration
services to help
with commitment advising innovative and continues provides pro bono
advise New Profit
of $1M in annual nonprofits such as collaborating with consulting services
social enterprise
pro bono Teach for America New Profit to many high-
organizations
consulting services and KIPP impact nonprofits

Value to New Profit Value to Deloitte

 Provide social entrepreneurs advice on a range of  Allows Deloitte to develop new capabilities that can be
topics, from day-to-day operations to long-term strategy applied to for-profit clients

 Receive pro bono consulting services from top-tier  Gives consultants an opportunity to help innovative
experts to help social ventures grow social service organizations

 Deliver greater social impact by combining skills of  Exposes consultants to integration challenges faced
consultants with social entrepreneurs by general senior managers

Source: New Profit

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New Profit’s Investment Model
Investing and scaling
great entrepreneur-led
organizations
Innovation Fund
• Invests in visionary leaders with
clear potential to drive change at
the systemic level
• Acts as a learning lab that
provides unrestricted multi-year
funding and consulting support to
drive growth and scale
• Provides world-class strategic
support through multi-million dollar
partnership with Deloitte
Accelerator
• Provides capacity-building support
through a cohorted, year-long
program for female leaders of
early-stage social enterprises
• Increases diversity of
entrepreneurs in the field and
builds pipeline of potential future
investees
Funded primarily by High Net
Worth Individuals (HNWIs) and
one National Foundation
Source: New Profit
18 National Case Competition
Funded and supported by
HNWIs, Family Foundations,
National Foundations, and
Corporate Partners
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Building problem
solving ecosystems
Focus Funds
• Enable networks of social
entrepreneurs, funders, New
Profit, and other committed
players to launch disruptive
innovation
• Facilitate dialogue,
collaboration, experimentation
and risk-taking with emerging
solutions to social challenges
Funded by HNWIs, Family
Foundations, and National
Foundations
Leading through culture
change and policy advocacy
Cross sector and public engagement
• Engaging cross-sector problem solvers
about new, high-impact approaches and
building public demand for them
America Forward
• Promotes public policy provisions
through a coalition of 60+ innovative,
impact-oriented organizations
The Gathering of Leaders
• Facilitates networking, collaboration, and
innovation by convening 250 leaders
Investment Funds Overview

Innovation Fund Focus Funds

The New Profit Innovation Fund is a Focus Funds develop and invest in a
traditional fund that invests in individual network (e.g., organizations, academics,
organizations in each of New Profit’s thought leaders, support services) to
areas of focus affect large-scale systemic change

Year Founded 1999 2015

# of Investment Funds 1 5
# of Grantees 13 17
High net worth individuals, family foundations,
Funder Types High net worth individuals, national foundation
national foundations
Mix of unrestricted (e.g., HNWI) and restricted
Funding Type1,2 Unrestricted funds
funds (e.g., typically large foundations)
Grant Type Unrestricted grants Unrestricted grants
Financial support varies; pro bono consulting;
Management Structure $1M over 4 years, pro bono consulting
network of academics, thought leaders, and other
and Support in partnership with Deloitte
New Profit grantee organizations
Unit of Measurement Organization-specific impact Organization and network-level impact

Note: 1Unrestricted: Funds are free from any external restrictions and available for general use. 2Restricted: Funds are restricted by the donor for a designated
purpose or have set conditions applied.
Source: New Profit

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 Selection Process for Investments
New Profit conducts sophisticated due diligence to identify and invest in visionary
leaders who have clear potential to drive change at the systemic level

Funding
Organizations Organizations Due Diligence
Applications
Contacted Screened Conducted
Received

• New Profit connects with
~250 organizations every
year, through its Investment
Referral Network
• Discovery conversations
conducted with high
potential social
entrepreneurs
Source: New Profit
20 National Case Competition
• Letter of Inquiry (LOI) • ~15 candidates selected • New Profit conducts a
process is opened and using a defined deep analysis of an
organizations provide measurement criteria organization’s program
requested information and economic model,
• An analysis is conducted on
strategy, leadership and
• LOIs are scored across each to assess strengths,
overall fit with New Profit
more than 10 dimensions risks, and fit within the within
of New Profit’s Investment the ecosystem
Selection Criteria
• Focus Funds Only: Organizations must align with fund
mission and core principals (see ‘Focus Fund
Selection Criteria’)
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 Types of Fund Investments
New Profit uses two types of investments to help organizations scale their business
and impact

Portfolio Investments Incubation Grants

“Traditional” multi-year investments to support New investments created to support innovation

growth and scale
• Initial Investment of up to $1M over 4 years
• Eligible for renewal upon hitting defined ‘readiness to
scale’ bar (within 4 years)
• New Profit Partner takes a Board seat and meets with
CEO and leadership team at least bi-weekly
• Between $500K and $1M in Deloitte pro bono
consulting available over the life of the investment
• Application requires Letter of Intent plus intensive (~3
months) diligence process
• Requires Co-Funder approval and Board ratification
• Investment of $25-$100K over 1 year
• Eligible for renewal for an additional 1 year
• New Profit senior staff have monthly advisory calls
with grantees
• Application requires brief concept note and 2-3
diligence calls with New Profit staff
• Applications considered in batches twice a year
• Requires approval by Focus Fund Co-Funders; New
Profit Board holds inform rights only

Innovation Fund
Scope

Focus Funds

Source: New Profit

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Innovation Fund
Innovation Fund Details
New Profit’s Innovation fund is one of 6 total funds and encompasses 13 investments
Current Primary
Fund Name Objective
Investments Funders

New Profit • 24 HNWI1

Identify and support the best social problem solvers in America 13
Innovation Fund • 1 Foundation

Early
Seek a world where all children have a start in their earliest years of life that
Learning 2 • 5 Foundations
sets them on a course to fulfill their potential
Fund

Reimagine Transform the way learning happens in America so all students, including
Learning those who may be marginalized or disengaged because of learning and 6 • 3 Foundations
Fund attention or social emotional issues, can achieve academic and life success
Focus Funds

Reimagine
Significantly and rapidly increase the number of high performing schools
School
serving low income students by changing conditions in school districts and 2 • 5 HNWI
Systems their relationships with nonprofit school operators
Fund

• 8 Foundations
Strengthen the bridge between education and workforce development, so
Pathways • 1 Government
that more low-income youth have opportunities to build sustainable 6
Fund Organization
livelihoods
• 1 Merchant Bank

Advance career readiness for low-income students by building and scaling

Learn to • 4 Foundations
collaboration between large employers who need qualified employees and 1 • 2 HNWI
Earn Fund nonprofit organizations working in K-12 and post-secondary education

Source: New Profit

Note: 1) High Net Worth Individual
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Selection Criteria for Innovation Fund
New Profit considers five criteria when selecting an investment
1 • Social Entrepreneur boldly aspires to and articulates a visionary path to connect the
organization’s direct work to solving the systemic cause(s) of the problem
Social • Social Entrepreneur relentlessly attracts high-quality resources (e.g., talent, funding, and
Entrepreneur partnerships) that significantly advance the size, capabilities, and influence of the organization
• Social Entrepreneur integrates data rapidly to courageously make tough choices that drive
organizational performance

2 • Organization addresses an urgent problem of significant scale and breadth with a focus on
improving social mobility in the United States
Direct • Organization has a program model that can be scaled to serve significantly more direct
Impact beneficiaries in a cost-effective way
• Organization shows promising outputs and outcomes and is committed to collecting data that
drives program improvement

3 Systemic • Organization has a compelling and plausible strategy that leverages the direct program model
Impact to change the system driving the core problem

4 Organization • Leadership team, staff, and board of directors are aligned around organization’s mission,
Capacity for strategy, desire for national scale, and need for long-term sustainability
Growth • Organization has a track record of growth and healthy financial management

5 • New Profit’s strategic support capabilities and partnership have the potential to accelerate
New Profit Fit impact and sustainability of the organization
& Value Add • Social Entrepreneur desires a candid, collaborative relationship based on a rigorous exchange
of ideas
Source: New Profit
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Innovation Fund Metrics
Each investee’s performance is monitored using 12 metrics in 4 categories
and evaluated against New Profit’s investment hypothesis
Metrics Description
Financial Support Cumulative financial investment
Investment
Technical / Management Support Average level of nonfinancial support over last 4 months
Leadership
Sustainability
Impact Model
Maturity of organizational capabilities
Economic Model
Organization
Financial Health Strength and stability of financial position
Financial Scalability Degree of demonstrated consistent scalability
Direct Direct impact relative to investee goals
Impact
Systemic Degree of brand recognition or external adoption
Expenses
Growth Run rate and 3-year CAGR
Lives Touched

Overall Investee fit with investment hypothesis based on

Investment Hypothesis
performance

Source: New Profit

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Innovation Fund Metrics - Scorecard
The metrics for each investee are periodically monitored using a scorecard
Illustrative
Investment Sustainability Impact Growth
Financial Sys-
Organizational Capabilities Direct Expenses Lives Touched
Activity Sustainability temic
$M
Level Leader- Impact Econ. Level of 3-yr 3-yr
Org. Health Influence # in MM Reach
ship Model Model Evidence CAGR CAGR
Org 1 1.0 3 3 3 3 2 3 71.4 12% 6%
Org 2 1.0 2 2 1 2 1 1 34.2 6% -5%
Org 3 1.0 3 2 2 2 2 2 1.2 11% 15%
Org 4 1.0 2 3 3 3 1 3 4.0 74% 18%
Org 5 3.5 2 2 2 2 1 1 4.7 26% 44%
Org 6 3.1 4 3 3 4 1 3 8.7 22% 19%
Org 7 6.5 3 3 3 3 2 2 12.0 17% 2%
Org 8 1.0 3 2 2 3 2 3 9.2 35% 49%
Org 9 1.0 2 2 2 2 1 2 42.0 -31% 10%
Org 10 3.5 3 3 2 3 2 1 5.6 16% 5%
Org 11 2.0 2 2 2 2 2 2 3.4 8% 9%
Org 12 5.5 2 3 3 3 2 3 29.2 15% 10%
Org 13 5.5 4 3 3 3 2 2 11.2 6% 2%

Activity Level Capabilities Reach

Level of
(Weekly Avg for prior Financial Sustainability Systemic Influence
4-month period)
Developmental Scale Evidence (# of Lives Touched)

Heavy: 12+ hrs 1 – Absent / Nascent Stable/strong financial 1 - Initial 0 – No brand recognition 1,000 – 9,999
position
Health

or external momentum
Moderate: 5-12 hrs 2 – Moderately Developed Some challenges in 2 – Preliminary 10,000 – 24,999
financial position 1 – Brand recognition or
Light: < 4hrs 3 – Strongly Developed Weak/risky financial 3 – Moderate external momentum 25,000+
position
4 – Fully Developed 4 – Strong 2 – Brand recognition &
external momentum
Risk Indicator
* Risk may be due to challenge 3 – Modest adoption
or uncertainty due to transition
Source: New Profit (as of within a capability area 4 – Widespread adoption
December 2015)
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Innovation Fund Grantee Profiles (Sample)
LIFT Health Leads

• Mission: Help families achieve economic stability and
lift them out of poverty for good
• Social Challenge: 50% of Americans will experience
poverty and 66% of Americans who climb out of
poverty will fall back within 5 years
• Solution: Network of Members, Advocates, and
Advisors who work together to help people find jobs, a
safe home, and a good education
• New Profit Support: Unrestricted multi-year grant
funding of $1.0M; Provided business model strategy
and design support
• Mission: Connect patients with needed resources,
beyond medications, to lead healthy lives
• Social Challenge: Low-income patients are often forced
to choose between paying medical care or paying for food
and rent
• Solution: Health Leads connects these patients to
needed resources via their healthcare provider and Health
Lead Advocates
• New Profit Support: Unrestricted, multi-year grant
funding of $3M+; Provided strategic and financial support
to build compelling business case, leading to 13 of 20
Health Leads hospitals paying for services

Impact of New Profit Support Impact of New Profit Support

Helped LIFT adopt a more holistic model to Health Leads has achieved 5x scale since
support clients and allowed them to touch New Profit’s investment in 2007, and has
11,000+ lives since 2007 touched 15,000+ lives
Source: New Profit
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Focus Funds
Focus Funds Details
New Profit currently has five Focus Funds, encompassing 17 grantee investments
Current Primary
Fund Name Objective
Investments Funders

New Profit • 24 HNWI1

Identify and support the best social problem solvers in America 13
Innovation Fund • 1 Foundation

Early
Seek a world where all children have a start in their earliest years of life that
Learning 2 • 5 Foundations
sets them on a course to fulfill their potential
Fund

Reimagine Transform the way learning happens in America so all students, including
Learning those who may be marginalized or disengaged because of learning and 6 • 3 Foundations
Fund attention or social emotional issues, can achieve academic and life success
Focus Funds

Reimagine
Significantly and rapidly increase the number of high performing schools
School
serving low income students by changing conditions in school districts and 2 • 5 HNWI
Systems their relationships with nonprofit school operators
Fund

• 8 Foundations
Strengthen the bridge between education and workforce development, so
Pathways • 1 Government
that more low-income youth have opportunities to build sustainable 6
Fund Organization
livelihoods
• 1 Merchant Bank

Advance career readiness for low-income students by building and scaling

Learn to • 4 Foundations
collaboration between large employers who need qualified employees and 1 • 2 HNWI
Earn Fund nonprofit organizations working in K-12 and post-secondary education

Note: 1) High Net Worth Individual

Source: New Profit
29 National Case Competition Copyright © 2015 Deloitte Development LLC. All rights reserved.
Selection Criteria for Focus Fund
In addition to the five criteria outlined for the innovation fund, potential focus fund
organizations must also align to each fund’s mission and core principles system
to be considered for investment
Focus Funds
Early Learning Reimagine Reimagine School Learn to Earn
Pathways Fund
Fund Learning Fund Systems Fund Fund
1 Provide All
Overcome the Create Learning Help Low-Income
Fund Communities the Create 10+ Million
Opportunity Gap by Environments to Students Succeed
High-Performing More Career-Ready
Mission Giving Children a Unleash the Potential from Education to
Schools Their Americans
Strong Early Start of All Students Employment
Children Deserve

2 • Establishing • Personalizing • Creating conditions • Providing a set of • Accelerating Hybrid

connections instruction to meet to leverage high comprehensive, Postsecondary
between university- needs from quality nonprofit targeted supports Partnerships,
based early learning different talents (no school operators to for vulnerable, partnering local
practitioners and such thing as manage districts’ high-risk youth support
scale-oriented ‘average’ learners) worst performing getting them to and organizations with
social entrepreneurs • Equally valuing schools through college online innovators to
Core
• Integrating cognitive, social • Supporting nonprofit and into the stimulate field
Principles research-rooted and emotional school operators economic learning and scale
content and skills mainstream proven models
• Convening a
interventions onto • Engaging students community of • Scaling power skills
new vehicles for so they have learning and action development (e.g.,
scale control of their to support the fund’s leadership, critical
learning efforts thinking)

Source: New Profit

30 National Case Competition Copyright © 2015 Deloitte Development LLC. All rights reserved.
Focus Fund Impacts and Associated Metrics
Focus Funds create positive social impact at several levels; Focus Fund
impact and effectiveness is assessed at an investee and fund-level

Individual Community of Organizational Field-Level

Organizations Learning Collaboration Impact

Individual Organizations Community of Learning Org. Collaboration Field-Level

• Scaled, sustainable • Increased connections • Intentional, facilitated, • Improved outcomes from

Impact organizations driving between organizations for strategic collaborations changes in policy,
social impact growth and learning across organizations practice, and culture

Same metrics categories as

Innovation Fund:
Metrics Measurement approach under development
• Investment, Sustainability,
Impact and Growth

Source: New Profit

31 National Case Competition Copyright © 2015 Deloitte Development LLC. All rights reserved.
Focus Fund Metrics – Scorecard
While impact and effectiveness is managed at a fund level, Focus Fund
organizations are also measured at an organizational level
Illustrative

Investment Sustainability Impact Growth

Financial Sys-
Organizational Capabilities Direct Expenses Lives Touched
Activity Sustainability temic
$M
Level Leader- Impact Econ. Level of 3-yr 3-yr
Org. Health Influence # in MM Reach
ship Model Model Evidence CAGR CAGR
FUND A
Org 1 3.0 3 3 3 3 4 3 20.6 36% 29%
Org 2 1.0 3 2 2 2 2 2 1.7 23% 6%
Org 3 1.0 3 2 2 3 2 2 11.3 49% 49%
Org 4 4.0 3 3 3 3 4 3 38.0 21% 19%
Org 5 1.0 2 2 2 2 1 2 1.6 -43% 42%
Org 6 3.0 2 2 2 2 2 2 12.5 7% -19%

FUND B
Org 1 1.0 3 3 3 3 2 3 71.4 11% 6%
Org 2 1.0 2 2 1 2 2 1 4.8 -7% 4%

Activity Level Capabilities Reach

Level of
(Weekly Avg for prior Financial Sustainability Systemic Influence
4-month period)
Developmental Scale Evidence (# of Lives Touched)

Heavy: 12+ hrs 1 – Absent / Nascent Stable/strong financial 1 - Initial 0 – No brand recognition 1,000 – 9,999
position
Health

or external momentum
Moderate: 5-12 hrs 2 – Moderately Developed Some challenges in 2 – Preliminary 10,000 – 24,999
financial position 1 – Brand recognition or
Light: < 4hrs 3 – Strongly Developed Weak/risky financial 3 – Moderate external momentum 25,000 – 99,999
position
4 – Fully Developed 4 – Strong 2 – Brand recognition & 100,000+
external momentum
Risk Indicator
* Risk may be due to challenge 3 – Modest adoption
or uncertainty due to transition
within a capability area 4 – Widespread adoption

Source: New Profit (as of December 2015)

32 National Case Competition Copyright © 2015 Deloitte Development LLC. All rights reserved.
Focus Funds: Early Learning Fund (Sample)
Focus funds are network-based funds that enable social entrepreneurs, funders,
New Profit, and other players to pursue disruptive innovation and catalyze change
Key Actors

Key Thought Partners Organizations Funded Fund Partners

 Bob Pianta, Dean of the Curry  Lego Foundation

School of Education, UVA  Bezos Family Foundation
 Joan Lombardi, Director, Early  Packard Foundation
Opportunities, LLC  Rainwater Charitable Foundation
 Steven Dow, Executive Director,  Julie Fisher Cummings
CAP Tulsa
 Ellen Galinsky, Co-Founder,
Families and Work Institute (FWI)

New Profit

 Secure initial funding and identify business partners

 Provide strategic planning and business model definition for pre-k education organizations to grow
 Provide financial support and access to distribution platforms that allow learning programs to achieve scale
 Facilitate collaboration among stakeholders to drive impact

Impact of New Profit Support

 Funding Raised to Date: $7.6M ($5M raised in anchor funding for inception)
 Solidified fund plan and support network

Source: New Profit

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