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New Profit, New Hope

New Profit, New HopeThrough her company New Profit, Tufts graduate Vanessa Kirsch is giving nonprofits the power to produce social change.

Medford/Somerville, Mass. [03.14.06] In the late 1990s, when the dot-com era boomed and venture capital flowed freely to online entrepreneurs, Tufts graduate Vanessa Kirsch had an interesting idea. If venture capital was being used to further growth in the for-profit sector, why couldn’t it be used to achieve the same result in the nonprofit world? Less than a decade later, Kirsch is proving that it can.

“She is forging a new concept in philanthropy — venture capital for social entrepreneurs,” the Boston Herald reported about Kirsch, founder of New Profit, a company that gives nonprofits the financial resources and strategic support they need to grow.

New Profit, based in Cambridge, Mass., has a $25 million fund of 55 investors. Per nonprofit, the company invests around $1 million in cash and $1 million in consulting over four years. So far, its 14 nonprofits, mostly in the education and youth fields, are flourishing, according to the newspaper.

“Our organizations are growing on average 30 percent a year whereas the average nonprofit is growing at four percent,” Kirsch told the newspaper.

Jumpstart, a Boston-based organization that tutors preschool children, is one such example. The nonprofit started out in four communities and, with New Profit’s help, now reaches more than 70, the Herald reported.

With a proven track record of success, New Profit is now interested in growing itself, according to the Herald. The company is seeking a second $30 million fund, the newspaper reported, to broaden its reach to areas outside of Boston, New York and Washington, D.C.

“We’ll also be working with more donors nationwide and we’re spending time as well on convening social entrepreneur leaders to mobilize social entrepreneurship as a concept,” Kirsch told the Herald.

Kirsch, who described herself to the Herald as a “tenacious” activist, earned a degree in history from Tufts in 1987. Since her time at Tufts when she was chair of the Massachusetts Student Public Interest Research Group (MassPIRG), a student senator and student representative to the Board of Trustees, Kirsch has been committed to solving social problems.

“I think when people get engaged at an early age, activism becomes a part of them,” Kirsch, who is a member of the University College Board of Overseers, told the Herald. “I got to experiment with a lot of leadership opportunities, and people [mentored me] in incredible ways.”

Post-Tufts, Kirsch started two organizations: the Women’s Information Network, a group for young Democratic women, and Public Allies, an organization that advances diverse young leaders to strengthen communities, nonprofits and civic participation. The concept for New Profit was born of her work with Public Allies.

Her goal now is to encourage philanthropists to spend a small percentage of their money “as thoughtfully on venture funding as when diversifying a traditional investment portfolio,” according to the newspaper. “That’s the only way we’re ever going to drive a truly entrepreneurial system in the nonprofit sector,” she added.

And Kirsch is confident that her mission can be accomplished.

“I’m so inspired by what we’ve seen occur in this field in the last seven years,” she said, “that, if we’ve made this much progress already, I can’t wait to see what the next 10 years will bring.”



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