The Engaged Philanthropy of PSVP

They stand 50 strong, a cadre of smart, sophisticated, financially comfortable entrepreneurs and executives who stand ready to exploit their uncommon success to . . . give their money away. But there's a catch. They come with it.

These latter-day angels not only are donating big chunks to assist at-risk kids throughout the region, but they’re also volunteering their diverse expertise to help their “portfolio” nonprofits firm up infrastructure and sharpen operations.

It’s called “engaged philanthropy,” and it’s the model for Pittsburgh Social Venture Partners (PSVP), one of 25 such entities in the US, Canada and Japan that have pioneered this new approach to community improvement. Pittsburgh’s chapter was founded in 2000. While results in the social services can be difficult to measure, PSVP’s impact appears impressive.

To date, PSVP has provided more than $725,000 in direct financial grants to eight nonprofits serving at-risk kids, which was the focus selected by the approximately 50 partners. Beneficiaries include such organizations as Gwen’s Girls, Child Watch of Pittsburgh, Every Child, Inc., A Child’s Place at Mercy and Big Brothers and Big Sisters of Greater Pittsburgh. Beneficiaries have used PSVP funding to leverage nearly $10 million in additional financing.

Just as significantly, PSVP has given its beneficiaries close to 6,000 hours of hands-on support — all donated by PSVP partners. That professional know-how, contributed by people who understand what it takes to succeed, is the key difference between engaged philanthropy and more traditional giving.

“When I first got involved, my mantra was, ‘This is better than the traditional form,” says John Denny, director of community relations for The Hillman Company who serves as PSVP chairman. “I’ve come to realize it’s not better, it’s just different and needed. Traditional foundations are like banks. They give you a loan only when you already have enough money. Engaged philanthropy is more like angel investing or the venture capital model. We need both. In some ways, we ought to be married to each other.”

More than a Fling
PSVP funding has several other advantages over traditional philanthropy. For one, it’s unrestricted.

“It drives me nuts when I hear a foundation say, ‘We don’t fund operations,’” Denny says. “Maybe there’s a good reason for it, but by the same token, don’t complain that the nonprofit sector has the most untrained workforce you’ve ever seen. Well, no wonder.”

For another, much like a VC group, PSVP sticks by its beneficiaries through multiple funding rounds. In that way, it may be a unique resource.

“Traditional foundations usually give you a one-time grant, and you can’t come back for another four years,” Denny notes. “We go into relationships thinking we’ll be there three to five years, maybe seven years.”

Perhaps the most enduring impact of PSVP is the training it provides for willing philanthropists. It may seem bizarre to think that philanthropists need coaching — Sign the check and mail it in, right? — but in the engaged philanthropy model, they do.

“Our partners learn about the nonprofit sector overall," says Denny, "how it functions, what role it plays in the overall scheme of things, its strengths, its limitations, how business-like it can be, how business-like it cannot be.”

While PSVP itself receives some foundation financing, its grants to social service agencies are funded exclusively by PSVP partners, who make a commitment of $5,000 per year over two years in addition to the time and expertise they provide. (Associate partners, those under 35, contribute $1,000 annually for two years.) And while other foundations are cutting back due to the hits they've taken from the stock market, PSVP is actually increasing funding this year, from $30,000 to $45,000. The reasoning? It's needed now more than ever.

The tech sector has produced a number of partners, but with tech heavy hitters cashing in more slowly these days, PSVP has broadened its partner recruiting.

“There aren’t enough ‘New Economy’ entrepreneurs in Pittsburgh,” Denny says, “and besides, nonprofits need more. They need legal support, accounting help, marketing help, real estate help. So we needed to diversify the partnership to get people with that expertise.”

Meet the Partners
Many partners are recruited by current of former partners. That’s the case with Todd Palcic, 34, vice president of Thar Instruments, who was drawn to PSVP by Thar founder and CEO Lalit Chordia, a former PSVP partner. Palcic, a PSVP board member, serves in a unique partner role — he facilitates the grant application review process. He continues to donate cash to such organizations as Brother’s Brother Foundation but finds the idea of engaged philanthropy particularly appealing.

“Rather than helping out in the soup kitchen by pouring soup,"says Palcic, "what PSVP is asking is a little higher level, less hands-on, so that the kitchen is better organized and stocked, better run and has a bigger impact.

“There’s not a lot of knowledge transfer in some nonprofit organizations, so when employees leave, they take all that knowledge and expertise with them. The organization can’t hire expensive recruiting firms, so that position could be open for nine months. By the time they hire and train people and bring them along, they’re on their way out the door again. We’re transferring our knowledge and insight to social entrepreneurs.”

Palcic’s wife, 28-year-old Dorna Javadi, who owns and operates an optometry practice, signed on as a PSVP partner as well.

“I attended their meetings before I was a member,” she says. “I really enjoy how people care, how they put their time and money into helping people. I wanted to be part of it.”

Partners typically cycle out after about six years, leaving PSVP in a more or less continuous search for fresh partners and pools of grantable funds. Among new initiatives targeting those challenges are:

A “Partner Emeritus Program” through which former or exiting partners contribute $1,000 a year for at least four years. The organization is seeking a corporate partner to match those contributions.

“PSVP Kids.” Here, youngsters in grades three through eight will undertake a seven-month program learning about community needs, then award grants to nonprofits. Parents kick in $200 per participating child — and may be attracted themselves to PSVP.

“I know it sounds like a clothing line at Gap — PSVP Kidswear,” Denny says. “But in essence, we’re using the same model but with kids as the grant makers.”

Denny also foresees the day when his organization becomes more formally affiliated with the Pittsburgh Foundation, a union that could solidify PSVP’s future.

“We’ve been dating now for about six years. I think it’s time we get married,” he says. “I would love to see PSVP be the community’s engaged philanthropy product at the Pittsburgh Foundation.”

Want to know more? Contact PSVP by clicking here.

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Main picture, l to r: John Denny, Dorna Javadi, Todd Palcic.

Photographs copyright Brian Cohen