The following article was published on January 3rd, 2017 by Staff Reporter Andrew Medici, WASHINGTON BUSINESS JOURNAL - The Global Good Fund wants to invest tens of millions of dollars into startups and entrepreneurs looking to make the world a better place. But to begin, it's starting small.
The D.C.-based nonprofit, which offers in-depth training and mentoring to a select few social impact entrepreneurs from around the world every year, has put the finishing touches on a $400,000 pilot fund to invest in up to four companies. Two have already been identified, although officials declined to name them until the deals are finalized. The organization is raising an additional $100,000 for the pilot fund, which would bring the total to $500,000.
If the pilot is successful, the new Global Impact Fund — which is run as a separate and legally distinct for-profit entity that will co-exist with the original nonprofit — would grow to at least $50 million, CEO Carrie Rich told me.
Social impact investing is the practice of putting money into companies not just for a return, but to help communities instead of donating the money to a nonprofit. By encouraging specific companies and outcomes, investors would improve the world through their investments.
What types of companies provide positive social impact? The Global Good Fund's 2016 fellows include Danny Bin, who started mobile financial security platform Monk, which encourages social circles to save, borrow and lend money as a group. Leah Filler is a founder of Lava Mae, a mobile shower service for the homeless in San Francisco that repurposes retired transportation buses into bathrooms on wheels.
"There is no doubt that the future of investing includes impact investing," Rich said. "Private equity in the '90s is reflecting what impact investing today is starting at."
The new fund represents a major step for the mentoring and social impact-driven nonprofit founded in 2012. So far the organization has relied on a mix of donations and the sale of its proprietary leadership training and analysis tools. But the new fund would allow the nonprofit to draw management fees in exchange for access to the thousands of startups, entrepreneurs and companies that apply to its fellowship program every year. The push is part of organization’s plan to get 50 percent of its operating budget through earned revenue as opposed to consisting solely on donations. The impact fund would be a part of that, along with the leadership training products it sells.
The fund began as a $100 check from Inova Health System CEO Knox Singleton to Rich in lieu of taking her out to lunch for her birthday (she worked at Inova at the time). He challenged her to see what she could do with the money, so Rich asked six nonprofits what they could do with $1,000 each and then sent out an email to her contact list to solicit donations.
What she got was just above $6,000 — and then a surprise donation for $1 million for her to start The Global Good Fund. Singleton then matched that initial $1 million and the organization began to grow by leaps and bounds.
Along the way, Rich put together a board of advisers and directors (with help from Singleton) that reads like a laundry list of high-powered CEOs and executives. It includes Singleton, Valhalla General Partner Hooks Johnston, Jeremiah Buckley of BuckleySandler LLP, EY executive Marc Andersen, Johnson & Johnson Vice President Michael Sneed, Northrop Grumman Corp. CEO Wes Bush, BET co-founder Sheila Johnson and others.
Here’s what the Global Good Fund does: Every year it gets about 2,400 applications for 12 slots. The applicants — all of whom need to be working to make the world a better place — are rigorously screened and their leadership skills analyzed to see if they are a good fit. They are matched with a CEO or other Csuite executive who provides mentoring and given a $10,000 budget to pay for training, consulting or anything that could help them grow their idea or business.
There is also leadership coaching, goal setting and monitoring, and an annual gala in April.
In July, the fund announced it had received a $2.2 million grant from The Diana Davis Spencer Foundation that will be used in part to create a new and separate fellowship program for social entrepreneurs over 50 years old.
-Andrew Medici, Staff Reporter, The Washington Businessness Journal, January 3rd, 2017