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Science Careers Blog

June 8, 2007

A New Model for Philanthropy

The 1 June issue of Forbes magazine reports on "The New Activist Givers," who, according to the article, are changing the way private foundations interact with their funding recipients (hat-tip: Philanthropy News Digest). This new breed of donor, many of whom made their money in the Internet boom of the 1990s, gets involved with funding recipients in much the same way that venture capitalists get involved with their investments.

The article tells about software entrepreneur Mario Marino, who put $9 million of his own money into Venture Philanthropy Partners. VPP gives money mainly to inner-city educational and health-care projects. Its due-diligence approach includes "top-to-bottom reviews of the handpicked charity, identification of expansion opportunities and management goals, and clear targets backed by quarterly reviews to ensure benchmarks are getting hit."

This merger of hands-on venture capitalism with philanthropy is spreading to scientific research funding as well. In Science Careers this week, "Opportunities" columnist Peter Fiske talks with entrepreneur Avi Spier about the partnership between his company, Allon Therapeutics, and the Institute for the Study of Aging (ISOA). In their arrangement, ISOA provided early funding to the company, and with that support Allon Therapeutics developed promising new treatments for Alzheimer's disease.

But ISOA didn't just write a check. Spier reports that ISOA "acted as a venture investor, which meant that Allon had to make a strong business case for realizing clinical and commercial success. The institute put the company's business plan and supporting documents through more extensive review and due diligence than typical VC deals." Spier says that other philanthropies are beginning to use this more activist approach, including the Cystic Fibrosis Foundation, the Juvenile Diabetes Research Foundation, and the Bill and Melinda Gates Foundation.

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