have reaped the benefits of capitalism and believe that it can be applied in the service of charity.28 In the
past, the rich endowed their estates upon passing. Now not only do they want to give their money away
while living, but want to play an active role in doing so. Drawing on their success in business, new
economy philanthropists apply market principles to their philanthropic efforts and view grant-making
through a venture capitalist lens. They treat charity as "social investment" for which they expect to
realize a measured social return (and often a financial return) and thus have been dubbed "venture
philanthropists."
The venture philanthropy adapts the six tenets of venture capitalism: high funder engagement; multiyear
funding; risk-return analysis and risk management; exit strategies; capacity building of the funded
institution and measurable performance results (social and financial retuns). The first venture
philanthropy fund is attributed to the Robin Hood Foundation in New York City and was founded in
1988, yet venture philanthropy as a funding approach was not popularized until the late 1990s. Between
1998 and 2000 a groundswell of new venture philanthropy funds were endowed; several then folded in
early 2000-2001 when economic contractions reduced their asset base. There was also a settling period
when funds and foundations built their own internal capacity to deliver grants using an investor or
venture philanthropist approach. In the early years, language broadened to include terms like, "strategic
funder," "engaged philanthropist," "social investor," "social angel," and "philanthropreneur." By the
mid-2000s venture philanthropy funds and foundations using the approach become an ingrained part
of the funding landscape and it become resoundingly clear that the culture of philanthropy was
changing forever