GreenLight Fund touts 'new form of philanthropy' for the Twin Cities

Local philanthropists, Twin Cities nonprofits and corporations — from the Minnesota Vikings to Cargill — are putting money into a fund that touts "a new form of philanthropy" in the Twin Cities.

The Boston-based GreenLight Fund announced Tuesday it is opening a site in the Twin Cities, its ninth nationwide, after securing $5 million from investors over the next five years to support initiatives and programs that will help low-income families.

Instead of operating like many foundations and funders — taking grant applications from nonprofits and then deciding which to support — the GreenLight Fund will identify issues that Minnesota nonprofits aren't already addressing and look for programs or initiatives deemed successful elsewhere in the U.S. that can be replicated in the Twin Cities.

"We've kind of re-engineered the whole process, which is all starting with: What does the community need?" said John Simon, a Boston venture capitalist who co-founded GreenLight in 2004, adding that the fund is focused on what doesn't yet exist in the community, not duplicating what nonprofits are already doing. "Nobody else is doing anything like that."

Minnesota often tops lists for the state's generosity and has a booming nonprofit sector, with nearly 38,000 nonprofits and the highest number of nonprofit employees in its history. But the state still has wide racial disparities and a record number of homeless people.

That's why there's room for a new approach, said University of St. Thomas President Julie Sullivan, who personally invested in GreenLight with her husband, Bob. She likened GreenLight to a private equity fund investing in social innovations that have been proven to work elsewhere.

"I think sometimes, as we focus on gaps in our own communities, we take an insular approach," Sullivan said. "This combats the insularity that develops in any community. It provides for a way for perhaps new ideas that are working in other places to gain a foothold here."

GreenLight already has sites in Boston, Philadelphia, San Francisco, Detroit, Cincinnati, Atlanta, Charlotte, N.C., and Kansas City, Mo. Simon said he hopes GreenLight has sites in up to 30 cities over the next decade. The fund picked the Twin Cities, he added, because of the community's size, disparities and active civic sector.

In fact, the Twin Cities' 51 investors, who he said each dedicated $50,000 to $500,000 over the next five years, set a record for GreenLight. Investors include Bank of America, Ecolab, HealthPartners, iHeartMedia, Deloitte, Thomson Reuters, the Minnesota Wild, the Bush Foundation and Otto Bremer Trust.

"There's lots of work to be done and we're open to new and innovative approaches," said John Wilgers, CEO of the Greater Twin Cities United Way, another organization that invested in GreenLight. "We very much view their work in partnership with the work we do."

Several local high-profile leaders also invested in GreenLight, including Minnesota Wild owner Craig Leipold and his wife, Helen Johnson-Leipold, an heir to the S.C. Johnson & Son fortune; Hubbard Radio President Virginia Hubbard; Page and Jay Cowles, whose family owned the Star Tribune until 1998; and Andrew Dayton, a philanthropist and son of former Gov. Mark Dayton.

It's "different than anything the nonprofit world really is doing today in the Twin Cities," said Karen Richard, an executive at Andersen Corp., who invested in GreenLight, as did her company's foundation. "I think this augments the work that's happening today. … We're really inspired by the GreenLight Fund coming to the Twin Cities and the possibility of filling some of the gaps that we might have in our community."

The investors' money will pay for hiring an executive director and program associate who will put together an advisory committee of up to 30 volunteers to research which issues, such as affordable housing, to fund starting in 2021. The investors' money will also pay for startup expenses, estimated at up to $800,000 per program, Simon said. Then, he hopes programs will draw on public funding, as has been the case elsewhere.

While public entities are also financially strapped, Sullivan said the group wants a good return on investment on initiatives. The University of St. Thomas, which is also listed as an investor, will have an employee on the GreenLight advisory council, and students could help research innovations elsewhere or volunteer with any future initiative, Sullivan said.

"We're frustrated that, while we have wonderful work going on in our state and in the Twin Cities, we have persistent gaps that remain," Sullivan said. "Let's open our lens a little wider."

Kelly Smith • 612-673-4141