With Constellation Fund, Andrew Dayton launches new data-driven philanthropy

Andrew Dayton, the youngest son of Gov. Mark Dayton, has launched a new data-driven philanthropy in the Twin Cities, inspired by innovative efforts to combat poverty in California and New York.

The Constellation Fund will award grants to charities and organizations fighting poverty that show their effectiveness through data and research. It will also help charities measure their program results with cost-benefit analysis and other data tools.

"It's the idea of the head and the heart," Andrew Dayton said. "How do you bring all the information, all the smarts that we have in philanthropy and bring that alongside all the great intentions we have as donors and as a community?"

Dayton, 35, will serve as CEO but he said he won't take a salary. He has committed $1 million of his own money to start the fund.

The fund has filed for nonprofit status with the state of Minnesota and the IRS. Its staff is in talks with 15 nonprofits and anticipates making its first round of grants, totaling several hundred thousand dollars, in early 2019.

"The goal is to open this up more broadly in the near future," Dayton said. "We will be looking at any type of poverty-fighting organization from housing to jobs to education to health."

Constellation Fund's governing board is composed of heavyweights in the Twin Cities corporate and philanthropic scene. It includes Stephen Hemsley, retired UnitedHealth Group CEO; Susan Bass Roberts, Pohlad Family Foundation executive director and vice president; Marcia Page, co-founder and executive chairwoman of Minneapolis investment firm Värde Partners; and Dayton's brother, Eric Dayton, CEO of North Corp.

"What excited me about Constellation Fund is this data-driven approach," Bass Roberts said, noting members of the Pohlad family agreed. "It's really important to find out what is working and support that."

Andrew Dayton said he is modeling the fund after a pair of data-driven philanthropies: Robin Hood in New York City, and Tipping Point Community in San Francisco, where he lived and served as deputy legislative director to former San Francisco Mayor Edwin Lee.

In San Francisco, Dayton said he witnessed the growing disparities and rampant homelessness that accompanied the region's economic growth and worried it was a glimpse into the Twin Cities' future.

"We are in a position now to get out in front of these issues and be smarter and more proactive" in the Twin Cities, he said.

Dayton said Constellation Fund will complement other poverty-fighting efforts and means to be "thoughtfully disruptive and to bring new ideas and really try to use all the information available."

But it won't use data to the exclusion of all other factors, said Dayton.

"You don't want to lose the heart because that is what powers people to be generous," he said.

The fund's board members will pay all administrative costs so that "every dollar we raise will go into the community," Dayton said. The fund will not maintain an endowment; donations will go to charities and organizations fighting poverty, he said.

Constellation is hiring and reaching out to economists and researchers to guide the work, including experts at the nonprofit Wilder Research, the Federal Reserve Bank of Minneapolis and the University of Minnesota's Humphrey School of Public Affairs.

The Federal Reserve started the Opportunity and Inclusive Growth Institute about two years ago to research and seek solutions to economic disparities. That dovetails with the Constellation Fund's mission.

"It seemed like a logical partnership for us," said Neel Kashkari, president of the Federal Reserve Bank of Minneapolis.

The Constellation Fund builds on a family legacy of philanthropy. Andrew Dayton's mother, Alida Rockefeller Messinger, is a philanthropist and the youngest daughter of John D. Rockefeller III.

His grandfather Bruce Dayton was an arts patron and CEO of Dayton Hudson Corp. — now Target Corp. The company has given 5 percent of its profits to the community since 1946.

Andrew Dayton, who was born and raised in Minnesota, said he grew up watching his parents give back and serve the community.

After earning a bachelor's degree in history from Yale and a law degree from the University of Michigan, he and his brother started North Corp., the umbrella company that includes the Bachelor Farmer restaurant, Marvel Bar and a clothing store in the North Loop.

Dayton moved to San Francisco in 2015 to oversee the factory where some of the men's clothing is made. That's where he met leaders from Tipping Point and eventually joined the mayor's staff.

He moved back to Minnesota in August 2017 and sits on the board of the Minneapolis Foundation, which is also focusing more on using data to set funding priorities. Dayton said he's not eyeing public office.

"My sole focus is on building this organization," he said. "I have no plans for any public office at this point."

Shannon Prather • 612-673-4804