Welcome to Quick Takes, four questions for movers and shakers who are part of the incredible team working to eliminate poverty in the District of Columbia! Today we are talking with Greg Cork, Executive Director at the Lever Fund, one of the newest startup shops on the block in social justice to learn more about their model and thoughts on what it will take to move the needle on poverty in DC. Five quick questions, one great changemaker, and a whole lot of impact!
The Pitch: What’s your secret sauce? What sets you apart?
We’re all about social entrepreneurship—the application of sound business principles in service to social change—while of course always motivated and informed by heart and a belief in the social compact. In our startup phase, we’re emphasizing support for education, training, and workforce development initiatives to demonstrate the efficacy of our model to a growing network of savvy investors who want to see results in our region. The Lever Fund is distinguished from business as usual in the nonprofit investment sector in many ways, but I think four key factors set us apart:
- Our genuine commitment to measurement and investor ROI (e., impact): We’re laser-focused on a metrics-driven investment strategy as the only way to engender real change. Thanks in large part to the groundbreaking work done by the Robin Hood Foundation around the concept of “relentless monetization” (and the really smart folks there) –we now have nonprofit impact measurement down to a science. The Lever Fund augments this approach by conducting an up-front due diligence process of the nonprofit sector and then applying our signature rigorous measurement framework. This helps us determine the best candidates for social change in the region—our investees.
- Our emphasis on ensuring that those who support our work are informed investors: We value (and aspire to) transparent and honest reporting to our investors about our impact and the challenges of tackling poverty on the ground. We want to demonstrate proof of impact and our ROI in clear, reliable ways even while we support our nonprofit investees by providing patient support and partnership. We’re conscious that the nonprofits we fund—like any other businesses—might hit some bumps on the way to perfecting their models, attaining sustainability, and meeting their goals, so we want to be respectful and supportive of our investees as we share data about their impact. We’ll thread this needle in a way that meets the needs of both our investors and our investees.
- Our commitment to making things easier on high-performance nonprofits seeking financial support—not harder: After 12 years of running nonprofits, I definitely feel the pain of leaders who constantly are scrambling after money—and devoting way too many of their very limited resources to fundraising and to convincing funders they’re worthy of investment. That’s one of the reasons I love The Lever Fund: We do the homework for our investees through our due diligence process and through the application of a Robin Hood-type measurement methodology. We don’t want to make our investees feel like we’re doing them a favor by considering them for funding; we don’t make them jump through a bunch of hoops, and we’re not looking to shake them upside down and be intrusive by telling them how to run their businesses. The very reason we’ll partner with the nonprofits we invest in is that they’ve demonstrated that they have a great financial model and leadership and are well-positioned for impact. We want to shift the burden from impact reporting to impact partnership in ways that gives our investees the latitude to be innovative and maybe even make some mistakes along the path toward big impact.
- Our emphasis on cultivating a new kind of philanthropic investor: The Lever Fund aims to engage a new kind of philanthropic investor in fighting poverty in the DMV—the investor who values innovation, entrepreneurship, and an authentic evaluation of the impact of nonprofit ventures. Reflecting a burgeoning culture of innovation and entrepreneurship, the DMV consistently ranks among the top five regions in the nation for startup companies—especially in the tech sector—and currently is ranked number one in startups per capita. This yields a population of entrepreneurs outfitted with the business savvy and financial wherewithal critical to tackling the DMV’s most persistent social challenges. So in our fight against poverty, we want to attract and support the development of new investors who are weary of business as usual in the nonprofit sector; who recognize the need for the application of metrics and sound business principles in service to social change; and who demand results. We want investors to expect a lot from our investees and from us.
The Horizon: What’s the biggest challenge that you are tackling that no one is talking about now? If you are successful what will DC look like in five years?
Our region boasts some of the greatest wealth and capacity in the world—yet more than 400,000 of our neighbors live in poverty, and over one million endure lives of chronic financial instability. DC’s poor families are among the poorest in major US cities—even while the wealth of more fortunate residents continues to grow. So while many are talking about how things are getting better, they’re really only talking about how things are getting better for more privileged folks.
In order to meet this challenge—and here’s the challenge in meeting the challenge—we need to change how nonprofit funding is done. Too many funders are using misleading metrics—like, say, “overhead” rather than impact—to pick and choose the best philanthropic bets. Philanthropic investors too often simply aren’t informed about the true potential, performance, stability, and sustainability of nonprofits. The line between for-profit and nonprofit enterprises is dissolving—and we need to shift from the “charity” mindset and start looking at nonprofits as businesses like any other and to evaluate them as such. It’s just that the ROI is going to be positive and sustainable societal change rather than a piece of an IPO or an eventual stock dividend or capital gain. This among a host of reasons is why we’re looking to attract and cultivate and engage the savvy, business-minded philanthropic investor.
If we have it our way, in five years a considerable share of the DMV population will be looking at nonprofits and nonprofit funding differently—recognizing the value of data and measurement and ROI/impact—and demanding results. By virtue of our work, more people will recognize and own the indisputable reality that there’s a broader economic value of lifting folks out of poverty. There are mountains of data supporting this notion—for example, data demonstrating the happy economic consequences, once people gain financial stability, of a broadened tax base and more disposable income to spend on goods and services. It’s axiomatic that people with more education and more resources—and relieved of the horrors of hunger and homelessness—are more likely to find and maintain meaningful employment and generally to live happier and more productive lives. The poor health, general deprivation, and frequent incarceration of low-income citizens are costly to the greater society. An educated, better-resourced person is far less likely to be hungry, to be homeless, to be unhealthy (while being without healthcare), to have children before they’re ready to be a parent, to commit a violent crime or to be the victim of one—and therefore is better positioned to contribute to the economy rather than to compromise it.
Mission Possible: What gives you hope that ending poverty in DC is possible?
No one can argue that poverty in our region has stubbornly persisted and actually grown—despite the determined efforts of many well-intentioned individuals and organizations. The root causes of poverty are multi-faceted and complex: sub-par education, too little education/training for too few well-paying jobs, homelessness, hunger, crime, and a polluted environment. I think that these problems persist not because people don’t care or aren’t working hard to solve them but because the efforts to end them too often are neither efficient nor effective, especially in the eyes of philanthropy. Also, and important: In the wake of the Great Recession, the institutional nonprofit funding terrain has shifted and shrunken dramatically—especially in the DMV. For example, some institutional funders, having seen only marginal dollars-to-results impact in the DMV and given their diminished resources, are looking away from home and toward international geographies; they figure (understandably, really) that they at least can keep people alive by, say, funding vaccines—rather than continuing to spend money trying to fix public schools but seeing at best only incremental progress. And some institutional funders, either out of money or just weary, are shuttering altogether.
The Lever Fund has no illusions about completely “ending” poverty in the DMV. But in partnering with community-minded others, we want to do two things: (1) demonstrate the power of a metrics-based, ROI-oriented, impact-demanding approach to fighting poverty; and (2) force questions about how nonprofits are and should be running their businesses and how our community is and should be making philanthropic investment decisions. We’ve witnessed the huge strides made in New York City, the California Bay Area, and Chicago through the application of metrics-based social entrepreneurship principles by Robin Hood, Tipping Point, and A Better Chicago in their respective regions. The Lever Fund wants to be a part of this increasingly successful effort by customizing these principles and practices to the unique needs of the DMV. We want both to force the question and to be part of the answer to that question—in time, a big part of the answer. And hopefully, others will follow suit as our efforts gain traction. We claim no corner on the nonprofit investment market; we just want to invest wisely—and to encourage others to do the same.
Innovation Engine: Where do you draw inspiration from?
All of us at the Lever Fund are motivated by justice and fairness, and a visceral sense of duty to our community and to the larger social compact. We value humans and what humans can do together. We’re inspired by a number of high-performance DMV nonprofits that have top-flight financial models and leadership and are well-positioned for real impact. We recently announced that we’ll be making our first round of “demonstration” (inaugural) investments in June, and that we’ll “officially” name our first investees in May following a series of Lever Fund Board-hosted kickoff events in April and May.
As to me personally? I’ve been heavily influenced and motivated by some truly visionary social change leaders—like J.B. Schramm, the founder of College Summit, where I had my first nonprofit job and where I first tasted (and then guzzled) the social entrepreneurship Kool-Aid. I learned there about letting talent shine and identifying the power and potential in people despite their backgrounds and circumstances. On that note, one of my heroes is Dan Pallotta; anyone who’s interested in social change needs to watch his TED Talk, “The way we think about charity is dead wrong.” And on business theory—especially as it might apply to the nonprofit sector—I’m a big fan of Jim Collins (Built to Last, Good to Great) and also of Verne Harnish (Scaling Up).
Locally, I’m inspired by Capital Partners for Education, a fantastic organization where I’ve seen the power of leadership and results. CPE’s Executive Director, Khari Brown, is one of the finest people I know—and sort of a nonprofit rarity in that he’s been at the helm of CPE for 15 years and the organization has just killed it on his watch. I’m inspired just as much by people who have benefited from the nonprofit work I’ve been involved with—like the high school guy I mentor (through CPE) who has faced more than his share of challenges and yet is on his way to a very promising adult life. Sharing in his life experiences and witnessing his growth have shaped my worldview in ways I’d not imagined when I took on my mentoring role. Also, I lost both of my parents very early in my life—but had some amazing people step in to support me and just care. I think this made me realize firsthand that the social compact is real, that we all need support—not handouts, not old-fashioned “charity,” just someone who will offer respectful guidance and help us tap our potential and realize our true, better selves.
And above all, I’m motivated by my two daughters. They’re spectacular young women, and they deserve a dad who values authenticity and connection, and who lives the values he’s trying to impart to and cultivate in them.