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May 10, 2001
Entrepreneurs Foundation Starts Up Community Service
    by Mark Thomsen

Innovative organization taps the resources of the entrepreneurial sector to strengthen communities.


Start-up companies often evoke an image of a group of dedicated people with their noses fast to the grindstone, completely focused on cranking up the revenue of the new firm. Entrepreneurs Foundation (EF), a San Francisco-based organization, is working to expand that image a bit, prodding entrepreneurial firms to make community involvement and service a core value early in the company's development.

EF's approach is two-pronged. It enlists pre-public, venture-backed companies and helps them to develop a culture of community involvement within the firm and among employees. EF also targets non-profits in the Bay Area that, through innovative ideas and programs, have been successful on a small scale.

"Underlying EF's Venture Philanthropy program is a vision of creating a model for developing high-performing non-profit organizations," said Bob Miller, CEO of the Entrepreneurs Foundation. "Just as the venture capital community invests in technology entrepreneurs, EF invests in social entrepreneurs by providing financial resources, managerial advice, active board participation and professional expertise."

EF's current community investments total approximately $1.2 million. The three organizations it has invested in include Partners in School Innovation, OpNet and City Year San Jose/Silicon Valley. Partners in School Innovation is an elementary school reform organization that works with public schools in low-income communities. OpNet provides computer job training and internship programs for under-employed individuals between the ages of 18 and 25, and City Year is a national service organization that unites diverse young leaders for a challenging year of full-time service, leadership development and civic engagement in low-income areas.

EF works with each organization and their various stakeholders to develop a business plan that includes well-defined metrics and outcomes. Additional funding is contingent on the performance of EF's investment, measured by how well business plan objectives were achieved.

So far 74 start-ups have made a commitment to social responsibility by joining EF. Each company makes a small pre-IPO equity donation, typically $100,000, to the foundation. Of that donation, 50 percent is earmarked for a company-directed community fund, 35 percent for EF's venture philanthropy investments, and 15 percent to support the corporate community involvement services that EF provides to the companies and foundation operations.

Companies joining EF also commit employee volunteer time. In 2000, more than 6,200 employees from EF's participating companies volunteered time with 85 Bay Area community organizations.

"An interesting thing that we have discovered in working with our current three investments is that intellectual capital is as important as financial capital in bringing a non-profit organization to scale, said Miller. "We now have a five-person team that combines experiences in venture capital, entrepreneurship, general management, marketing and organizational development."

EF is the brainchild of Gib Myers, a 27-year veteran of the Silicon Valley venture capital firm Mayfield Fund. Since being started in 1998, the foundation has already established a national affiliates program with organizations that have adopted its model in Austin, Dallas, Boston and Atlanta.

Miller is optimistic about EF's impact in the future. "Our vision is to have thousands of companies in the Bay Area and across the nation engaged in strengthening the local community with tens of thousands of employees volunteering their time in non-profit organizations." Considering the success it has achieved in just three years, EF seems to be a venture well worth backing.

 

 
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