Capital, Equity, and Looking at Nonprofits as Enterprises

"Enterprise capital," the nonprofit equivalent of for-profit equity capital, is what fuels an organization's rise to the next level of performance. Here, the author outlines how these "equity-like" capital grants work.
The F. B. Heron Foundation is an investor "a capital investor" in enterprises where we see opportunity for mutually productive social and financial gain. As is the case with most foundations, our work includes nonprofits but is not exclusive to them: we invest across the spectrum of legal forms of organization, in public and private for-profits, governments, cooperatives, nonprofits, and hybrids. Our approach differs from that of most foundations in that all our investing is done to further our mission-the typical approach being that only grants to nonprofits are mission focused. We look for opportunities to make a positive difference through the power of finance and enterprise, skillfully deployed. Lately, we have been encouraged that a growing number of our foundation colleagues are finding ways to make the powerful combination of financial tools (debt, equity, grants, performance contracts, and more), enterprises (nonprofits, for-profits, and others), and program savvy work together to further their philanthropic agenda.