GreenLight Fund’s Plan for New Nonprofits Raises Questions from Local Groups

The GreenLight Fund announced last week that it will bring two existing nonprofits into Philadelphia in the near future, but some stakeholders are questioning whether the plan will benefit the city.

GreenLight identifies “innovative, high-performing” nonprofits and helps them expand into a community in need of their services. Thanks to a recent $2 million federal grant, Philadelphia is next on the list.

But the announcement raised questions for some members of Philadelphia’s nonprofit community. Ashley Tobin, owner of Work Better Consulting, wonders whether the city would be better served by an investment in existing nonprofits. “Who says those existing agencies don’t just need more resources to have better outcomes?” she asked.

“It’s a good question,” said Matt Joyce, executive director of GreenLight’s Philadelphia operation. “It’s certainly one that we’ve heard a lot […] in the first several months of being in Philadelphia.”

“Our model [of handpicking and expanding nonprofits] recognizes that there are outstanding organizations operating across the country,” he said. It’s important to be “open to innovation that’s happening in other cities that may be relevant to some of the issues here.”

But even GreenLight doesn’t know which issues it will tackle yet. The selection process is two-fold, Joyce explained. They first met with community leaders to learn about the city’s needs, and received a broad range of suggestions. For example, some are hoping for a nonprofit that can improve access to higher education; others want a program that helps children who have aged out of foster care. After identifying areas of need, GreenLight will then “find organizations that feel like a good fit for Philadelphia and have the culture and capacity to succeed here,” Joyce said.

Partnering with Philly’s Nonprofits

Rather than operating on their own, it is likely that the chosen organizations will need local nonprofit partners. In Boston, for example, GreenLight introduced Single Stop USA, which partnered with local community colleges to help their low-income students find financial resources they need to stay in school.

And GreenLight doesn’t plan on leaving the new nonprofits to fend for themselves in finding these local partners. The relationships with governments and other nonprofits on which many organizations rely “are some of the hardest relationships to build,” Joyce said. “Our role is not only to be a funder but also to help broker and build those relationships at the local level.”

Competing for Local Funds

Tobin, a consultant for nonprofits in the region, also wonders if there is enough money to go around. “There are already so many nonprofit organizations,” she said, and “there’s a limited pool of funding.”

While Tobin said she welcomes innovation, she’s concerned “that bringing new organizations into the fold makes it harder for everyone else to get what they need to be impactful in the community.” Even though the initial funding will be handled by GreenLight, “whenever a new program comes into being, they need funding for years going forward,” she said.

GreenLight, however, says it’s well-aware that when the grant money runs out, these organizations could end up competing for funding against other Philadelphia nonprofits. To prevent an added strain on the pool of available funds, GreenLight plans to help its organizations find alternative funding sources. In previous projects, “the donor base has been largely the entrepreneurial, the venture capital and private equity communities,” Joyce said. The focus will be on sources “that you don’t typically think of as nonprofit funding.”

“We will work with Philadelphia’s community to open up — or strengthen an existing — donor base,” he added.

While Tobin pointed out that those organizations may already be investing elsewhere, “if they’re creating new revenue streams, that’s fantastic,” she said. “More funding is a good thing.”