Not everything went as planned.

(Illustration by Jim Frazier.)

Morino collected $30 million in donations, but he soon realized that changing nonprofit strategies and improving student reading skills are more difficult than the tasks he was accustomed to assigning as a CEO. Some of the business strategies he tried to import, he admits, were misplaced, like bringing in pro bono consultants from McKinsey & Co. to work alongside his grantees. “It’s intimidating for a social worker or an individual working with children—who has one mission in life—to all of a sudden have a Harvard MBA looking over his shoulder with a spreadsheet,” he says.

First-rate consultants were merely one of the many new elements that venture philanthropists such as Morino introduced during the Internet boom of the 1990s, driven by the belief that traditional charities were not using their resources intelligently enough. But ever since Christine Letts, a professor at Harvard, introduced the term in an article eight years ago, arguing that the entrepreneurs of the tech boom could show charitable funders how to help nonprofits build stronger organizations, venture philanthropy has mutated in many directions.

In the early days, dozens of foundations called themselves venture philanthropies to attract donations from technology entrepreneurs, but many shed the label after the burst of the dot-com bubble. Some who apply its principles today prefer to call themselves “high-engagement” grant makers, distancing themselves from the notoriety of venture capitalism while highlighting their emphasis on hands-on support.

TOP VIEW Since the term “venture philanthropist” was coined during the dot-com craze eight years ago, this part of the charitable world has experienced boom, bust and rebirth. Today’s surviving venture philanthropists find themselves moving away from some of this school’s distinctive trends and embracing more traditional styles of grant making.

Although venture philanthropy has slipped from the public eye—venture philanthropists made just $50 million in grants in 2003, less than 0.2 percent of total foundation giving—their emphasis on transparency and accountability has changed how the giving sector operates. The movement remains strong within a core of about 50 organizations, such as Venture Philanthropy Partners, that stick to its doctrines; hundreds of others apply its principles to varying degrees.

As the sector matures, however, practitioners continue to wrangle over some of its basic tenets, such as how much control foundations should wield over their grantees or how strictly results should be measured. The only point everyone agrees on is that venture philanthropy comprises many definitions and remains a work in progress. Morino, for example, had to adjust his own strategies. When he realized that white-shoe management consultants were not right for the job, he replaced them with board members who had experience in public schools, local government and nonprofit organizations. In the two years since, he has learned more about helping school children than he ever thought he would. These were people, he says, “who had been where I needed to go.”