Is Philanthropitch changing how nonprofits raise money?

Philanthropitch founder Dan Graham said more Austin nonprofits are exploring their business side as a way to sustain their missions and increase their revenue thanks to the growing popularity of Philanthropitch.

Graham, a local tech entrepreneur and founder of his own philanthropic venture, Notley Ventures, credits the annual event Philanthropitch with the trend. First held in 2012, Philanthropitch brings the pitch-event structure from the start-up community to the nonprofit world. But instead of pitching apps, widgets or online services with negligible social value, nonprofits pitch tools to address persistent social problems.

Past participants in Philanthropitch include Easter Seals, Colin’s Hope, College Forward and Con Mi Madre.

Teresa Granillo of Con Mi Madre said the experience of preparing for Philanthropitch was invaluable. Con Mi Madre supports parental involvement for first-time college students.

In being among last year’s biggest winners, Con Mi Madre was able to explore a model that requires the school districts in which they operate to pay half the cost of the program while donors pay for the other half. In the past the program had been supported solely by donations.

“Creating that four-minute pitch was one of the best things we could go through,” said Granillo, “because it’s exactly what we were going to be doing when we pitched to school districts, businesses and donors. It helped us pinpoint what we do, what our impact is and what we want from them.”

Graham says more nonprofits are applying to participate in Philanthropitch then before, and that he’s seeing their applications improve as they start to understand what works for other nonprofit presenters.

“When we started Philanthropitch, we just thought it would be a good way to identify the most innovative nonprofits and bring them out of hiding,” said Graham. “Having done it multiple years, it’s played a role in the dynamic conversation of how nonprofits should be thinking about growth and has actually contributed to the movement of how nonprofits can change their infrastructure and strategy.”

While Graham said every nonprofit has an opportunity to make money by creating some kind of business arm, he admits that the business model can’t replace the philanthropy model predominantly used by Austin nonprofits.

He said, however, that the traditional philanthropy model has its limitations as it often ties funding to the success of the professional development person on staff. Instead, the business approach ties revenue to outcomes.

“One of the advantages of tying your revenue to outcomes is that it creates a system where you have more money to grow your organization. And that’s a very good thing that can leverage better outcomes.”

While the business model may be gaining popularity, some believe the pitch experience of Philanthropitch may not work for nonprofits, which represent equally important social causes.

Karen LaShelle, who leads Creative Action, which offers in-school programs in the arts, is a past participant in Philanthropitch as well. Creative Action funding has long operated with a mixed-revenue model, with 60 percent from program fees and 40 percent from donations, said LaShelle, so the idea of generating revenue from a business arm is not new to them. Among other things, Creative Action offers summer camps and after-school programs for a fee and uses funds to supplement other programs.

“What Philanthropitch does do is identify nonprofits that have strong turnkey solutions that have relatively straightforward and quantifiable results,” said LaShelle. “But it also puts our missions in competition with each other, and that can be hard for an audience to determine whether to vote for one cause over another.”

This year’s nonprofits range from Boys and Girls Club and Allies Against Slavery to Catholic Charities and Austin Partners in Education.  Awards are determined by an audience vote and a judges’ vote, so competing nonprofits are encouraged to fill the house with supporters. Philanthropitch has sold out the 400-person capacity venue in the past, but will take place in the 900-seat LBJ Auditorium this year to accommodate interest.

Thursday, May 22
5:30 – 8:00 pm
LBJ Auditorium
2313 Red River St.
Tickets on sale for $35

PHOTO: Chelsea Woodhead, right, watches as Dorelia Miller of writes a big-check award at the 2016 Philanthropitch event. Photo by Tri Dang.

NOTE: A shorter version of this articles also appeared in our weekly column in the Austin American-Statesman on Sunday, May 7, 2017.

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