Northwest Entrepreneur Network Logo

Paul Shoemaker is the Executive Connector at Social Venture Partners Seattle.  SVP helps donors fund local nonprofit businesses.  Paul works with small businesses – they just happen to be nonprofits.  Paul discussed SVP as a philanthropist and SVP as a small business.  SVP’s role as a philanthropist goes beyond philanthropy.  SVP connects people who want to change the world.


These are some of the differences between nonprofit and for profit businesses:

1. Nonprofits don’t have to give money back to the shareholders.

2. Nonprofits have different capital sources.

3. Nonprofits never have one goal.  They always have multiple goals.  In for profit businesses, the goal is to make money.

There are more similarities between nonprofit and for-profit businesses than there are differences.  They have the same financial issues.  Nonprofits must make more money than they spend.  Financially, ninety percent of what is true for for-profit companies translates to nonprofit companies.

SVP funds nonprofit businesses in the community.  SVP is focused on human capital as well as money capital.  SVP is also focused...

see more

Paul Shoemaker is the Executive Connector at Social Venture Partners Seattle.  SVP helps donors fund local nonprofit businesses.  Paul works with small businesses – they just happen to be nonprofits.  Paul discussed SVP as a philanthropist and SVP as a small business.  SVP’s role as a philanthropist goes beyond philanthropy.  SVP connects people who want to change the world.


These are some of the differences between nonprofit and for profit businesses:

1. Nonprofits don’t have to give money back to the shareholders.

2. Nonprofits have different capital sources.

3. Nonprofits never have one goal.  They always have multiple goals.  In for profit businesses, the goal is to make money.

There are more similarities between nonprofit and for-profit businesses than there are differences.  They have the same financial issues.  Nonprofits must make more money than they spend.  Financially, ninety percent of what is true for for-profit companies translates to nonprofit companies.

SVP funds nonprofit businesses in the community.  SVP is focused on human capital as well as money capital.  SVP is also focused on building the organization.  It funds small to medium sized nonprofits. 

SVP has learned these critical things in working with nonprofits:

1. You have to establish trust, mutual respect and listen.

2. Define knowing what good looks like.  Do a 360 view of the organization and where it is at.  Develop a visual of where the organization should go.

3. Financial management is more than a snapshot or audit.  Look at the course of cash flow, reserves and strategy.  Get the whole picture.

4. People with money do not necessarily make good board members.

5.  SVP gives the money unrestricted, not tied to investment in a particular aspect of the company.  Make it about the end goal and don’t tie people’s hands.

SVP learned some lessons about scaling:

1. Multiple sites.  The core question is what can we do better together than we do on our own?

2. SVP International tried to do everything all at once when moving into a new city and screwed up in some locations.  It then started doing things in sequence.  For example, SVP International screwed up in San Francisco.  It mended the fences as best it could.  When Stanford Social Sector Review wanted Paul to write an article about why SVP International failed in San Francisco, Paul wrote the article.  He was very transparent and as public as he could be.  SVP International gave it a little time, then went back in.  If you fail in a location once, give it some time and take what you learned from the failure with you when you go back in.

3. SVP didn’t understand what its core product was.  “Core” is what makes it what it is.

4. It’s all about people.  Great people make things work.  SVP is always looking for great people and for multiple year relationships with those people.  When looking for great people, SVP looks for honesty and integrity, communication skills and a sense of accountability.  People who do not have honesty and integrity will destroy the place.  Communications skills include the ability to communicate with a broad range of people.  A sense of accountability includes accountability to work, self and to the mission.  SVP can help people with these traits build a broader skill set.

5. The forms of leadership are aspirational and operational.  You need both.  Some people can do both.  For those people, you have to look at who is around them.  Is the organization solid, is the staff good, is the board good?  Plan long term about how to replace key people.  Don’t wait until you have only two months to do it.

6. Governance and boards.  Boards either don’t understand their role or don’t do it.  “Board” as a word stinks.  Paul prefers to use “governance,” which means that those people are the stewards of the mission.  Governance as Leadership is a book Paul recommended.  Boards must be a team of people with a mixed skill set.  The members of the board must be willing to work together.  They have to check their egos and work collaboratively.  They must understand what governance is about.  Good board members develop themselves.  They go to seminars, for example.

If you are going to be on a board, don’t do it for community service.  When you do work for the board, don’t leave your business hat at the door.  Work only on boards you feel intensely about and do it well.

7. How do you build purpose into a company?  Get more people thinking about the social and community aspects of the business.


How do you bring the public, nonprofit and private sectors together?  Individual sector can’t solve our problems.  The public sector is not going to solve our growing problems.  Nonprofits have the know-how, but not the money.  The private sector has the money, but not the know-how.  The private sector must be involved for social change to occur.  There are more nonprofit/public sector hybrid companies out there now than there were twenty years ago.  Collective impact from all sectors is hard, messy, doable and mandatory.  Strive Cincinnati is an example of people from different sectors working together to make things happen.  The high school and college graduation rates increased 10%, which is an incredible increase.

Thank you, Paul Shoemaker for sharing your experiences and expertise with us!


4 months ago