The True North Fund

The Edna McConnell Clark Foundation launched a new fund in 2011 to aggregate private growth capital and help expand programs supported by EMCF and the federal Social Innovation Fund to serve significantly more low-income youth.

The name we gave this fund—the True North Fund—reflects the inspiration and example we believe these programs and this funding model can provide for helping our nation’s most vulnerable young people overcome the obstacles that confront them, discover a sense of direction and purpose in their lives, and steer a course to productive, independent, successful adulthood.

As of July 2013, 14 co-investors had committed $63 million to the fund to help the twelve True North Fund grantees meet their federal match requirements and implement their growth and evaluation plans. The grantees have also succeeded in raising an additional $4 million to meet their matching fund requirements.

New! A Midpoint Report on the True North Fund documents what the nine initial grantees accomplished in the first two years, the challenges they faced, and lessons we collectively learned.

More broadly and ambitiously, the True North Fund seeks to build on the initial success of the Growth Capital Aggregation Pilot and determine whether adapting and extending this investment approach from individual grantees to an entire portfolio can create efficiencies of scale and make a broader impact on the lives of economically disadvantaged youth.

By aggregating and delivering upfront large infusions of growth capital for building the evidence base and organizational capacity that are prerequisites for scale and sustainability, co-investors in the True North Fund hope to:

  1. Demonstrate a more efficient and effective method of organizing private and public capital on behalf of low-income youth; and
  2. Encourage by example and advocacy fundamental change in how public and private capital is deployed to scale what works. 


NEW FORMS OF COLLABORATIVE INVESTMENT

The True North Fund adapts and extends the collaborative investment structure first tested in the GCAP model. There are some differences, however.  The three GCAP investments were structured similarly, but each was distinct and independent. The True North Fund takes a portfolio-based approach, in which co-investors can play at least three different roles and in some instances blend them:

  • General Fund: Several foundations and individual philanthropists have invested in the overall approach by supporting a general fund that directs resources wherever grantees need them.
  • Regional Focus: A second group of True North Fund partners targets its investments to grantees expanding in geographical areas of particular concern—a state, for example.
  • Targeted: A third group of co-investors directs its funds to one or more specific grantees.

Just as partners in the True North Fund may direct their investments to three different ends, they may make those investments in whichever of three different ways suits them best:

  • They may make grants directly to one or more grantees in the fund.
  • They may make a grant to EMCF, which will pass it on to one or more grantees.
  • They may invest in a True North Fund donor-advised fund. 

In every instance, True North Fund partners see and, if they choose, direct where their investment dollars are allocated. EMCF covers 100 percent of administrative and operating costs, manages all reporting, and conducts quarterly meetings of co-investors at which the performance of all grantees is reviewed.

Two meetings a year are held in person to review performance of the portfolio, with an agenda designed to share and advance knowledge and encourage deeper collaboration among co-investors.


THE RESULTS SO FAR

Melinda Tuan's Midpoint Report on the True North Fund documents how, as of June 2013, funding from the True North Fund had helped the nine initial EMCF grantees serve more than 83,000 new youth across the country, while over the same two-year time period the infusion of growth capital helped increase by 29 percent the portfolio’s revenues. All nine grantees have also launched or are planning evaluations of their programs’ effectiveness. The True North Fund will also help the three additional EMCF SIF grantees selected in July 2013 meet their matching fund requirement and implement their growth and evaluation plans.

The True North Fund and the SIF are also creating opportunities to advance new kinds of regional funding partnerships, as EMCF is developing with the George Kaiser Family Foundation in Oklahoma, the Duke Endowment in North and South Carolina, and Tipping Point Community and the Hewlett Foundation in Northern California.

These collaborations are making it possible for grantees to establish and expand effective programs more expeditiously than they could without local support. Based on this success, we hope to deepen these relationships, and to identify other states or regions where EMCF and local funders can collaborate to help more low-income youth become successful, productive adults.

The True North Fund, Tuan concludes, “has the potential to be a philanthropic breakthrough.” Click here to read the full report.