Donna Rasile:

Hello and welcome everyone to another episode of FinTrust Capital Advisors From the Desk Of, our podcast about markets, life, and things financial. My name is Donna Rasile, Senior Vice President and investment advisor at FinTrust Capital Advisors. I am excited to share today an area of philanthropy whose focus is in impact investing, otherwise referred to as venture philanthropy. To help provide insight in this topic today, I’m joined with Mike Gatchell, Chief Executive Officer and Co-founder of Abundance Capital. Mike’s professional background includes a blend of business, higher education, non-profit, and community development, offering distinct insights from guiding Abundance Capital. He has extensive experience in fundraising, leadership, relationship management, and strategic development. Mike, thanks for being with us today. I look forward to our conversation. So, let’s go ahead and dive in. What exactly is venture philanthropy and how does it differ from traditional philanthropy?

Mike Gatchell:

Well, first off Donna, thanks for having me on the podcast. It’s a pleasure to be here. So, venture philanthropy is a powerful way to use tax deductible giving to make actual investments in high impact companies, real estate projects, and even non-profits. Rather than just giving the money away, as is the case with traditional philanthropy, venture philanthropy has the potential to earn a financial return while doing good. Making philanthropy more of a renewable or evergreen resource.

Donna Rasile:

Great. Wow, that sounds really interesting. I’m excited to learn more. How exactly does it work?

Mike Gatchell:

The concept of venture philanthropy has actually been around since the 1970s so it’s nothing new. Until recently though, the only way for individuals to participate was to make a contribution to a non-profit pool fund, which would then make impact investments and any returns that would come off of those investments would remain in the fund, so just straight contribution. But now often with the help of intermediaries like Abundance, it’s become more popular for foundations and donor advised funds to make direct investments into businesses, projects, or funds, with the returns off those investments actually accruing back into those giving vehicles for the donor to reinvest or grant.

Donna Rasile:

Great. I’d love to learn a little bit about your vision and why you started Abundance Capital.

Mike Gatchell:

Thanks for that. Let me define Abundance Capital first. So, Abundance Capital is a non-profit venture philanthropy intermediary, helping charitable donors use their tax deductible giving to make private investments and loans in their communities. The short answer as to why we started it is that we recognize that we’re living in a time when private resources and undeployed or accumulating philanthropy are at record levels. Yet for a number of reasons, our local economies remain vulnerable. We’ve got so many talented entrepreneurs and innovative ideas that just sit on the sidelines because they can’t access capital. So, what we wanted to do is we wanted to see if we could radically expand the impact that philanthropy could have on local economic development and at the same time help donors stretch the value of their giving.

Donna Rasile:

Yeah, that’s great. What a wonderful vision. I know that you’re structured as a donor advised fund sponsor, but I’m curious, how are you different from a community foundation or other sponsors?

Mike Gatchell:

Great question. We actually got into this work because we are motivated by the local mission of community foundations, and now we’re actually beginning to partner with them to help provide venture philanthropy to their donors. So, community foundations traditionally serve philanthropic donors and local non-profits with a wide range of beneficial services. Those services include the ability to set up a donor advised fund. But like most donor advised funds, while those funds are waiting to be granted, they can only be invested in publicly traded mutual funds or cash accounts. With Abundance, donor advised funds are set up specifically to make private investments and loans in their communities, whether that’s into businesses or projects that meet certain impact standards.

Donna Rasile:

Got it. So how do donors decide what to invest in? Do they choose from a menu, or do they bring their own ideas to the table?

Mike Gatchell:

A little of both. More and more donors are bringing us their own ideas for investments based on their interests, their objectives, or their experiences. But we’re out there constantly scouting for ideas to share with them as well, and these ideas often come from the various professional networks and partnerships that that we’re establishing. Either way the process ends up being the same. Donors ultimately, will recommend that we use their funds to make an investment. Then we screen, execute, and follow up with the investments, monitoring them along the way and making it really easy for donors as we handle all of the details and the compliance. And then we put any returns, and this is the key to this whole process, we put any returns that come off those investments back into the donor’s donor advised fund account so they can reinvest. And this creates that evergreen or renewable effect that I mentioned before.

Donna Rasile:

Yeah, that’s fantastic. Well, at FinTrust, you know, our team looks forward to our collaboration with your firm. Specifically for those clients who are philanthropy focused and truly want to make an impact in the community. I’d love for you to share how someone can find out a little bit more about venture philanthropy and also you know how can they work with Abundance Capital?

Mike Gatchell:

Yeah, thanks for that question, Donna. The best place to start is our website abundancecap.org. That’s abundancecap.org. From there folks can find a way to e-mail or call us for more information, but we also welcome referrals from trusted advisors like you all at FinTrust. We love to help folks come up with plans to incorporate venture philanthropy into their giving strategies. With us the relationships matter most.

Donna Rasile:

Absolutely. Well, we really appreciate your time today Mike and so happy you’ve been able to share with our listeners today a little bit more about venture philanthropy. Thank you all for listening today. We hope you found this podcast to be informative and thought provoking. It is our goal at FinTrust to provide insightful topics to add to your overall client experience. As always, if you have questions, please feel free to reach out. We’re happy to speak with you. We look forward to the next time you join us for From the Desk Of podcast.

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