In 2014, a group of entrepreneurs and nonprofit veterans formed the Lever Fund with the mission to raise more local poverty-fighting dollars and to spend them in a smarter, data-driven way.
The Lever Fund model is inspired by successful organizations such as the Robin Hood Foundation (New York City, NY), A Better Chicago (Chicago, IL), and Tipping Point (San Francisco, CA). Like these innovative nonprofit funders, the Lever Fund applies sound metrics, emphasizes genuine impact, and is committed to producing solid returns on investment with the goal of moving people from poverty to opportunity—while keeping investors informed every step of the way.
Investment Approach: Research + Metrics = Results & Opportunity
We make strategic investments in transformational, high-performance nonprofits that are poised to have the greatest impact for economically disadvantaged families in the DMV, and that equip our neighbors to overcome poverty’s multiple barriers.
- In our initial investments, we have focused on organizations that assist individuals along on their career paths—largely through workforce development, education, and training.
- In time, we will broaden our funding scope to attack poverty on multiple fronts through investments in nonprofits that target early child development, health, housing, and hunger issues.
Value Proposition: ROI & Informed Philanthropic Investors
To ensure quantifiable returns on investment, the Lever Fund generates benefit-cost ratios for prospective nonprofit investees, and then invests in those organizations that promise the highest return on philanthropic dollars:
- We monetize the value of funded organizations’ outcomes, using best estimates of the aggregate benefit to their low-income clients that each investment creates per dollar cost to the Lever Fund—for example, by measuring a projected boost in future earnings.
As we are committed to making every Lever Fund investor an informed investor, we are committed to full transparency in how we calculate metrics and ROI. In collaboration with the nonprofits we fund, we publish on our website both benefit-cost analyses and impact reports. (See the benefit-cost analyses for our first three investees on The Impact.)
Creating a Culture of Innovation with Our Investees
The Lever Fund seeks to shift the burden from impact reporting to impact partnership in ways that give our investees the latitude to be innovative.
It is our hope that, through the implementation of our investment model, the DMV population will come to view nonprofit funding differently—recognizing the value of data and measurement and ROI/impact—and demanding results. By virtue of our work, more people will recognize that there is broad, community-wide economic value in lifting our neighbors out of poverty.
Poverty May Persist—But We’ll Fight It Relentlessly
No one can argue that poverty in our region has stubbornly persisted and actually grown—despite the determined efforts of many well-intentioned individuals and organizations. Poverty persists not because people don’t care or aren’t working hard to alleviate it, but because the efforts to end poverty too often are neither efficient nor effective.
The Lever Fund has no illusions about completely “ending” poverty in the DMV. But in partnering with community-minded others, we do two things:
- Demonstrate the power of a metrics-based, ROI-oriented, impact-demanding approach to fighting poverty; and
- Force questions about how nonprofits are and should be running their businesses and how our community is and should be making philanthropic investment decisions.