Philanthropy is getting ever more entwined with venture investing, and many funding efforts are done collaboratively, with smaller foundations teaming up on impact investments with other partners. You can see this in one issue area after another, as we report often.
One new player making things happen in the clean energy space is PRIME, a nonprofit whose mission is to "accelerate the commercial deployment of technologies that reduce global greenhouse gas emissions." More specifically, PRIME says it "empowers philanthropic investors with the critical tools they need to make direct, for-profit investments that address climate change." (See more details here.) In other words, it's a matchmaker.
Clean energy is a happening area right now, drawing lots of interest, including—it turns out—from movie stars. PRIME introduced Will and Jada Smith, who have a family foundation, to a promising new startup called Quidnet Energy and helped them navigate the decision to sign on and support the venture.
Quidnet's support from the Will and Jada Smith Foundation and other funders was unveiled recently by the Obama Administration as part of the president's call to action to encourage more funding of technologies that fight climate change. Initially announced in February, the Clean Energy Investment Initiative plans to gather $4 billion for the funding of tech startups that are on a mission to help the planet with better energy resources.
Started in 1996, the Will and Jada Smith Foundation provides grants primarily in Los Angeles, California, Baltimore, Maryland, New York, New York, and Philadelphia, Pennsylvania. Historically, the foundation has funded social services and health organizations, as well as arts education, and Christian churches and schools. Its most recently reported total giving was for $435,160 for 48 grants in 2013, and it listed only around $17,000 in assets.
Rest assured, though, there is plenty of money waiting in the wings here. Will Smith made $32 million in 2014 alone, and his net worth has been estimated at over $200 million. A recurrent theme in IP's coverage of entertainment figures is that many of these folks have significant fortunes—the kind you might normally associate with business entrepreneurs—and we can expect greater giving from this sector in coming years.
This funding for Quidnet Energy is a new direction for the Will and Jada Smith Foundation, and shows how even small foundations can get in the game of impact investing. By using PRIs, (program-related investments) and other investment tools like straight convertible debt and recoverable grants, the Smiths and other foundations can support mission-driven, but more risky, work in clean energy research, an area of funding where venture capital has reportedly been drying up in recent years.
PRIME aims to facilitate this new action by helping funders identify the most promising new ventures to get behind. PRIME has a host of early supporters in the nonprofit world including the Betsy and Jesse Fink Foundation, Blue Haven Initiative, the Chesonis Family Foundation, Echoing Green, Glass Charitable Trust, the Pritzker Innovation Fund, and the Stiefel Family Foundation.
And just what is Quidnet Energy's new tech innovation? The startup has developed a low-cost method for storing energy generated by wind and solar—a key challenge right now in the clean energy field.