Jon Brilliant, Co-Founder and Chairman of the Start It Up Delaware Social Impact Fund, is helping to build a vibrant startup community in Delaware through partnerships with the state government, private industry, and early-stage entrepreneurs. Recently, he sat down with Comcast Newsmakers to describe exactly how the Social Impact Fund — of which Health for America is the first funded project — works.
Here is a video and transcript of Brilliant's conversation with Jill Horner:
A for-profit solution to a nonprofit problem. I'm Jill Horner, this is Comcast Newsmakers. With me is Jon Brilliant. He is Co-Founder and Chairman of Start It Up Delaware Social Impact Fund. Thanks for being with us, great to see you.
It's great to see you as well.
Let's talk a little bit about the concept behind this fund, because you've borrowed a little from the idea of a social impact bond, but what do you mean behind that concept and how have you applied some of those ideas?
Sure. So social impact bonds were started in the United Kingdom and brought here to the United States in New York and Massachusetts. And they combine a unique partnership between the public and the private sector, where the private sector says to the public sector, "We can solve a social problem better than you can. We're going to put our capital at risk to do so. And in fact if we solve that problem, we deliver value, then you the public sector will pay back those bonds. If we don't, then there is no repayment obligation." So borrowing from that, we've said we can solve in a for-profit way problems in the nonprofit sector, and if we do and we create value for our partner, our partners in the equation have agreed that rather than repay the capital source, the capital will be put back into the Social Impact Fund to spur future innovation in the nonprofit sector.
And let's get into how this actually works. You've started in the healthcare arena. Give us an example of how this is working and what you mean by this. You have focused on healthcare first, but you're looking into other arenas as well?
Sure. We started with backing from Discover Bank and The Verizon Foundation, and they funded what are called Health for America Fellows. We have four Fellows who have been placed within Christiana Care, the largest hospital system here in the United States. They're focused in the cardiology department, in congestive heart failure, which disproportionately affects the low- to moderate-income members of our community, so we're solving a social problem. Over the next ten months, they're going to spend their time coming up with ideas, solutions, products, devices, to solve this problem. If they do, we're going to create a company. Our partner, Christiana Care, has agreed that the value they receive in the future from that would then be put back into a social impact fund to perhaps fund healthcare or some other initiatives we're looking at in agriculture, in education, workforce training, and other areas.
At that point, will the fund then become self-sustaining, is that the goal?
Our goal is that over the next three to five years, if we can source enough opportunities to create new companies, new solutions, solving in a for-profit way a nonprofit problem, and we start to see the return from those initial investments in that three- to five-year period, such that we hope that the return will then become a self-sustaining mechanism.
Starting with healthcare, you're looking into other sectors as well, looking to grow the reach of this fund?
Right. So we've put out a press release and a call to action to nonprofits to say, if you have a problem that can be solved in a for-profit manner — that is, it can create a business and a self-sustaining business that would work both here in Delaware and perhaps beyond; so our Health for America Fellows, if they solve this problem in congestive heart failure for our local community, no doubt that would be resolve a problem for someone else elsewhere. So the goal is, if you're a nonprofit and you have a problem, come to us, let's work through the business model, we can source the capital to solve that problem, and hopefully create that self-sustaining ecosystem.
Why should someone contribute to this fund and to these ideas rather than what we would think of as typical philanthropy?
Right. So the way we think about it is, you can fund an opportunity that perhaps solves a problem for the next six months or the next year. What we hope to be doing is seeding the future such that the value we create today will be value that will be contributed back into the system tomorrow. So I don't know that within the nonprofit sector there are many opportunities, if any, where you can contribute today and hopefully grow something of value that will then seed future innovation.
Thanks so much for being with us, Jon, and people can visit your website for information about how this model works and some of the ideas that you're looking for for the future as well.