A Better Chicago has a new CEO.
Beth Swanson took the helm of the venture philanthropy fund in May. ABC, as it’s known locally, has a focus on poverty through education and opportunity and has raised more than $20 million since its founding nine years ago. It invests those funds guided by an approach that taps “best practices from the public and private sectors to find, fund and scale ideas that have the greatest potential to drive impact.”
The current ABC portfolio supports 11 youth and education organizations with grants ranging from $4.4 million for OneGoal to $100,000 for PitchIn, a program of the Wood Family Foundation of former Chicago Cubs pitcher Kerry Wood. ABC had an annual budget of just over $3.5 million, according to its 2017 disclosures.
Swanson took over from ABC’s founder Liam Krehbiel, who is now chair of the organization’s board of directors. As we’ve reported in the past, Krehbiel is an heir to the Molex electronic interconnector fortune who decided to apply venture investing principles to the philanthropy sector after a stint at Bain and Company rather than pursue the family business. ABC has followed a well-established playbook for venture philanthropy, combining grantmaking with management to scale promising Chicago-area nonprofits. “Think about what successful venture-capital firms do,” Krehbiel told Michigan Avenue Magazine. “They look for high-potential, early-stage companies and provide the financial and intellectual capital to help them grow. We do the same thing.”
ABC is part of a larger constellation of venture philanthropy groups that have cropped up since the late 1990s. But unlike national outfits like New Profit and the New Schools Venture Fund, ABC is strictly focused in its home city, saying that it is “changing how Chicago fights poverty by investing in bold ideas that create opportunity for our youth.”
Building on a “Terrific Model”
Before ABC, Swanson was vice president of strategy and programs at the Joyce Foundation, where she was in charge of a grant portfolio of $50 million. She also served as deputy for education to Chicago Mayor Rahm Emanuel.
Swanson spent the first three months as head of ABC on a listening tour, talking to a range of stakeholders involved with the organization, as well as leaders in Chicago from the public, private and nonprofit sectors. She told me that she’s not planning big changes at ABC, but she said some things will be new, including a greater focus on emerging nonprofits and approaches.
“I feel like ABC will be pivoting, and philanthropy will pivot in general, to those organizations and solutions that are not on the radar yet, those that don’t have the valuation or big capacity,” Swanson said.
Overall, Swanson strongly affirmed ABC’s commitment to a venture philanthropy approach that stresses building deep partnerships with grantees.
“ABC has an almost 10-year history of really driving a terrific model of philanthropy, not only giving operating funds, but also providing management support, driven by the organizations themselves, doing what the organizations need,” she said. “That allows us to go find the high-quality organizations working on education and more largely on poverty and look at the landscape to think about organizations that may be getting close to scale, then support them so they can get there.”
Part of ABC’s mission under Swanson’s leadership will connect with her experience working on schools for the former mayor. She plans to help early-stage impact organizations to receive public funding. “I think it’s a different conversation as they begin to scale,” she said, “We start to ask, how can we apply their solutions and help the public dollars flow? How do we get the public system to adopt those best practices? Only then can they truly scale to all children.”
That’s important, because in education, nearly all of the funding and most of the policies come from government sources. But while only districts or states can drive innovation at a large scale, philanthropy can play a critical role in teeing up new ideas.
“That’s why we fund innovation,” Swanson said. “We can take more risks, prove other models. In the public sector, you don’t necessarily have that flexibility, there are not many innovative findings in the public space. So we ask, ‘Can we play that role?’”
Exploring innovation and connecting it to policy is a role that Swanson sees as not just important across education and philanthropy, but in Chicago specifically. “Chicago has gotten to a place, boasting increased metrics based on how far we’ve come in 20 years, graduation, test scores are at all-time highs, we have more people in two-year and four-year colleges, graduation rates there are up,” she said. “But what remains as a city, but also nationally, is that racial inequity still really persists. Even though all the trend lines are in the right direction, there is still a real gap on race.”
Pushing to the “Next Level”
In her work with the former mayor, Swanson says they did well to “bring innovation into the system. An infusion of new ideas and talent did push the system forward.” And, she says, “I felt like again, we’re in the moment where a new round of innovation and interventions could help push us to the next level.”
“For example, when [Arne] Duncan was CEO of public schools, was the first time we opened the doors to nonprofits to do wrap-around support on things like safer schools, eyeglasses, counseling, allowing the nonprofits to deliver what they are good at delivering,” she said. “And seeing the power of that shows that philanthropy has a role in finding, funding and bringing those nonprofits to the table.”
“What sets Chicago apart is an incredible civic fabric, a very healthy ecosystem of nonprofits surrounding our young people,” said Swanson. “Even in challenging moments, even in the teacher strike, the seven days kids were not in school, they were actually being served by nonprofits that were reaching out to children, making sure they had a safe place, were being fed. It was an incredible moment.”
“That’s one of the reasons I was excited about this role,” she continued. “If we can harness that spirit that exists in Chicago, that’s an incredibly powerful place for philanthropy and civil partners to go—in general,” she said.
Early-stage and growth nonprofits focused on education or poverty in the Chicago area can learn more about inclusion in the ABC portfolio here.