Fundraising and Fund Structures: How Habitat for Humanity Considers Venture Capital Tools to Pursue its Charitable Mission

The impact investing industry seeks to create a positive impact beyond financial returns. Nonprofits like Habitat for Humanity (Habitat), an organization involved in return-seeking investments alongside its charitable donation-based operations, face unique considerations to discover how to make social impact dollars go the furthest over time.

In early 2020, Patrick Kelley, global vice president of the Terwilliger Center for Innovation in Shelter, puzzled over these considerations with a team of program professionals at Habitat. In particular, he set out to learn how the team could scale its in-house, donation-based impact fund, the Shelter Venture Fund (SVF), and draw investors beyond philanthropists to help effectuate Habitat’s social mission and prove the fund’s financial viability. A core question emerged: Should Kelley scale SVF by going back to donative capital or by raising private money in a fund?

• Analyze how grant money can be used to build technical capacity and prove a concept for a fund that may be able to scale by attracting private investment.
• Evaluate alternative sources of financing for program-related investments in a nonprofit.
• Understand major considerations over time for nonprofits using fund structures.