Phil Soran’s Approach to Philanthropy
When I scoured the sessions for Twin Cities Startup Week, I found something unexpected: a panel discussion titled “Thoughtful Disruption in the Philanthropic Marketplace.”
I was somewhat skeptical. Nonprofit leaders are all too familiar with the application of a “business solutions” mindset to pervasive issues in the nonprofit sector, including racism, hunger, poverty, disability, chronic diseases, and addiction. More than a few earnest philanthropists have learned that their approaches are not as effective for nonprofits as they’d hoped. “Move fast and break things” won’t generally get top votes as a nonprofit mission statement. In fact, nonprofits are often the ones sweeping up the downstream effects and unintended consequences in disruption’s wake.
Nonetheless, Startup Week’s philanthropy conversation in October was packed. The free program was held in the private dining rooms at The Bachelor Farmer. Andrew Dayton, who co-owns the restaurant with his brother Eric, was one of the evening’s speakers. While there were a few recognizable nonprofit leaders in attendance, the crowd seemed mainly composed of entrepreneurs interested in spending their own philanthropic dollars effectively.
They came to hear Andrew Dayton, who founded the Constellation Fund, and Phil Soran, of the Soran Foundation, describe their approaches to charitable giving and how business principles apply. Their remarks were followed by responses from Sondra Samuels of the Northside Achievement Zone and Jennifer Stern of Great MN Schools. Jai Winston of the Knight Foundation moderated.
Phil Soran, who established the Soran Foundation with his wife, Margie, was the evening’s keynote speaker. His remarks were probing and engaging; many audience members were furiously taking notes. If you don’t know his name, Soran is a successful serial tech entrepreneur who started Xiotech and Compellent Technologies with his business partners in the basement of his Eden Prairie home (a Minnesota garage is too cold, he explained). In 2011, Dell bought Compellent for $960 million. More recently, he was involved in developing Flipgrid, which was sold to Microsoft. Soran is a sought-after speaker, investor, mentor, board member, and, yes, philanthropist.
Soran described his company’s culture as “positive aggressive.” He explained his business principles and values and how they’ve carried over to inform his philanthropy. If you want to hear Soran firsthand, his 2014 TEDxFargo talk is online, though at the recent Minneapolis gathering, the applicability of “positive aggressive” to charitable activity seemed to have evolved. Here are a few of his core principles:
- Use more “ands” and fewer “buts” (and many fewer “periods,” if any). As a core principle this one stands out. No one wants to hear excuses from a leader that emphasize the “buts” of their situation. “I could make a difference but …” is not a problem-solving approach. “I could make a difference and …” is a more positive frame. Great advice.
- Reach high and try for the unexpected. In the nonprofits he supports, Soran asks himself, “Can the team do it? Do they have the whole package?” Does he see commitment, imagination, and ambition?
- Treat your donors as stakeholders. Soran says that donors live vicariously through the nonprofit leaders and organizations they support. The more that nonprofits treat their donors as stakeholders, the more satisfying the experience will be for the donors. The relationship is not transactional.
- Treasure the first check you get. Soran says that someone gives every check with heart, no matter what the size. How that first gift is honored can lead to long-term relationships and gifts (or not).
- Ask for what you need. Soran’s philosophy: If you don’t ask, you won’t receive; when you do ask, you may be surprised by how well people respond. While his stories about asking mainly harked back to his business enterprises, this principle certainly holds true for the nonprofit sector. Does your nonprofit “make the ask” and explain the difference the money will make as often and as effectively as possible?
After Soran spoke, the crowd heard from Andrew Dayton about the vision and purpose of the Constellation Fund (which was ably covered by TCB editor Liz Fedor in the September issue). The crux of Dayton’s remarks for the Startup Week audience focused on ways he seeks to remove his personal bias from his philanthropic choices, instead relying on data and “results-based accountability” to identify charities that are making a significant difference in society. As part of the funding consideration process, the fund’s team develops an impact analysis, which is shared with the nonprofit whether or not financial support follows.
“We’re looking for solidarity, not charity,” Samuels of Northside Achievement Zone (NAZ) told the audience. “Charity has not worked.” NAZ takes a long-term, multigenerational approach to closing the opportunity gap and ending poverty for children in north Minneapolis. Entrepreneurs like Soran and Dayton are demonstrating new ways that such solidarity might take shape between a new generation of philanthropists and the ambitious, creative nonprofits they’re supporting.
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Sarah Lutman is a St. Paul-based independent consultant and writer for clients in the cultural, media, and philanthropic sectors.