submitted by :
Lee Davis and Nicole Etchart
Co-Director, NESsT
Santiago - CL

What specific issue are you trying to address? (50 - 100 words)
In 1997, two 30-something social entrepreneurs Lee Davis and Nicole Etchart hatched the international Nonprofit Enterprise and Self-sustainability Team (NESsT) to address the fundamental flaws they saw in the “capital market” for the nonprofit sector. Davis and Etchart found the current philanthropic paradigm left nonprofits heavily dependent on short-term donations and grants which prevented them from focusing attention on the long-term, strategic development of their organizations and missions. How were nonprofit organizations – particularly those in the developing world -- to have lasting, fundamental social impact or build a nestegg when they were scraping the philanthropic barrel and competing for a limited pie of charitable resources?

What business principle applied? (50 - 100 words)
Davis, a native of New York, and Etchart, a native of Chile, did not set out to “commercialize” the nonprofit sector. Rather, borrowing from strategies of the private investment worlds, they ventured to prove that dot-orgs could out-perform their dot-com peers – by bringing not only a financial return but a significant social return to donors and investors. In creating NESsT, Davis and Etchart envisioned a nonprofit capital market as richly diverse as the for-profit capital market: with a sufficient variety of financing sources (public and private) and types (grants, loans, equity) that allowed nonprofits to develop sustainable, diversified financing and supplement philanthropic support.

How did you put it into practice? (50 - 100 words)
After nearly 5 years of proving skeptics wrong, Davis and Etchart have succeeded to launch the NESsT Venture Fund. NESsT uses a “venture philanthropy” strategy to provide both capital and capacity-building assistance to a select portfolio of “social entrepreneurs” to help them grow and generate a profit – a profit that is then channeled back into the nonprofit parent organization to support its mission and programs. The NESsT provides 3 levels of support to social entrepreneurs: 1) early stage feasibility development assistance; 2) start-up venture planning grants and development assistance; and 3) multi-year mezzanine investments to a select portfolio.

How have you seen results? (50 - 100 words)
What started as a Baltimore-basement start-up, NESsT now has offices in Budapest, Hungary and Santiago, Chile and supports social entrepreneurs in 7 countries in Central Europe and South America. NESsT books, case studies, fora, trainings, etc. benefit hundreds of social entrepreneurs internationally. NESsT has directly assisted 15 start-up social enterprises; provided 7 venture planning/seed grants; made 2 start-up investments and 2 longer-term portfolio investments. Among the major investors in NESsT: Advent International, American Express, Levi Strauss, Mott, Rockefeller Brothers and the Staples Trust. The International Venture Philanthropy Forum, recently hosted by NESsT in Budapest, featured opening remarks from global citizens George Soros, Klaus Schwab and Congressman Tom Lantos. But at the end of the day, it is the “small” successes of NESsT’s portfolio that are the greatest measure of its social impact: P-Centrum in rural Czech Republic assists youth overcoming drug addiction to re-enter society by providing sheltered employment opportunities and other support services. NESsT has helped P-Centrum develop a woodworking business with a dual purpose: to generate income to support P-Centrum’s youth programs and to providing employment opportunities to P-Centrum’s constituents. Become addicted: visit www.nesst.org.

I am impressed by their vision and willingness to put this dream into practice, in spite of the obvious obstacles. We should have more visionaries like Nicole and Lee among us. Bravo!
Phil Collyer - Washington, DC, USA

Having attended the October forum in Budapest, I experienced first-hand the NESsT organization, Board, and mission in practice. The goals and professionalism exhibited as well as the depth of their investors and quality of the investee companies convinced me to donate some of my time to work with NESsT to further longer term sustainability of support for socially responsible organizations. If NESsT is successful in creating a nonprofit capital market, it will break one of the oldest paradigms in business and not only profoundly benefit socially responsible organizations but also society itself.
Robert Line - Hungary

In a year that we are all re-evaluating our own priorities, Lee Davis and Nicole Etchart have no such worries. They were in the right place before the right time. If that's not fast, I don't know what is.
Karen Moran Selkey - Dallas, Texas, USA

In these tough economic times, the non-profit sector needs to be just as tough as the for-profits. NESsT has a great vision to get NGO's onto the path of self-sufficiency. Rock on.
Anna Raff - New York, NY USA

Self-financing has proven to be one of the most stable funding mechanisms for nonprofit organizations, with the least potential for mission displacement. This option is particularly important in countries where philanthropy often does not take the form of financial support for third party organizations. Go NESsT!
Wendy Muzzy - Boston, Massachusetts USA

Great concept, filling a need that must be met in order to sustain the non-profit sector!
Gene Larson - USA

No question about it this entry should go all the way!!!!!
Larry Davis - Venice,Fl. U.S.A.

A great idea whose time has come. Here's hoping the model can be extended to Africa and the Middle East.
Simon O'Rourke - New York, NY, USA

This is a great idea...certainly the non-profit sector can benefit from these efforts, and so can the world at-large!
Jodi Theut - USA

My own work is with non-profits struggling to find the resources to carry out their missions. I am keenly, painfully aware of the need for more resources and more stability in funding to support programs. This is a vital issue in the nonprofit sector and I am grateful to Davis and Etchart for addressing it so creatively and intelligently.
Virginia Raff - Fairfield, CT USA

What an forward thinking venture! As someone with much experience in small, grassroots nonprofit organizations, I am excited at the opportunities for growth and sustainability that NESST is providing through their work!
Deborah Reber - Los Angeles, CA, USA

I have met Lee several times, and am continually amazed at his steadfast passion and uncanny skill at implementing effective and responsible change. This truly global organization itself has grown at a tremendous rate while for-profits in our own country continue to fail. I cannot imagine a better candidate for this distinction.
Derin Basden - Los Angeles, CA USA

I first met Lee and Nicole some 4 years ago and discoverd we were working in complementary fields. Their dedication and enthusiasm has been an inspiration and reassurance that we are not ploughing a lonely endless furrow. Small in size,Nesst exudes quality and global reach whose experience has a lot to teach mature civil societies. All power and success to them
Malcolm Hayday, Investors in Society - Kent, England