Policy Venture Capital

Abstract

This article seeks to understand how foundations decide to invest their funds in social programs and, in particular, what role government policy plays in that decision. The article develops the concept of foundations as venture capitalists who invest in particular communities and government programs expecting a return on their investment. It analyzes the risks and rewards of the investment decision, given the vagaries of the public policy decision process. The concept of foundations as policy venture capitalists is applied to child care programs to illustrate these policy investment strategies in a concrete way. The findings show that in seeking to achieve their policy agenda for children and families, only a few foundations have acted as policy venture capitalists to lead and innovate in child care. Most foundations have played an important but targeted investment role of partnering with government, filling in gaps and inconsistencies, and evaluating the implementation of government initiatives.

Keywords

private foundations philanthropy child care child development public policy social entrepreneurship social capital

Get full access to this article

View all access options for this article.

References

Brooks-Gunn, J. , Han, W.-J. , & Waldfogel, J. (2002). Maternal employment and child cognitive outcomes in the first three years of life: The NICHD study of early child care . Child Development, 73, 1052-1072 .

Cohen, A.J. (1996). Financing child care: A brief history of federal financing for child care in the United States . The Future of Children, 6(2), 26-40 .

Covington, S. (2001). In the midst of plenty: Foundation funding of child advocacy organizations in the 1990s. In C. J. De Vita & R. Mosher-Williams (Eds.), Who speaks for America's children: The role of child advocates in public policy (pp. 39-80). Washington, DC : Urban Institute Press .

Ewing Marion Kauffman Foundation. (2000). When school is out. Public policy report. Kansas City, MO: Author .

Foundation for Child Development. (2000). 100 years of commitment to children: Change and continuity. New York: Author .

Greenberg, M. , Lombardi, J. , & Schumacker, R. (2000). The child care development fund: An overview. Washington, DC: Center for Law and Social Policy .

Heclo, H. (1977). A government of strangers: Executive politics in Washington. Washington, DC: Brookings Institution .

Hellman, T. , & Puri, P. (2000, Winter). The interaction between product market and financing strategy: The role of venture capital . Review of Financial Studies, 13, 959-984 .

Kahn, A.J. , & Kamerman, S.B. (2002). Beyond child poverty: The social exclusion of children. New York : Institute for Child and Family Policy at Columbia University .

10.

Kingdon, J. (1997). Agendas, alternatives and public policies (2nd ed.). New York: Addison-Wesley .

11.

Klein, A.G. (1992). The debate over child care 1969-1990: A sociohistorical analysis. Albany: State University of New York Press .

12.

Knott, J.H. , & Weissert, C.J. (1996). Foundations and health policy: Identifying funding strategies in health programming . Policy Studies Review, 14, 149-160 .

13.

Laracy, M. (2001, August). Recent efforts to better help low-income working families through federal tax policy generated over $12 billion annually in new support for struggling households (Working Paper). Baltimore: Annie E. Casey Foundation .

14.

Long, S. , & Clark, S.J. (1997, October). The New Child Care Block Grant: State funding choices and their implications. Washington, DC : Urban Institute Press .

15.

Lowe-Vandell, D. , & Wolfe, B. (2000). Child care quality: Does it matter and does it need to be improved? Report to the Office of the Assistant Secretary for Planning and Evaluation. Washington, DC : U.S. Department of Health and Human Services .

16.

Mezey, J. (2004). Myths about the adequacy of current child care funding. Washington, DC: Center for Law and Social Policy .

17.

Mitchell, A. , Stoney, L. , & Dichter, H. (2001). Financing child care in the United States: An expanded catalogue of current strategies. Kansas City, MO : Ewing Marion Kauffman Foundation.

18.

National Women's Law Center. (2003). Credit where credit is due: Using tax breaks to help pay for child and dependent care. Washington, DC: Author .

19.

Phillips, D. , Mekos, D. , Scarr, S. , McCartney, K. , & Abbott-Shim, M. (2000). Within and beyond the classroom door: Assessing quality in child care centers . Early Childhood Research Quarterly, 15, 475-496 .

20.

Scarr, S. , & Eisenberg, M. (1993). Child care research: Issues, perspectives, and results. Annual Review of Psychology, 44, 613-644 .

21.

Shore, R. (2000). Our basic dream: Keeping faith with America's working families and their children . New York : Foundation for Child Development.

22.

Twombly, E.C. , Montilla, M.D. , & De Vita, C.J. (2001). State initiatives to increase compensation for child care workers. Washington, DC: Urban Institute Press .