Before releasing funds, Venture Philanthropy Partners applies tough evaluation standards and focuses on philanthropic investment endeavors that have the greatest potential to contribute to the improvement of children’s lives, their core developmental and educational needs. Since the late 1990s, KIPP DC has raised the level of public education in underserved communities across the country. Emphasizing extra learning time and support for children, the efforts of KIPP DC have had a huge impact not only on the students that enrolled into its program, but also on the rest of the state’s youth sector.

Charter schools differ from traditional public schools in that they are independently operated and are open to all residents of the District of Columbia, regardless of their neighborhood, ethnicity, socioeconomic status, or educational level. There are no admission tests or tuition fees. Many parents opt to send their children to these educational institutions because they promise high quality education at little cost.

Large-sum donations from charitable entities such as Venture Philanthropy Partners are what keep the school operations running smoothly and at par with educational standards. They also take some of the pressure off of public schools that are filled to capacity or experiencing budget cuts. A good education is the foundation for better character and a brighter future. It is projects and partnerships like these that can give today’s children a better shot at success, no matter who they are or where they come from.

The term ‘contagion’ is accurate in the context of investment because it frequently leads to irrational or impudent behavior. Contagion prevents ‘healthy’ evaluations of investment opportunities, and gets in the way of sound judgment in decision making.

Contagion leads to the classic blunders associated with following the crowd – buying into the market when prices are high, and fleeing in panic when the prices drop. Contrarian behavior, generally the safest way to make money, is completely undermined by emotional contagion.

Emotional contagion is common because people tend to imitate those who seem to be successful. Envy and greed attract others into the same activities. The problem is that by the time contagion sets in when it comes to ordinary people investing, it is usually too late in the cycle to make money. Prices and the risks of a crash are too high at that stage.

So how do we overcome this contagion? The key is emotional neutrality – only invest for coldly rational reasons, and never because other people are buying and making money at the moment. Heated emotions, euphoria, and excitement are the enemy of prudent and profitable investing. Make sure you don’t get carried away with the crowd. In fact, it is almost always best to do just the opposite. When the crowd is cheering and buying, look to sell; when it is moaning, groaning, panicking and selling, it is generally time to make your move.

View a previously written post by Mouli Cohen about emotional investing

The other part of the story is about L3Cs, which are a type of “low-profit” LLC that has a charitable mission. It also qualifies as a PRI for foundations.

This essentially means that if Bill Gates is giving his blessing to PRIs, he is also, by extension, doing the same for L3Cs. And that could mean that 2010 will become the year when L3Cs really start to gain momentum.

Although the $400 million program-related investments fund is dwarfed by the $3.5 billion in grants made annually by the Gates Foundation, the fact that the world’s largest foundation is dipping its big toe into the world of venture philanthropy may accelerate a nascent trend in philanthropy.

So, what is venture philanthropy, and how do program-related investments play a key role in it? The phrase “venture philanthropy” was coined in the 1960s as an alternative strategy to merely having foundations write grant checks and hope the recipients (usually public charities) would use the money wisely. The concept is borrowed from venture capital, and uses loans and equity investments along with ongoing management and strategic assistance as a way to help the recipient organizations become self-sufficient.

In my opinion, the $400 million commitment to program-related investments by the world’s largest foundation supported by the two wealthiest men in the world – Bill Gates and Warren Buffett – should be just the kick in the pants needed to bring program-related investments into the mainstream of foundation philanthropy.

View a previously written post by Mouli Cohen about philanthropy

At a level not seen since the 1990s, financiers are talking of stock sales by tech companies led by social networking company Facebook and a batch of other Internet and greentech companies.

However, some seasoned financiers warn that most of the companies that have set their sights on Wall Street will never make it, and will be forced instead to sell out to a larger company. In two recent sales of private Internet companies, Zappos, the online retailer, was bought by Amazon for $850 million, and AdMob, the leading mobile advertising network, was acquired by Google for $750 million.

Last month, the number of companies that filed their intention to go public with the Securities and Exchange Commission jumped to 31, the largest number since before the financial crisis over a year ago. Hopes for a revival have been spurred by the strong rebound in technology shares since the spring, as well as the swelling ranks of large and profitable Silicon Valley firms.

In my opinion, Zappos was probably going to be the biggest IPO of the year in 2010. There have been a great number of these companies that have been working under the covers. I estimate there are up to 100 companies now that have hundreds of millions in revenue and profitability and are ready to file. There’s a lot of assessment going on right now within portfolios about which companies might be ready to go next year.

View a previously written post by Mouli Cohen about the economy

Photo by laurasalha

Regardless, of the how the foundation moves forward, the potential benefits for Microsoft are numerous, given that many of the early projects will likely focus on the their product ecosystem, despite claims that the foundation will be platform agnostic. Ultimately, the possibility of delivering a better product to consumers was perhaps too good to pass up, in spite of the financial outlay. Think of it as money invested in R&D with greater leverage. Depending on the spin, this announcement can also go far in bolstering Microsoft’s standing in the eyes of the general public as well, the very same people that could be buying their software down the road.

Bill Hilf, general manager of Windows Server, explained the decision on his blog:

“The perspectives on OSS at Microsoft have evolved to the point where Microsoft’s open source strategy is no longer just locked in a single ‘lab’ on campus – now OSS is an important part of many product groups and strategies across the company. We have become increasingly clear on where we work with open source – development methodologies, projects, partners, products and communities – and where our products compete with commercial open source companies or platforms. Today, there are engineering and business leaders across the company, myself included, looking at how to drive interoperability for customers and as a lever for new growth.”

[image via schoschie]

In one move (given its strong web presence), Google announced a plan to build on its online payment platform, Google Checkout, in a bid to create a universal system that will enable newspapers and other media producers to charge for their content online. Think of it as a gated community for that handles content created across multiple sites.

Google collects the micropayments, either through subscriptions or pay-as-you-go plans and distributes the money based on traffic or some other metric. The benefits for the producers are obvious, assuming they’re still able to pull in readers, but the boon for Google is twofold. They collect a percentage on the transactions and get to learn more about their audience’s habits. Which leads me to ask, will the public being willing pay, and will they have any choice?

The other deal is much farther afield. Google announced that it is working hard to improve the tech behind solar thermal heating systems. Essentially, seeking to improve the reflective surfaces to generate greater heat and more efficiencies. A plan that follows with its philanthropic quest to develop green technology, but also has the potential for big pay-outs given that the clean energy market is still relatively new.

But what’s most curious about this move, is that it appears to compete with Google’s early investments in solar, namely  eSolar and Brightsource. Apparently Google was unhappy with the level of innovations happening within this space and is seeking a more active role. This will have to be another wait and see, but with a working prototype expected in the next few months, it appears we’ll know soon enough.

[image via Yodel Anecdotal]

Currently, the high cost to build and maintain offshore turbines combined with their design constraints – they are still installed directly into sea beds and require additional stabilization to deal with the stresses of the ocean currents – they can’t compete on price with conventional land-based models. But with the Hywind’s innovative floating design, wind farms could be installed virtually anywhere, in waters with depths up to 2100 feet.

The dynamic turbine design, which employs stabilization technologies already in use on offshore oil and gas rigs, needs further improvements – lighter materials and blades that spin closer to the water’s surface – before it is economically viable and ready to be manufactured on a mass scale, but it’s early successes have already silenced many critics. Considering the infrastructure to transport the power is relatively inexpensive by comparison, the Hywind could be an attractive solution further down the road and one to keep an eye.

[image via phault]

The underlying thinking is that with greater transparency, consumers can take a more active role in affecting the culture of the corporate world – most notably, through their collective purchasing power. As founder Michael Mossoba notes in an article for Advertising Age, “When consumers are empowered to evaluate companies based on data rather than preconceptions, companies have a business case to compete with their peers on social responsibility.” A fact that has real implications for the ways corporations operate and ultimately, for society as a whole.

Mossoba admits that while the data is far from comprehensive, it is designed to get the conversation started and lead to further examinations of the companies and brands that we’re choosing to spend our money on.

[image via jvc]

This builds on the several key drivers of the overall market as consumer demand for ease of transaction, mobility, convenience and immediacy continues to grow. As more banks and retailers get on board it opens more doors for everything from traditional real world purchases to virtual buys.

In the US, the key component appears to be the widespread adoption of the smartphone and all of the functionality that comes along with it. Nokia enters tis emerging sector at a time when there are few competitors, but other players do exist – big names like Mastercard and Facebook and lesser-knowns like Boku and Zong – all trying to establish a universal platform. And this universality will be essential in determining who rises to the top, as developers look to seamlessly push their service across multiple platforms and handsets.

In the meantime, I’m curious to see how banks and retailers respond. Will they go for the appeal of reaching the largest audience and leverage every system or will they back a winner and negotiate lower transaction fees? This will be an interesting show to watch.

[image via whiteafrican]

At a time when our country’s economy is struggling to find innovation and get consumers spending again, it’s these same small businesses that we need to rely upon to provide the necessary boost. In an attempt to remain open and continue serving as a valuable community resource, many of these centers have themselves needed to innovate, diversifying their funding efforts and looking for new ways to bring corporations and banks on board.

Given that there is little to no return on investment for providing such backing, these centers have to add value to these business relationships through other means. Whether that takes the form of branded sponsorship, shared community support (in the form of volunteering etc.), opensource collaboration or some other form, I think this could present a real opportunity to rethink the role of these centers not only within the business community, but the community at large as well.

[image via wonderlane]