Alumnus Jeff Ochs Makes Connections Between Charity and Investments
Consider the Venn diagram—a commonly used illustration of overlapping circles that shows the intersection of different items or concepts. That simple tool is the basis for a nonprofit public charity that Humphrey School alumnus Jeff Ochs (MPP/MBA ‘14) started two years ago, appropriately named the Venn Foundation.
“I wanted to learn more about where charity and investing intersect, much like a Venn diagram,” says Ochs, who describes himself as a cross-sector entrepreneur. “That’s where our name comes from.”
Ochs has been working to create connections between nonprofits and for-profits for the past several years, including stints leading an angel investment network and managing the University of Minnesota’s Discovery Capital program. Much of that inspiration came during his studies at the Humphrey School and the Carlson School of Management, while pursuing a dual master’s degree in public policy and business administration.
Through coursework and research around philanthropy and social entrepreneurship, Ochs says he explored a lot of ideas around social businesses—for-profit companies that look past profit margins and make decisions that encourage societal advancement. A hands-on policymaking class gave him the opportunity to help write and advocate for the Minnesota Public Benefit Corporation Act, which became law in 2014, that legalized social businesses in the state.
“I became really interested in the intersection of profit-generating models and their potential for social impact, since businesses and nonprofits are so disconnected in our society,” Ochs says. “I was trying to find the commonalities, even though I wasn't exactly sure at the time where I was going to go with it.”
Now through his Venn Foundation, Ochs is an advocate for Program-Related Investments (PRIs), which are made by private foundations and other similar charities to advance their exempt mission, rather than to make money. Put another way, to be considered a PRI, an investment’s financial terms must be somehow “below market.”
The Venn Foundation helps individuals, foundations, and businesses make contributions to PRIs through a unique donor-advised fund model.
Raising Awareness of PRIs
As Ochs explains it, nonprofits have two traditional sources of capital: grants, which are one-time donations that have no financial return; and loans from for-profit entities, which are intended to make money for the investors. PRIs, considered to be charitable investments, are a better option.
“If I give a grant, it's one-time use of the money, and once it’s spent, it’s gone,” Ochs says. “But if I give a zero percent loan to a nonprofit organization, and get that money repaid to me over the term of the loan, I can reinvest that same pot of money somewhere else and essentially use it forever. I’m making an investment that no one in the private market would ever do today.”
Ochs recently asked a group of Humphrey School students to study the historical use of PRIs among Minnesota’s private foundations. Their research shows that PRIs account for only a tiny fraction of overall charitable giving in the state. Ochs says that’s primarily due to a lack of awareness.
“Many foundations and donors don't know about PRIs or have the capacity to implement a PRI strategy on their own. Venn offers another option,” says Ochs.
To raise the visibility of PRIs, Venn has just announced a campaign to raise $1 million in capital in two years for PRIs aimed at startup social businesses in the region. The Bush Foundation started off the campaign with a $250,000 contribution.
“The goal of this campaign is to help make this region the best place in the country to launch and grow businesses that officially commit to solving social problems,” says Ochs.
Ochs credits his graduate studies at the Humphrey School with laying the foundation for his career.
“My research into social business has become the groundwork for a lot of what I'm doing now,” he says. “The Humphrey School is a wonderful academic institution. It’s also a great place for practitioners to get involved and work with others who are actually doing things.Those relationships carry on in many ways, for many years past graduation.”