To make a transformational impact on the lives of young people and families in poverty, we must address the challenges facing three stakeholders: young people and families, social sector leaders, and philanthropists.
The Grip of Poverty
In the United States, one of the world’s wealthiest nations, one in five young people lives in poverty. This statistic — which encompasses some 15 million people — has barely shifted throughout the last decade. At the same time, the national rate of upward mobility has dropped by 40% in the past 50 years. Only half of America’s children will earn more than their parents, perpetuating the cycle of intergenerational poverty for those who start at the bottom of the economic ladder. The challenges these young people and their families face are massive and persistent.
15 million American children, or 21%, live in poverty
Only 50% of American children will earn more than their parents
Challenge for Young People and Families
To ignore intergenerational poverty is to undermine our nation’s future. Although solutions exist today that can make a meaningful difference, the social sector does not have access to the capital necessary to expand these solutions to the scale needed to address the multiple complex drivers of poverty affecting young people and families.
Challenge for Social Sector Leaders
Visionary leaders with evidence-based programs are making a meaningful difference in the lives of young people and families across the country. But without robust growth capital or any market incentive to think big and bold, they cannot bring their strategies to a national scale.
Challenge for Philanthropists
Nonprofit leaders need capital to scale up their programs, and there are philanthropists ready and willing to invest in them. Unfortunately, the market for social sector investment lacks any real infrastructure, which means philanthropists have no efficient means to deploy large amounts of capital toward high-impact solutions poised to scale.
To make a transformational impact on the lives of young people and families in poverty, we have to change the current funding paradigm – which does not channel significant capital to promising interventions – and embrace a new model of philanthropy.
Blue Meridian Partners seeks to transform the life trajectories of young people and families in poverty.
We do this in two ways. First, we identify successful strategies for addressing social problems confronting young people and families in poverty and help scale them.
Second, we unlock significant capital by providing philanthropists a way to pool resources to support scaling – investing as much as $200 million in each strategy. Our Partners work collaboratively – sharing the costs, risks and rewards of our efforts.
We believe our performance-based investing approach – combined with our model of capital aggregation – has the potential to change the funding paradigm for solving problems in the social sector.
We believe our approach to investing in national, regional, and innovative solutions to poverty offers new opportunities for three key stakeholders.
Young People and Families
for our nation’s young people and families living in poverty to access economic opportunities and lead more productive lives.
Social Sector Leaders
for visionary social sector leaders with strategies that “work” to aim higher, think bigger and achieve greater impact.
for philanthropists to scale “what works” by deploying capital, maximizing results, and sharing the costs, risks and successes.
Our model of philanthropy centers on performance-based investment and capital aggregation, building on the work of the Edna McConnell Clark Foundation (EMCF). Over nearly two decades, EMCF honed a comprehensive set of practices to identify and fund youth-serving nonprofits. Blue Meridian is leveraging EMCF’s experience with a holistic approach that includes five major components.
1 — Sourcing
We begin by casting a wide net, looking for promising strategies poised to achieve national impact on social problems confronting young people and families in poverty. The strategies we consider cover a variety of issue areas and differ in many respects. Every successful candidate for investment holds itself accountable for the outcomes of its target population and shares a potential to solve a social problem. Our research and vetting focuses on six selection criteria.
2 — Due Diligence
Next, we take a hard and deep look to determine whether an organization is ready for scaling – and if so, whether an infusion of philanthropic capital would help it create a real national impact. We test critical assumptions that underlie the viability of the investment and identify key questions to address in developing a scaling plan.
3 — Planning & Initial Investment
Blue Meridian’s initial investments are designed to help lay the groundwork for rapid growth. During this phase, investees start to fill leadership and capacity gaps, pilot new approaches, conduct additional evaluation and, most importantly, develop a scaling plan.
4 — Large-Scale Investment
We make big bets, up to $200 million, on each of our investees. Scaling plans are at the heart of Blue Meridian’s large-scale investments. Unlike most philanthropic or government grants, our investments consist of flexible upfront growth capital. Together with our investees, we decide on milestones to measure their performance over the investment horizon, with annual payouts tied directly to that performance.
5 — Ongoing Management
Blue Meridian’s support for investees extends beyond the financial. We pair each investee with a Managing Director: an experienced leader who provides strategic counsel to its CEO and board. In addition, we monitor our investees’ performance and make quarterly reports to our Partners.