Lili Stiefel has a big dream – to help our oil-based economy shift to renewable energy. In 2007, she and her mother committed $1 million for grantmaking to projects that are creating non-oil jobs in the Middle East. Another $1 million they are investing in for-profit start up companies that are developing renewable energy. They are also working with an advisor to socially invest their foundation's assets.
When my mother and I started the Stiefel Family Foundation just over two years ago, we knew roughly nothing about foundations or the greater philanthropic universe. In retrospect it was perhaps not the most auspicious beginning for a new nonprofit, but we were too fired up to realize just how complicated it can be to give away money effectively.
My first instinct was to leap directly from my master’s thesis on radical Islam to the wide world of microfinance in the Middle East. My dewy-eyed thinking went something like - oil is the problem! Good jobs are the solution! Thus, microfinance in the Arab world! It took one conference in Yemen to teach me that money is not the most pressing problem in the Arab world. I was perplexed.
As it turned out, we identified our first grant recipient, the Turquoise Mountain Foundation in Afghanistan, not through a conference or lengthy search process but through a book review in the Economist. It was a huge turning point in our grant-making philosophy: the organization’s founder, Rory Stewart, was so competent and culturally sensitive that we suddenly understood the importance of supporting high-quality, thoughtful people instead of clinging to a narrow mission. We still focus on providing jobs in the Muslim world, but we no longer insist that microfinance in the Arab region is the only way to go about it.
Last year we relocated from DC to San Francisco to help support homegrown alternatives to oil. In a year’s worth of conversations with anyone and everyone in the nonprofit universe (an informative but absolutely exhausting process), I realized that the distinction between nonprofit and for-profit organizations was somewhat arbitrary (except to the IRS of course). If we hoped to help provide a viable alternative to oil, we had to support the startups tackling the problem, and these startups required seed funding rather than grants. We thus started a separate fund for investing in local clean-tech startups. We would love to merge the two into a hybrid entity, but making a series of risky investments would jeopardize our standing as a non-profit organization.
Over the past years, I’ve been delighted to find that some of the most creative and innovative thinking is taking place at the intersection of the nonprofit and for-profit universes. The people helping to create more flexible hybrid structures are some of the smartest and most sincere I’ve ever worked with, and they are the reason my job is exciting rather than tedious. The oil problem will definitely not go away during my lifetime, alas, but it is such an exciting and important time to be chipping away at the issue.