August 22, 2014;Barron’s

When they write a check to a nonprofit organization, donors are said to wonder whether another group out there is more effective in the work they do, and if this organization really has the capacity to do what they say. Tipping Point, a nonprofit organization in Silicon Valley, has developed a model that connects donors to effective nonprofit organizations and helps nonprofits fund their capacity-building needs.

Last year in NPQ, Lori Bartczak wrote that foundations around the country are increasingly seeing capacity building as part of their investment in nonprofits and the good they do in the community. What Tipping Point offers is one expression of Bartczak’s advice. It serves as a broker of sorts, giving donors confidence that the money they provide will go to a strong nonprofit that could enhance its effectiveness if it had the wherewithal to build its capacity.

Tipping Point focuses on nonprofits in the Silicon Valley area that are helping people who are struggling to meet their basic needs (a recent newswire on hunger in the United States gives a sense of the scope of the problem). Tipping Point vets organizations with thorough examinations of their programs and services and organizational structures. Tipping Point’s website boasts that it spends nearly 100 hours before accepting a nonprofit into their portfolio.

Using money donated from tech giants like Apple, Google, and, Tipping Point invests in these nonprofits, offering them what they need to expand their staff, strengthen their accounting, or whatever might be needed to get to the next level. For donors, it is a way to invest in the growth of an effective nonprofit without having to do the work of finding the organization in the first place and then analyzing its needs—Tipping Point does all of that. What’s more, as Barron’s reports, “Every dollar donated goes entirely to charity since Tipping Point’s board members, including Katie Schwab Paige of the Schwab Family Foundation, NFL Hall of Famer Ronnie Lott and Fortress Investment Group’s Pete Briger, personally underwrite the outfit’s operating costs.”

Even more powerful, the help does not end with a donation. Nonprofits in the portfolio are given access to the specific capacity building they have been given a grant for, as Tipping Point will point them to a variety of resources in the form of consultants, technology, etc.

The value of this approach is manifold. On the one hand, it helps effective nonprofit organizations grow to scale, helping more and more people in need. But at the same time, the process helps donors to see the importance of capacity building and makes it easy for them to invest in it. It is a model to be explored and potentially replicated in communities around the country.—Rob Meiksins