Creative Philanthropy for Climate Change

By Abby Schultz

Dave Snydacker, a materials engineer who founded Oakland, Calif.-based lithium-extraction company Lilac Solutions in 2016, got his idea off the ground with angel investments of about $50,000 a piece. Then in November 2018, an investment fund launched by the nonprofit Prime Coalition in Boston led a $2.5 million funding round. 

Before Prime invested in Lilac, the company went before Prime’s outside investment committee of seasoned venture investors, whose charge was to discover if Lilac was ready for the kind of traditional venture fund investing they do, or if it needed more time to prove its concept. 

While a pronouncement of “no, you’re not quite ready” from a venture firm could spiral an enterprising scientist with no money into the valley of death, in this case, a thumbs down from the committee gave Prime the green light to step in, says Matthew Nordan, managing director at Prime Coalition.

As a nonprofit, Prime has to prove to its investors—philanthropists, foundations, and donor-advised funds—that they are filling a need the market wouldn’t otherwise supply. By meeting that “additionality” criterion, a philanthropic group, according to tax law, can make a tax-deductible investment. 

Prime’s insight into how philanthropic organizations could “invest” in promising clean-tech start-ups was the brainchild of Sarah Kearney, Prime’s founder and executive director. Kearney had worked for former telecom entrepreneur Arunas Chesonis’ family foundation out of college in 2007, helping them to make grants focused on clean-energy technologies.

To continue reading, please visit Barron’s.