Profile: Aldus founder Paul Brainerd inspires the high-tech community to share the wealth.
By Deborah Claymon
The Red Herring magazine
From the May 1999 issue
Seattle, known for its coffee, rain, and grunge music, is increasingly also known for its young high-tech millionaires. There are several thousand from Microsoft (Nasdaq: MSFT), a pack from biotech, and another handful from telecommunications companies like McCaw Cellular (bought by AT&T (NYSE: T) in 1994). With all this technology-derived wealth, it's not surprising that a Seattle-based charity with organizers, donors, and a business model drawn from the high-tech world has emerged. Social Ventures Partners (SVP) is the first nonprofit foundation dedicated specifically to tapping into this new stream of wealth and using some of the principles of venture capital investing to manage its contributions.
SVP is the brainchild of Paul Brainerd, a journalist turned software entrepreneur who laid the groundwork for the desktop publishing revolution when he founded Aldus in 1984. After selling Aldus to Adobe Systems (Nasdaq: ADBE) ten years later for $450 million, he moved into the nonprofit sector. But Mr. Brainerd doesn't intend to leave his entrepreneurial talents behind. SVP aims to give techies -- a group widely criticized for making insufficient charitable donations -- a philanthropic organization that they can buy into, financially and intellectually.
CHECKING OUT
"Historically, charitable giving has been done at arm's length," says Mr. Brainerd. "But I discovered that people in their 30s and 40s, especially the energetic and passionate folks in high tech, wanted a more engaged form of giving -- something that asked for their brains as well as their pocketbooks." Likewise, after the exhilaration of starting Aldus, Mr. Brainerd did not want to be the kind of CEO that sits back and writes checks. Once he was no longer in the middle of the action, he says, the fun was gone. "After ten years as CEO, I was spending more time dealing with attorneys and financial analysts and less time with customers and development staff," he says.
SVP was a chance for Mr. Brainerd to work closely with the latter group in the nonprofit realm. He envisions SVP as a partnership of donors that would take more risks than traditional foundations, backing startup nonprofits and funding new ideas within existing organizations. He was also inspired by Harvard Business School professors who proposed that the techniques used by venture capital firms to guide their early-stage portfolio companies could be applied to charitable organizations.
In addition to cash -- SVP put $500,000 into Seattle-area educational and child-focused organizations in 1998 and anticipates doubling that amount this year -- the SVP partnership offers management guidance, help with finances and marketing, technical support, business contacts, and general long-term strategic support. (SVP members are required to volunteer their time and business skills in addition to a minimum of $5,000 annually.) In return, SVP requires grant recipients to submit audited financial statements and to allow SVP to participate in assessing the program's progress. "In traditional philanthropy, contact with the donor often ends with the gift," says Allen Grossman, a senior lecturer with Harvard Business School's Initiative for Social Enterprise, a project devoted to bringing business practices into the nonprofit world. SVP, he says, is applying a high-tech truism to the nonprofit world: that the source of investment money is as important as the amount.
DESKTOP ICON
Mr. Brainerd has a talent for turning new ideas into reality. "I have to give Paul much of the credit for the desktop publishing revolution," says John Warnock, CEO of Adobe. "Back when Aldus and Adobe were still very small fish, Mr. Brainerd had the guts to go to Apple Computer (Nasdaq: AAPL) and tell them that they should market the Macintosh as a desktop publishing computer."
After the Aldus sale in 1994, Mr. Brainerd immediately put his business skills to work in the nonprofit sector. He put one-third of his share of the Aldus proceeds into the Brainerd Foundation, which funds projects to protect the environment of the Pacific Northwest, and he has long been active with the Washington Software Foundation (WSF), which aims to bring technology to students, parents, and teachers in at-risk communities. "Paul is very strategic about his giving," says Keneta Anderson, executive director of WSF. "He gives just enough to draw others' interest. His is an entrepreneurial approach that generates long-term support from a broader range of people."
TECHS HARASSMENT
Despite Mr. Brainerd's history of charitable giving, the organization occasionally has to contend with public resentment of the new-money techie elite. "One of the things for which we sometimes get a bad rap -- and which we have to guard against -- is any arrogance associated with technology people," says Mr. Brainerd. The fact that roughly half of the group's 130 members have some affiliation to Microsoft means that SVP is often asked whether it supports that company's aggressive business tactics or whether it thinks Microsofties are generous enough with their wealth. "The national press loves to talk about the Microsoft millionaires and what they are or are not doing," he explains. "It's part of the long tradition in America of throwing bricks at the rich."
But for the most part, Mr. Brainerd says, SVP has been enthusiastically received. "In my business career, relationships were like handshakes," he says. "But my work with SVP and the Brainerd Foundation is like big hugs. Literally. People come up and embrace you from the bottom of their hearts for the work you are doing in the community."
For more information contact: communications@asvp.org
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