The Newest Way to Solve the Country’s Biggest Problems

What if there was a way to invest in a nonprofit and earn a financial return based on impact? What if donors made performance-based donations that catalyzed investment capital and unlocked impact data? These are just some of the questions that San Francisco resident Lindsay Beck asks herself as she sets up NPX, a company that’s transforming the way impact is financed in the nonprofit sector, along with her cofounder Catarina Schwab. Similar to social impact bonds in that participating ventures would be able to expand much faster than usual, the infusion of private dollars would come from citizens making investments on the exchange. Beck, a Wharton business school grad who founded her own nonprofit for cancer patients, spoke with NationSwell about combining the private and nonprofit sectors.

What’s the best advice you have ever been given on leadership?
What I see in others that I aspire to be most like is presence in a moment. We’ve all been in meetings where someone runs in: they’re late, they’re scattered, they spend 15 minutes telling you how busy they are and then finish by telling you all the things they have to do next. By contrast, I have had meetings and personal experiences where people come in and don’t bring any of that with them. We sit down, conquer whatever the agenda is, and I feel like the center of their universe. To me, that is the most powerful and very hard. It requires behind-the-scenes systems, a mindset and help to get there.

What’s on your nightstand?
I am trying to read three books a month right now, so I currently have “Just Mercy: A Story of Justice and Redemption,” by Bryan Stevenson, which I’ve been told is amazing and is teaching me more about recidivism in the U.S. justice system. I also have “The Third Wave: An Entrepreneur’s Vision of the Future,” by Steve Case, which is brand-new and everyone’s raving about. And then I have “How to Raise an Adult,” by Julie Lythcott-Haims.  She’s the former Stanford dean who wrote the book about how we’re all ruining our kids and how to fix it.

What’s your favorite movie of all-time?
The movie that had the biggest impact on my life was “You’ve Got Mail.” This might sound funny, but when I saw it, I was recovering from surgery. I was a cancer patient [Beck is a two-time cancer survivor], and I had just been told that chemotherapy would render me sterile. I didn’t know what to do about that. In the movie, one of the characters goes off to freeze her eggs. Literally because of that movie, I started calling every [in vitro fertilization] clinic in the country and found a way to freeze my eggs before I started chemotherapy. It was not necessarily my favorite, but it changed the trajectory of my life and many people’s lives after that.

What innovations in your field are you most excited about right now?
I am excited about all of the blended finance — some people call it social finance, and it can be grouped with impact investing — that are linking capital with impact. We’re finding new, creative ways to fund and finance solutions to some of the world’s biggest problems. Up until recently, the nonprofit sector (or more largely, the impact sector) had been very opaque and inefficient. There’s been a lot of money flowing without knowing what works, what doesn’t and where something’s better. We haven’t applied some of the traditional free-market principles to that sector: there’s not robust information flow or sufficient capital flow tied to impact. That’s changing. With increased transparency and efficiency, I think we can better identify and fund what works and more quickly stop what doesn’t.

What do you wish someone had told you when you started this job?
I feel like everyone told me it, I just didn’t hear it: it is going to take a long time. Relax, be patient, slow down. Don’t rush it. Being an entrepreneur there’s a sense of urgency, but it’s exhausting, and everything takes twice as long as you think it will. It’s okay to slow down and wait for the world to be ready.

What inspires you?
On a micro level, I want to see this change in the world. I’m really driven not to sit back and hope other people do it, but to play an active role in creating the change I want to see in the world. On the macro level, I am motivated by having a purpose larger than myself and my own little world. In my past job and past career at Fertile Hope, a nonprofit telling cancer patients of the risk to their eggs and providing them options, I had the perfect nexus of passion-driven career that left a positive legacy and I was able to get paid for it. In the Jim Collins Venn diagram, at the center, that is utopia. I had that, and I created that in the nonprofit. Now I’m in the place where I’m trying to re-create that.

What’s your biggest need right now?
Our biggest need at NPX is an innovative philanthropist who’s willing to try something new. Everyone says they are both innovative and willing to try something new, but the reticence to act is surprising sometimes. We need someone who is ready to try and experiment, in terms of how they give. Whether it’s a person or foundation, they need to feel, “I’m tired of the existing playbook, and I’m ready to jump in the ring to try something new. I’m ready to act.”

What’s your proudest accomplishment?
It’s a little bit of a mix between personal and professional: becoming a mother, having my first child, because everyone told me I couldn’t have everything and all I had to overcome to do it. I created the organization in that spirit — to live it and believe it and preach it — but it was another thing to actually realize that dream. It’s an extraordinary day-to-day impact on my life, being a mom, especially after being told that’s not going to happen for you.

What something most people don’t know about you?
Once upon a time, I was a taxi driver. (You’d never know by reading my LinkedIn profile.) On Martha’s Vineyard, I was there for a summer in college, and that was supposedly the most lucrative job on the island. A bunch of my guy friends decided they were going to be cab drivers, and I said, “If you can do it, I can do it.”

To learn more about the NationSwell Council, click here.
This interview has been edited and condensed.

MORE: The New Way to Govern: Paying for Progress

The Visionary That’s Getting Everyone to the Table to Talk About Social Good

This February, on the exact same day, two governors from two very different states — Nikki Haley, a Republican in South Carolina, and Dan Malloy, a Democrat in Connecticut — both announced social impact bonds to promote family care: one for low-income moms, the other for parents struggling with substance abuse. Both of these bonds (also known as “pay for success”) deployed private dollars to fund the scaling of a social program. If the project succeeds in meeting specific, predesigned metrics, the private backers will profit from their investment; if not, taxpayers don’t owe a penny more. Behind both of these innovative, cross-sector partnerships was Tracy Palandjian, CEO of Social Finance, a nonprofit intermediary between all the parties, who helped bring the “pay for success” model to the United States after seeing it first implemented in England in 2010.
NationSwell spoke with Palandjian by phone from Boston about the daily obstacles and excitements that come with rethinking how American social services can reach more people in need.

Tracy Palandjian (third from left) with South Carolina Gov. Nikki Haley (center), who championed the “pay for success” model.

What’s the best advice you have ever been given on leadership?
I have two. The first one is an African proverb: “If you want to go fast, go alone; if you want to go far, go with others.” Just because one has a great idea and one could often accomplish a lot more, going at it alone is often insufficient if you really want to deliver a movement. That’s hugely evident in our work here. Imagine these very funky public-private nonprofit partnerships with so many stakeholders with very divergent motivations. What motivates a private investor? A sitting governor or mayor? The executive directors of these classic human service providers? We have everyone sit around a table to articulate a common goal — in this case, delivering results to our communities — when they have often conflicting frameworks and very different languages they speak in and very different world-views. Bringing them together around a very common goal among very uncommon stakeholders is something that we have found, yes, it’s challenging, but if we can rally this forth, we see enduring, powerful results coming out of those partnerships.
By way of background for my other one: I didn’t grow up in this country. I’m Chinese, and I grew up in Hong Kong. My grandfather whom I was very close to, his favorite quote was (translated to English): “Distance tests the strength of forces, time tests the hearts of men.” It really is a message about patience. A lot of things take time, and the people who can stay steadfast on that vision could achieve the most. My grandfather was born in 1903 in China. He took his courageous wife — my grandmother — and, at that point, four children, and literally fled the Second Wold War on foot, by boat and by train out of China into Hong Kong and then to Taiwan ultimately. He was a chemical engineer, completely self-taught. He left everything behind when he fled. Along the way, he lost two children. After they made it to safety, he started all over again. He made consumer batteries and completely rebuilt himself, his family and his business. I always think about their lives and what they were able to overcome and what they were able to accomplish. Sometimes, we take three steps backward to take five steps forward.
What’s your favorite book of all time?
One of my favorite books, which I’m proud to say is the namesake of our eldest daughter: a Chinese classic, “Tao Te Ching.” It’s just so poetic and so poignant about how one should live. And it’s full of these non-intuitive sentences like, “It is through being effortless that you can achieve the most.”
What innovations in your field are you most excited about right now?
Taking a step back, social impact bonds are probably the latest and the most recent comer to this broader investing landscape. I agree there’s been a lot of hype, but the reason why people are excited about it is that the impact is so direct. When our investors get their money back and then some, it’s because somebody’s life has been improved. This very articulated, metric-driven all-around life improvement, whether it’s recidivism or job attainment or education attainment or improved health outcomes, these are the metrics of each of our deals. Someone’s life improvement is the source of the return back to the investor, and that connection is really powerful. While the field started off in criminal justice (and still a lot of projects are focused on reducing recidivism), we’re excited to see there are a lot of projects in early education, in early childhood, in health and in workforce development.
How do you try to inspire others?
I just try to be who I am. I believe, as a person, I’m best when I’m aligned as a human being and I’m 100 percent authentic. I don’t try to say something because it will inspire others. I don’t try to do something because, well, that’s what I believe a good leader should do. I try to model good behavior for my colleagues. I’m not perfect, I have lots of limitations. I try to be a good parent and model good behavior for our children. I feel very strongly about this; I feel like there are too many lessons and advice that people give. People just need to be authentic.
What’s your proudest accomplishment?
I am probably most proud of the fact that I really think that I understand two cultures perfectly well. Obviously, I grew up in my own [Chinese] culture. My whole family’s still in that part of the world. You never forget your own culture and your native language. But I also think I’ve worked in America long enough and I’ve worked with enough different sectors and different kinds of people that I really understand how this country and this culture works, too. I think that’s just a huge skill to be able to be empathetic, to be able to step into the shoes of others. I think it’s a really important skill to have, especially for our work, which requires us to talk across sectors and work across disciplines.
What don’t most people know about you that they should?
I’m an artist at heart. That’s what I did as a young kid, all throughout high school and college, I painted a lot, I drew a lot, I experimented with all kinds of mediums. I miss that part of my life. I haven’t done much since I graduated from college. Now, I watch my kids do it, and it makes me very happy.
To learn more about the NationSwell Council, click here.
This interview has been edited and condensed.