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Over the years, there have been some bad decisions made in the college bars of Ann Arbor, Mich. This is a story about a good one.
Sammy Politziner and Scott Thomas met while students at the University of Michigan when they lived next door to each other as freshmen. The two worked at summer camps together, and after graduation, both served as corps members of Teach for America (TFA). From there, like many of their classmates (even the most idealistic ones), they both decided to pursue careers in finance.
In 2008, nine years out of college, both worked in New York City: Politziner was a vice president at Kildare Capital, and Thomas was an analyst at Neuberger Berman. While in Ann Arbor one weekend for a football game, they got to talking about their lives as they sat before the row of taps at Ashley’s, their favorite haunt. Both decided something was missing.
It had something to do with the year. Recently, the duo had volunteered for the Obama campaign, and the feelings of hope and change that the campaign had infused in so many also struck a powerful chord with the two friends.
They spoke about the difference they hoped to make, the lives they still wanted to lead. When they thought about what they might have to offer, they wondered out loud if perhaps the business skills they had developed during those years in finance combined with classroom experience from their TFA days could help make a positive social impact.
They made a decision to find out.
“We just looked at each other and said, ‘We don’t know what we’re going to do…but we have got to go back to being a part of the solution,’ ” Politziner says of the moment that led him and Thomas to found Arbor Brothers, the philanthropic organization named for their college town.
Arbor Brothers makes grants to social entrepreneurs focused on education and employment in New York (where they are based), Connecticut and New Jersey. Politziner and Thomas support nonprofits they identify as “second stage,” organizations that have already gone through seed funding but have not yet established a track record that would give them access to larger pools of capital. These groups tend to be two to 10 years old with two to 10 staff members and a budget of less than $2 million a year.
The founders of Arbor Brothers practice the concept of engaged philanthropy, combining financial support with countless hours of consulting. Each of their current grantees receive $250,000 in funding over the course of three years, while Politziner and Thomas spend 200 to 300 hours a year working with the leaders of each organization.
“Our view, one of our guiding principles, is not that we have the answer. It’s our job to build a relationship where we can be helpful in discreet, meaningful ways along that path,” says Thomas.
After the pivotal conversation at the pub, the two returned to their finance jobs. But to learn more about the social solutions they might support, they made a commitment that each week for six months, they would have dinner with various leaders in their fields. These foundation officers, nonprofit heads and social-impact consultants revealed there was a real hole in the funding market.
The friends who would go on to form Arbor Brothers learned that members of various second-stage organizations “were doing really good work with kids, but they had never run an organization before. They had never hired somebody, let alone fired somebody; they were doing their budgets on a napkin,” Politziner recalls. “We thought, these people are so talented, and they’ve got such a great idea, and yet, they’re slowly figuring out how to run an organization. And oh, by the way, they have to spend 70 percent of their time actually going out and raising money.”
Once Politziner and Thomas determined how needed they really were, there was no turning back.
While maintaining their day jobs, the two started with a few pilot projects. They spent 100 hours with Nick Ehrmann, then a Ph.D. student at Princeton University, who founded Blue Engine, a nonprofit that places teaching assistants in public high schools in New York City. They worked with Hot Bread Kitchen, an organization that empowers women and minority entrepreneurs in culinary workforce programs, a loan package that financed a move to a full-time kitchen. Then in September 2010, they quit their jobs and focused all their efforts on Arbor Brothers.
When they first got started, Arbor Brothers raised $15,000 — Politziner and Thomas put in some of their own money, and family and friends also contributed. Last year, the public charity had a budget of over $1 million, resulting from donations from individuals, family foundations and donor-advised funds. Because the nonprofit raises its own money, Arbor Brothers has to prove its value to its donors every year in a quantitative way.
One organization that has benefited from Arbor Brothers is the Connecticut-based All Our Kin, which empowers child-care providers as business owners, provides parents with safe and stable care for their kids and gives children a strong educational foundation before they enter kindergarten. The organization licenses people to run family child-care programs in their homes, then involves them as part of a professional development network — at no cost to participants.
From 2011 to 2014, Arbor Brothers provided All Our Kin with $190,000 in unrestricted funding (money with no strings attached). While the grant money has had an impact, it’s the guidance and knowledge of Arbor Brothers that has really made a difference. Jessica Sager, executive director of All Our Kin, says the hundreds of hours Politziner and Thomas spent with the team in New Haven, Conn., helped the organization set up systems to manage fundraising and budgeting. Arbor Brothers also helped Sager and her co-founder create a plan to expand their model to a second site, and now All Our Kin is in three cities and considering national expansion. “We are rigorous about evaluation,” Sager says, explaining how Arbor Brothers taught her how to use data to track outcomes. “We put everything on spreadsheets”
Politziner and Thomas talk about the importance of an “outcomes focused culture” and “scale of impact versus scale of number of people served” with as much enthusiasm as they talk about their other shared passion, Michigan football.
“At the end of the day, we’re going to step away, and I hope we’ll be close to these organizations,” Thomas says of the Arbor Brothers’ relationship with All Our Kin and other groups. “But unless the tools we built and the conversations we had become embedded into their organizational culture, they’re not in our view likely to be sustainable and successful over the long term.”
Over the past four years, Arbor Brothers has evaluated nearly 500 nonprofits and made site visits to at least 75. Through experience, they have become better at finding the right fits for their funding and expertise. “We made this mistake a couple of times where we would meet a young entrepreneur with a lot of passion and charisma and an exciting vision for change, but we had this nagging anxiety that they were more style than substance,” Thomas says of one of the lessons he learned the hard way. “They were great marketers, and while that is important and can raise money, if someone does not have a high internal standard for quality, those are not the people we’re equipped to help.”
They’ve also gotten better at taking cues from the leaders of the organizations they serve, figuring out the best ways to put their analytics background to use. For instance, when Arbor Brothers assisted All Our Kin on its financial model, they worked hard to make the numbers user-friendly, later realizing that the organization’s leadership felt more at ease knowing the ins and outs — no matter the complexity.
Politziner and Thomas believe not only in the importance of learning from their mistakes, but also in promoting transparency, so they conclude each of Arbor Brothers’ quarterly newsletters with a “We Blew It!” section where they detail the ways they can improve moving forward.
In the past five years, Arbor Brothers has funded 3 percent of the 500 high-potential, second-stage organizations located in the tri-state area that work to address the root causes of poverty. While Arbor Brothers is on a path to grow (this year’s budget is likely $1.25 million), they want to remain focused on finding, funding and supporting only the most promising of the organizations that fit this description.
“The lens through which we make grants is the concept that social change is extraordinarily hard and it takes a really long time and it’s messy,” Politziner says. “Those three simple tenets inform how we think about how our small pot of capital can make the biggest difference. That means we invest in organizations that make a deep investment in people over time.”
Another way that Arbor Brothers sets itself apart from other funding groups is that they don’t believe in forcing themselves on to boards or attaching strings to their funding. “We come to understand the organization so that we’re on the same side of the table, and their success is our success,” says Thomas.
Arbor Brothers carefully tracks and reports these successes. Doing so helped the organization settle on its three-year-long funding model, which gives them enough time to get these groups to the next level while also having a time pressure in place to reach organizational targets.
Last summer, Politziner and Thomas gathered the four organizations “graduating” from three years in their portfolio for a backyard barbecue in Brooklyn, N.Y. “It was a moment that caused me to reflect on how far we’ve come,” Thomas says.
All Our Kin celebrated its expansion to two new cities; Green City Force looked back on the long hours spent vetting and prioritizing service opportunities so they could improve placement outcomes for their corps members; and exalt now had refined performance standards in place and looked forward to doing even more for teens who have been involved in the criminal justice system. The fourth graduate, ROW New York, was able to raise more than $3 million over three years to double their program size and outfit a new boathouse — thanks in part to support Arbor Brothers provided on marketing materials and earned-income strategy.
Last fall, four new organizations joined the Arbor Brothers portfolio: New Heights, Coalition for Queens, Springboard Collaborative and OneGoal. (BRICK Academy, which is transforming failing schools in Newark, N.J., GirlTrek, which NationSwell has featured for its work mobilizing black women to walk their way to better health, and The New American Academy, which brings new models like teacher teams to New York City public schools, will continue receiving their funding.)
So far, Arbor Brothers is walking the talk of engaged philanthropy — and it’s working. “It’s a really tough balance, but they do it well, where they’re supporting the growth of an organization — talking about best practices — but they’re not imposing things,” explains Jukay Hsu, founder of Coalition for Queens, which looks to the tech ecosystem to provide economic opportunity to a diverse community.
“It’s not an outsider coming in saying, ‘Do X, Y and Z.’ … They have a unique level of human empathy and understanding and an ability to listen and digest.”