On the surface, the CEO transition at New Profit couldn’t have been smoother. Vanessa Kirsch, the founder of the 25-year-old venture-philanthropy organization, realized a few years ago that the organization needed more diverse leadership.
The obvious candidate was Tulaine Montgomery, who around 2015 had pushed the organization toward a quiet but radical shift in strategy — away from investing in rapidly growing national organizations that vowed to make statistical progress in communities of color, and toward smaller, lesser-known charities led by people of color who live in those communities.
Kirsch knew Montgomery well — they both graduated from the same Boston high school. Montgomery had served on the planning committee when Kirsch created New Profit, and she joined the organization formally in 2010.
New Profit spent a year planning the transition to co-leadership, and the two served as co-CEOs for two years before Kirsch stepped aside in July, leaving Montgomery as the charity’s sole leader.
They both say the transition could have failed had they not had open conversations about the political and fundraising capital that Kirsch had built up over the years — in other words, Kirsch made a conscious effort to transfer not just her title, but also her power.
“The person who is holding the seat has to be willing to share where they get support, resources, help, guidance, and cover,” Montgomery says. “You have to be willing to share what you hold individually. The mistake Vanessa didn’t make — she didn’t act as if she was holding that alone.”
‘Founders Assemble People’
New Profit is an intermediary organization — it must persuade donors and foundations that the charities it finds, invests in, and works with are going to change the world.
“Ultimately, nonprofit founders assemble people — enormously magnetic and compelling people who can engage donors on the sheer force of their vision and what it means to have a more just society,” says Steve Jennings, New Profit’s board chair. “Vanessa gets donors to trust her with their dollars.”
Kirsch says that New Profit’s model of supporting entrepreneurs comes with built-in uncertainty — including rocky periods when her connections to donors and foundations kept the organization afloat.
“Not everything goes well all the time,” Kirsch says. “I might need to make that call and say, ‘We’re not hitting our goal, could you help us bridge the gap?’”
While for Kirsch the answer was often “yes,” both she and Montgomery agree that it would have been a mistake to assume that Montgomery would automatically get the same response. Even as New Profit revamped its strategy — more than 80 percent of the organizations it supports are led by people of color today, compared with nearly 80 percent led by white people in 2017 — at least a few of its long-term supporters worried that the strategy Montgomery was pushing was a mistake.
Montgomery recalls a discussion with one individual donor a few years ago who expressed concern that the shift toward supporting more organizations led by people of color would lead to a reduction in measurable outcomes. To Montgomery, the implication was clear — the donor reflexively doubted that the more-diverse leaders would be as effective.
“How can these people, when you talk about diversity, automatically worry about quality and rigor?” Montgomery asks.
New Profit’s own research in 2018 put numbers behind that disturbing view: It found that donors who want to help disadvantaged communities aren’t necessarily ready to trust spending decisions to the people from those communities. The study found that while most nonprofit organizations serve communities of color and other historically overlooked communities, only 10 percent of charities are led by Black or Latino leaders — and that those organizations receive less than 4 percent of philanthropic funding.
“Trust is what fuels the inequities we see,” Montgomery says. “When we call that ‘racism,’ it’s harder to get people to engage. We call it ‘trust-building.’”
Frank Conversations
That same trust-building had to happen within New Profit’s ecosystem — in interactions Kirsch and Montgomery had with board members and supporters.
“It’s something you have to transition,” Kirsch says. “It’s not easy to do. I’d say, ‘You trust me, now trust Tulaine like you would trust me.’ We had to have those conversations and make all of that explicit.”
The CEO transition at New Profit might have failed if Montgomery and Kirsch had internalized the historical fundraising challenges that Black leaders have faced, Montgomery says.
“It’s actually really important what you believe when you go into this situation — if you think it’s going to be fraught, you build around that,” Montgomery says. “Vanessa believed in me and my ability to lead — she didn’t patronize me by hiding things. She said, ‘These are the donors where we might have a longer distance to travel.’ She was honest about it.”
The results suggest their approach worked. New Profit recently finished raising $100 million for its Proximate Capital Fund, which seeks to address the resource gap faced by nonprofits led by people of color.
“Financially, the organization has never been better,” says Jeff Walker, a New Profit board member who served as chair for seven years until Jennings took over in April. “That means we can be more active — and proactive — in getting funds out to where they need to be.”
Kirsch will remain a senior partner at the organization she founded, focusing on democracy-related investments, helping with fundraising, and planning New Profit’s 25th-anniversary celebration this fall.
“Every day I’m in awe of Tulaine,” Kirsch says. “I couldn’t lead like she leads. It’s a gift to see her take the mantle.”
