Retired Goldman Sachs banker Chuck Harris is bringing Wall Street capital-raising methods to the nonprofit world
As an investment banker at Goldman Sachs (GS), Charles "Chuck" Harris helped raise billions of dollars for companies. Now the retired partner, 58, is happy if he raises mere millions. The funds don't fatten company coffers, though. They help improve education for low-income kids, an issue he cares about deeply.
Four years ago, Harris founded New York-based SeaChange Capital Partners with another ex-Goldman partner, Robert Steel, to bring Wall Street capital-raising methods to the nonprofit world. His idea is that nonprofits are held back by the time and effort it takes to raise funds in dribs and drabs for one project or another. By raising larger sums of money at one point in time—similar to the way a company would with venture capital or an initial public offering—nonprofit managers can stop worrying about cash and start focusing on their programs. "Imagine trying to grow a company with no financial certainty," he says. "Companies do not do that, and, it seems to me, well-managed nonprofits shouldn't either."
Before Harris hit on that idea, he had quit Goldman twice. The first time was in 1996, at age 45, to spend more time skiing, golfing, and with his family. He rejoined in 1999, when he was offered a job working part-time near his Connecticut home with the firm's technology investment banking group. He left for good in late 2002, after the tech bubble burst. "It was all part of a journey to find what work to do next," he says. "I had a great experience working there. It was a job, if you will, not a passion. But because we did well at Goldman, it allowed me the flexibility to find my passion."
The second time Harris left Goldman, he did so to chair a major capital-raising campaign for his alma mater, Phillips Exeter Academy. (The campaign raised $350 million.) Harris, who was a scholarship student at Exeter, says going to the elite prep school changed his life. Gradually, Harris got more involved in fund-raising and joining boards of directors. In two test cases of what would become SeaChange's model, Harris helped raise tens of millions for College Summit, which tries to improve enrollment rates, and Teach for America, which recruits college grads to teach in public schools.
With those two pilots completed, SeaChange—which got funding from Goldman, the Gates and Hewlett foundations, and others—set out to create a network of donors willing to make multiyear, six-figure commitments. At the same time, SeaChange started scouting for education-focused organizations on the point of expansion.
The first two nonprofits that SeaChange is working with, out of more than 100 it considered, are Uncommon Schools, which runs charter schools in Brooklyn, N.Y., and Newark, N.J., and New Teacher Center, which trains educators to work in inner-city schools. For New Teacher Center, the goal is $3 million. For Uncommon Schools, SeaChange's original goal was $30 million. But with the economy slow and would-be donors strapped, so far only $6.3 million has been committed and Harris has scaled back his hopes to $15 million. That campaign ends in May. "We are engaged in day-to-day combat to get there," Harris says. "You can't tell a program that's trying to grow to raise money along the way. They need the money now."