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Innovator Profile
Seven Hills Foundation
“Achieving Sustainability Through Innovative Investing Strategies”
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What is the Seven Hills Foundation?
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Seven Hills Foundation offers a full range of services that support children and adults with physical, emotional, developmental, social and
other significant life challenges. We employ more than 3,000 professional staff and serve 27,000
clients across the Commonwealth of Massachusetts and the State of Rhode Island.
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What is the philosophy behind Seven Hills’ sustainable investing strategy?
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Even before the recent economic crisis, Americans were constantly barraged with messages about
the importance of diversifying their investments. Relying too much on one revenue stream, we all know, is dangerous. But we often forget that the same thing holds true for our organizations. Just like a balanced personal portfolio, diversifying
risk is a smart business approach to social investing.
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How does this strategy work?
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Seven Hills Foundation owns a 36% stake in Sequest Technologies, an Illinois-based company that designs
software for nonprofits. The goal of this investment is to develop Sequest into a profitable company that will bring dividends which can be used to support the functions of the work of Seven Hills not covered through contracts or
private donations. This investment is designed purely to make money. We hope to provide a financial cushion so
we can continue to grow and expand in response to community needs, particularly during these tough
economic times.
Has Seven Hills invested in other companies?
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Seven Hills also owns 50% of a for-profit company called Group 7 Design. Our investments are part of a larger goal
to develop a portfolio that features 5-6 profit-making investments within the next 2-3 years.
Was your board concerned about the risk involved in this approach?
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Seven Hills Foundation actually considers this approach a lower risk than some other options because we researched this move very carefully. We considered this a much safer
option than starting a company that did not fit with our core competency and that we knew very little about …
…No investment comes without risk, which is why many nonprofits are hesitant to move into the private
investment market. Seven Hills closely examined the financials of potential investments in order to
determine the best possible fit. We think we have it, but we know that risk will always be part of the
equation – and we know that there will be times when we don't come out ahead. But ultimately the same can
be said of our other funding streams, be they state contracts, grants, or private donors. Looking to the
private market is another way to diversify in uncertain economic times.
Should other Massachusetts human service providers consider social
enterprise ?
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In all reality, many human service organizations in Massachusetts have been using social enterprise for a
long time but just haven’t had the language for it. Our strategy has been extremely successful. It has allowed us to scale from $3M to $150m in a 12 year time table. With the
increasing number of social enterprise success stories, interest in social enterprise strategies is
growing, which is good. The key is that organizations must embed social innovation and enterprise into the DNA of their organizations. This should be more than
just a knee jerk reaction to the current economy.
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For more information about Seven Hills Foundation, go to www.sevenhills.org/