WHAT WE DO

THE CHALLENGE

Minnesota is the most charitable state in America. But despite our generosity, there are 650,000 residents of the Twin Cities living in poverty, a number that has risen by 60% over the past two decades. Our communities of color have borne the brunt of this trend: for example, you are nearly six times more likely to be poor in the Twin Cities if you are black than if you are white, the largest such disparity of any major metropolitan area in the country. This all adds up to a startling reality: one-in-five residents of the Twin Cities is currently living in poverty.

How can the country’s most generous state also be home to some of the country’s worst inequities? This startling juxtaposition compelled us to rethink our approach as a philanthropic community.

The philanthropic landscape is a marketplace of ideas filled with committed organizations offering many different types of poverty-fighting interventions. In the commercial world, the goods that sell in a market are sorted and ranked by the interaction of supply and demand, and with key indicators like profits and losses. In the philanthropic world, by contrast, competitive forces cannot be relied upon to select the interventions having the largest impacts. The task of sorting is left to the judgment of the funder. At Constellation, we believe that this judgment should be informed by the best possible information, and that smart philanthropy is kind philanthropy.

Here’s how we do it.

100% IMPACT

Since our Board of Directors and Leadership Funders cover all of our over overhead costs, every dollar of your donation is invested in the organizations alleviating poverty most impactfully in the Twin Cities.

IMPACT AREAS

Constellation invests in and empowers organizations that demonstrably raise the living standards of individuals living in poverty in the Twin Cities. To do this, we focus our support on four key issue areas and, importantly, the intersections between them: education, employment, health, and housing. These are broad categories, so Constellation prioritizes the evaluation of organizations addressing the key drivers that local data and research indicates are exacerbating inequities in each impact area.

INTERSECTIONS

EDUCATION

  • Early Childhood Education
  • High School Graduation Rates
  • Higher Education Access and Persistence
  • Improving Educational Equity

EMPLOYMENT

  • Work Skills and Career Readiness
  • Employment Placement and Support
  • Support for Female and Minority Entrepreneurs

HEALTH

  • Mental Health Access and Services
  • Chronic Disease Support
  • Substance Abuse
  • Preventative Care
  • Maternal Care

HOUSING

  • Homelessness Prevention
  • Homeownership
  • Supportive Housing Services
  • Cost-Burdened Households

EVIDENCE-DRIVEN EVALUATIONS

Working with world-class economists and research organizations, Constellation leverages the power of analytics to carefully measure the poverty-fighting improvements that different nonprofits are making in the lives of poor residents. Specifically, we leverage peer-reviewed research, local demographic information, and data from nonprofits to conduct careful benefit-cost analyses, using evidence to understand the poverty-fighting impact of every dollar that we invest. We balance this quantitative analysis alongside thoughtful qualitative evaluations, such as the quality of a nonprofit’s leadership and on-the-ground insights about pressing community needs. Together, this information – the quantitative and the qualitative – can point us toward the best outcomes

IMPACTFUL INVESTMENTS

Constellation’s grant decisions are carefully made to maximize impact, much like investment decisions are selected by a financial manager to maximize profits. Having valued the measurable benefits, we compare the poverty-fighting impacts of otherwise dissimilar intervention types, such as that of an education program to that of a housing intervention. This allows Constellation to allocate resources to the programs with the largest impacts. 

For example, investing a dollar in Program A, whose benefit-cost ratio is 5:1, instead of in Program B, whose benefit-cost ratio is 1:1, creates $5 of extra per-dollar benefits for poor individuals at no additional expense to our donors. Constellation prioritizes investments of unrestricted funding, a rare form of capital in the philanthropic sector that allows the best organizations to grow their impact purposefully. And since we do not have an endowment, every dollar donated to Constellation is invested into the community with a sense of urgency.

BEYOND DOLLARS

Once a grantee is selected, Constellation conducts a collaborative goal-setting session with the organization’s leadership, identifying areas for improvement over the year ahead. Grantees are then provided not only with funding, but also with connections to best-in-class pro bono partners to provide services and expertise otherwise inaccessible to most poverty-fighting organizations. 

At the end of the grant cycle, we conduct an updated benefit-cost analysis and qualitative evaluation, which together serve as an application for renewed funding. If progress has been made, the process is repeated, with the goal of building long-term partnerships focused on scaling poverty-fighting impacts in the Twin Cities.