I Gave Away $700 Million. Then I Tried to Raise $350,000.

September 29, 2025. I was at my desk in our backyard cottage in Oakland, late, Sally Steele in the house doing her own work. Fifteen clicks deep into Vanguard's withdrawal screens. About to pull $100,000 from our retirement.

It was terrifying. This was our retirement.

2025 had been a brutal year for nonprofits, and a brutal year for me. I'd spent it scratching for consulting clients, on unemployment for the first time in my life. One client reneged on a success fee the moment it looked like it might trigger. Another had me working for six weeks before I walked away from a contract their lawyers wouldn't finalize.

Sally was running Outdoorithm, the social enterprise we co-founded to get more families outdoors, and she wasn't paying herself either. Four daughters, ages 4 to 16, all sharing one bathroom in a small craftsman. Money going out faster than it came in.

I was already $50,000 in on Kindora, the AI fundraising platform my friend Karibu Nyaggah and I had launched months earlier. It was working. Fifty nonprofits signed up off our first LinkedIn post. A VC-backed company offered to acquire us. A private equity firm called. Another VC asked if we were raising. The private sector was happy to give us money.

What I wanted was $350,000 from the sector I'd spent my career building. At Google.org I'd directed a team that gave away over $100 million a year. We rarely made grants this small. I knew the people running the major foundations on a first-name basis.

That check wasn't going to come from any of them.

I clicked transfer. Closed the laptop. Some of the money pressure rolled off. The pit in my stomach didn't. We were spending our acorns while everyone else around us was stacking them.

The phone calls

I'd already made every call I knew to make.

Right after we launched, I started reaching across my philanthropy network. Friends I'd worked alongside for years. People I deeply respect, who had seen my work up close. The pitch was simple. We bootstrapped this with our own money. The private sector is circling. We'd rather take investment from mission-aligned funders.

One conversation stays with me. A leader at a major philanthropy told me he'd personally invest his own money. He said people in philanthropy rarely get the chance to participate in deals like this. I appreciated the vote of confidence. But I wasn't looking for personal angel checks yet. I was looking for institutional capital. The kind of patient, mission-aligned investment his organization existed to deploy. That path didn't open.

The pattern was consistent and well-intentioned. They pointed me to earned revenue and ended the conversation.

The tools to invest in mission-driven startups exist, they're just rarely used. It's not that funders don't care, it's that precedent is thin and teams are reticent to introduce more risk and complexity. For most funders, the playbook hasn't been written yet.

The VC trap

While the philanthropy calls were going nowhere, I was studying venture capital. Hard.

September 2025. Same month I was making those calls. I was at Responsible Innovation Labs' EDGES gathering in San Francisco. Roy Bahat, managing director of Bloomberg Beta, was on stage. During Q&A I asked whether he'd raise VC if he jumped back into founder mode.

His answer didn't take long.

"The only good reason to raise VC is you have no other choice."

Six months later I heard the long version of why. In March, at SXSW, I sat in a founders house and listened to Dug Song. He co-founded Duo Security, Michigan's first tech unicorn, acquired by Cisco for roughly $2.35 billion. Before Duo, he co-founded Arbor Networks. That story went differently.

Arbor raised over $120 million in VC. A $100 million acquisition offer came in year three, but the capital structure made it impossible for the founders to take it. The company was eventually acquired at terms that gutted the founders. Song made less than the employees of a company they'd been forced to acquire. He had to leave the company he started.

"Every dollar you raise creates a valuation hurdle you must clear," he told us. Raise $10 million when you only need $2 million, and you've pushed your milestones so far out that missing them kills your optionality.

Bahat had named the verdict. Song had shown me the math.

The no-man's land

Here's the conundrum for founders building technology for the social sector.

You can take VC. For the right company, it's rocket fuel. But most businesses don't need rocket fuel. They need regular gas. They need to drive somewhere, serve customers well, grow at a sustainable pace. For tools meant to be accessible and durable, signing up for rocket fuel means signing up to become a billion-dollar company or go bust.

Many funds today want 10x year-over-year growth. If you're not on that curve, you're not attractive. And 10x growth means you can't maintain culture or consistent staff. In the social sector, mission comes through culture, through relationships, through people. Try growing that by 10x every year.

You can become a nonprofit. But then you can't offer equity to attract talent. You can't share in the upside if you succeed. And philanthropy has a poor track record of sustaining technology investments. I watched this play out at Google over and over. Nonprofits building technology that never reached the scale or quality of for-profit alternatives.

You can bootstrap. But you need some capital to get started. The people closest to the problems worth solving are often the least likely to have wealthy networks of angels willing to write checks. Or retirement accounts to drain.

When I asked Katie Boland at Delta Fund about alternative structures, she put it plainly. "All of the above are good, but not good for everyone." There's no central clearinghouse. No established playbook for founders building for-profit, social-purpose technology.

What the data actually shows

Foundations move $110 billion a year in grants. They deploy $1.4 billion a year in program-related investments. About one cent on the dollar in mission-aligned, repayable capital designed for companies like ours.

I know this because we built it. Kindora's database covers three years of IRS filings. More than 170,000 foundations. Nearly 7 million grants. Every program-related investment U.S. private foundations have reported. The pattern isn't subtle.

That penny is heavily skewed. The biggest foundations (Gates, Ford, MacArthur) make most of these investments. Of 5,363 U.S. foundations holding more than $100 million in assets, only 193 made a PRI in the last three years. That's 3.6%. More than 96% of large foundations aren't using a tool that's been legally available for decades.

Where the money does flow, it goes to housing and community lenders, not technology. Across three years of filings, we identified 26 direct PRIs to for-profit technology, software, or AI companies. About $50 million total, out of $4.2 billion in PRI volume over that period.

Three checks account for $43 million of that $50 million. Two PRIs from Steele Foundation for Hope (no relation) to Sibel Health and Zenysis Technologies, $38 million combined. One from the Gates Foundation to Osmo Labs, $5 million. Strip those three out and you're looking at $7 million scattered across 23 companies, most under $500,000.

Steele Foundation for Hope is interesting. A New Hampshire family foundation founded by Stuart and Suzanne Steele in 2022, explicitly built around deploying PRIs to for-profit companies as its primary mode of giving. When a foundation is structured this way, it can write $25 million checks. The fact that almost no other foundation in the country operates this way is the story.

The Richard King Mellon Foundation in Pittsburgh is the other standout. They make 10+ investments a year in the $150,000 to $500,000 range, directly to early-stage tech companies. Marinus Analytics, an AI anti-trafficking startup. Peoples Energy Analytics, an energy bill assistance platform.

Then we ran one more search. We looked through every PRI to a for-profit tech company in our database for one specific thing: companies building technology for the nonprofit and philanthropy sector itself. Grant management software. Donor databases. Fundraising platforms.

We found one. A $250,000 investment from the James Lee Sorenson Family Foundation in Chario, an early-stage giving tool. One adjacent match, Brighthive ($50,000 from Lumina), builds data infrastructure used by nonprofits, government, and education providers. That's it.

A sector that manages $5.7 trillion in assets and distributes $110 billion in grants every year is not using its own investment tools to fund the technology that powers its own work.

The void didn't stay empty. VC filled it. Every for-profit software company that scaled in philanthropy took venture capital or private equity. Instrumentl. Fluxx. Submittable. Bonterra. Classy. Daffy. The tools got built for the customers VC cares about, not the 85% of nonprofits priced out at $300 to $500 a month. That's the bill that comes due when philanthropy doesn't fund its own infrastructure.

I'm not pointing fingers. In ten years of grantmaking at Google.org, I only ever made a handful of ER grants. Zero PRIs. I made the case to leadership for building a PRI portfolio. It didn't happen. Even with the right experience and a strong conviction about why it mattered, I couldn't get one off the ground.

Why AI changes everything

Here's what gives me hope.

My wife and Outdoorithm co-founder Sally studied Foreign Affairs and French. She's pushing code now. During Black History Month, she decided to add heritage badges to campgrounds on the platform that had significance in the Black experience. She wrote the API calls. Tagged the data. Created the icons. Deployed it herself. A year ago that would have required a developer.

What used to take a 50-person engineering team can now be built by two or three people with domain expertise and AI tools. We built Kindora's core product in a week. The cost of creating world-class software has collapsed.

This changes the math. With a lean team, you reach profitability faster. You grow through revenue instead of fundraising. A $10 million to $50 million company becomes viable and desirable, not a consolation prize.

The technical wall fell. The capital moat didn't.

Revenue-funded doesn't mean zero-capital. You still need a bridge. By the time we closed our first outside check, we were $80,000 in. There are server costs. AI inference costs. And eventually you need to pay people. The bridge from $0 to sustainable revenue is 12 to 24 months. That bridge capital is exactly what the social sector's capital stack doesn't provide.

What could work

The instruments exist. Many people in the sector don't understand how they differ. Three are worth knowing.

Recoverable grants. A founder gets, say, $100,000 that gets paid back only if the company hits specific revenue thresholds. If it doesn't work out, the grant is forgiven. The money that comes back funds the next cohort. Echoing Green pioneered this. It's the closest thing the social sector has to "believe-in-you money." But Echoing Green can do it because of how it's structured legally. Most foundations can't copy the model directly.

Expenditure responsibility (ER) grants. A foundation can grant directly to a for-profit company. The catch: every dollar must go to a specified charitable activity, and the foundation has to monitor compliance. The McGovern Foundation has made this work at scale, with 70+ recent ER grants to for-profit technology and data companies. Climate Policy Radar got $500,000 for AI-powered legal research. Open Function Group got $400,000 for open-source data integration. The legal path exists. McGovern walked it. Few followed.

Program-related investments (PRIs). This is the tool that should be doing the heavy lifting. A PRI is an investment, not a grant, where the primary purpose is charitable. It counts toward the foundation's required annual distribution. It can be structured as equity, a loan, convertible debt, or revenue-based financing. If the company succeeds, the foundation gets its money back. If it doesn't, the foundation writes off the investment. Same outcome as a grant, with upside potential.

When most people say "PRI," they picture a below-market loan to a housing developer. But a PRI can also be a forgivable loan: zero percent interest, forgiven if revenue triggers aren't met. That's exactly what an early-stage founder needs. Sorenson Impact runs an active portfolio of 35 PRIs totaling $5.2 million in education, health, and financial inclusion. Back in 2017, Kresge made an early PRI to Fluxx, a grants management platform built for the philanthropy sector itself. These foundations figured it out.

Donor-advised funds can deploy these instruments too. Americans hold $250 billion in DAFs. Most of it isn't moving fast enough.

Camelback Ventures provided Kindora with a $50,000 SAFE note that was, frankly, a lifeline. Patient capital from a mission-aligned investor who would be happy if we had massive impact even if the financial return was modest. That's the spirit of what's needed. We just need it at a scale that doesn't require founders to get lucky.

The model that works for companies like ours is straightforward: revenue-funded in the long-term, mission-bridged in the near-term. The free tier of our platform, serving nonprofits who can't afford existing tools, is a genuine charitable project. Fundable through any of the three tools above. The paid products are a real business. The bridge capital buys the runway from zero to sustainable revenue. If the company succeeds, the capital recycles. If it doesn't, the charitable work still happened.

By April 2026, Kindora was serving over 700 organizations, with an Anthropic partnership that offered free open grant searches in Claude. Revenue was picking up. We weren't asking to start. We were asking for the bridge.

The call

At The Light House at SXSW, hosted by Omidyar's Tech We Want team, Jessica Norwood gave me a name for what was missing. "Believe-in-you money." Reparative capital that says, "I think you should have a shot at trying."

That's what's missing from the social sector's capital stack. Not because people don't believe in founders. Because this is a muscle the sector has rarely exercised. Backing mission-driven founders, at the early stage, with patient capital, in for-profit structures.

This isn't just about Kindora. It's about hundreds of founders building social-purpose technology right now, facing the same impossible choice. People closest to the problems but cut off from the patient capital to solve them.

The sector's response so far has been more reports and more convenings. Long guides on how to fund AI. Coalitions still debating what to fund and how. Meanwhile, founders are draining retirements.

I understand the reflex because I lived inside it. When a decision felt risky, the safest move was another framework. Another report. Another convening. Those tools can clarify a decision. But too often, they become a way to avoid one.

Stop convening. Start writing checks.

Set aside 5% of your annual grants budget for forgivable PRIs or ER grants. As a start. $100,000 to $500,000 per check to founders building social-purpose technology who need the bridge from $0 to revenue. Capital that comes back recycles into the next cohort. The rest is a grant, like the other 99% of foundation funding already is.

Don't overthink it. Define the impact you want to see. Set up the vehicle. Get the money out the door. Learn. Repeat.

Publish the terms when you deploy. Diligence memo, term sheet, repayment triggers. Make the next foundation's first program easier than yours was.

You don't need investment managers squeezing every dollar of return. This is just a grant that might recycle.

We're living through a once-in-a-generation shift. The cost of building has collapsed by an order of magnitude in 24 months. A platform that used to cost millions and a team of eight now costs $100,000 and a founder with the right tools. Domain experts who were locked out of building for their entire careers can finally create what their communities need.

Foundations move $110 billion in grants every year. About one penny on the dollar gets deployed as a PRI. The cost of leaving that gap open is that we keep sending the founders closest to the hardest problems into a capital market designed for someone else.

Someone has to go first.

If you sit inside a foundation, who deserves a shot at trying?

Justin Steele is co-founder and CEO of Kindora, a Public Benefit Corporation using AI to help social-sector organizations find and win funding. He previously directed nearly $700 million in philanthropy at Google.org over a decade and serves as a trustee at The San Francisco Foundation. This piece was originally published on LinkedIn.