The ethos of venture capital suffuses commercial life in the San Francisco Bay Area and even affects how people approach social problems. Venture philanthropy, as it's called, aims to apply the basic principles of venture capital -- a scalable business model, technologically based solutions and entrepreneurial expertise -- to the traditionally staid world of charitable giving. But the philosophy has its limits, as Peter Werner has seen in his work for Full Circle Fund.

Full Circle is a so-called engaged philanthropy organization that focuses on three areas -- education, the environment and poverty -- and tries to make a difference in those sectors by donating money and its members' time and expertise to institutions it feels can have an outsized impact. Werner, a 37-year-old VC partner at Cooley LLP in San Francisco, is a passionate advocate for Full Circle, serves on the organization's board and has done pro bono legal work for it since 2005.

Werner is especially proud of Full Circle's work with La Cocina, a self-described "incubator kitchen" in San Francisco's Mission District whose focus is helping low-income cooks, many of them Latinas, start their own businesses. La Cocina last year asked Full Circle for help in making the program more effective.

The charity formed a group of advisers that responded in three ways. One subset of volunteers connected La Cocina with new sources of capital, including the Opportunity Fund and Kickstarter Inc., a Web-based crowd-sourced funding platform. Another made suggestions to improve the program's structure, while a third looked at forming partnerships with other institutions to raise La Cocina's profile.

Meanwhile, Full Circle is involved in education in the Bay Area, says co-founder and board member Josh Becker. He notes that Full Circle has been trying to create a network of four charter schools and is currently working on a number of projects with the Oakland, Calif., public-school system that includes "a teacher evaluation system that has teeth and that teachers and administrators can live with and are excited about." Such reforms can be challenging, Becker acknowledges. But like a VC firm, he says, Full Circle accepts that "if we don't have some failures, we're not taking enough risk. We do have some startup organizations and ideas that haven't worked, and we're OK with that."

Other analogies to nonprofits are more problematic. "It's a tough environment to scale for nonprofits," Werner says. "National or multicity expansion is very challenging right now. That's a proxy for there not being a lot of money for these organizations."

There are also limits to quantifying social returns. "What we've concluded is that there are lots of qualitative ways to figure that out," Werner says. "You know it when you can see it -- know how an organization has grown, how many people it's touching, or in the case of La Cocina, how many people are going through the program. But it's not like we're getting a check in the mail. We measure our returns differently. When we think of portfolio value, we think of social impact."