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Future Of Philanthropy

"Big Bet" Philanthropy Can Pay Off Remarkably, But Remember It's A Bet

A new report explains how foundations can make true social change by putting up a lot of money for one cause.

"Big Bet" Philanthropy Can Pay Off Remarkably, But Remember It's A Bet

[Photo: Pavel Mitrofanov/iStock]

The world’s wealthiest philanthropic donors are suffering their own so-far incurable problem: They’re allergic to making big bets, gifts of over $10 million to social change issues.

The technical term for this is called the "aspiration gap." It was coined by Bridgespan, a consulting firm for nonprofits and philanthropists, which has found that while roughly 80% of the world’s most wealthy and seemingly nimble donors—those who’ve committed to the Giving Pledge or are regularly listed among Forbes Top 50 donors—say they’re interested in tackling social change issues, only 20% follow through.

That might change now that there’s a big-bet primer: Bridgespan has released a new report auditing the decades long big bets of Atlantic Philanthropies, whose founder, the duty-free shop billionaire Chuck Feeney, inspired the "giving while living" movement. The limited life foundation, which initially started in 1982, plans to give away a total of $8 billion by the time it dissolves in 2020. (Full disclosure: Atlantic is also funding Fast Company's philanthropy coverage).

According to Bridgespan, 60% of Atlantic's grants could be big bets, and 30% went to social change. No one’s running the table, but it’s a start.


According to Bridgespan's report, the real problem is that social change is messy. There generally aren’t ready-baked processes to improve things like basic human services, the environment, and international development, or make educational and institutional gifts geared directly toward anti-poverty or disease eradication solutions for low-income people.

For those with the deepest pockets, finding the right partners or programs can be hard, as is tracking progress. Long term change also requires long term investments, which means placing trust in a group that may not have a totally proven track record—or funding your own, which becomes equally complicated.

That doesn’t mean people aren’t trying: Billionaire J.B Pritzker is making great strides in early childhood development. The Bill & Melinda Gates Foundation, whose work was excluded from Bridgespan’s findings because it is such an outlier, has practically outspent all of major social change donors combined.

For those willing to go all-in to help others, it provides a rulebook for what’s working (and what doesn’t).


1. Look for funding gaps and leverage them.

Several decades ago, Ireland was suffering from a sub-par university system that caused many researchers and students leave the country. While Feeney, an Irish-American, had already invested heavily in improving education, he was seeing a glacial change. He met with the government and offered $125 million, if they would match it. They ended up putting in a total of $176 million to create six times that in government funding.

That led to 46 research institutes or programs, 1,000 research positions, and 1,600 new postgraduate positions. Innovations coming out of the space now contribute far more to the economy than the initial investment.

Study co-author William Foster, a Bridgespan partner, calls this the "but for" approach: "But for Atlantic this other stuff wouldn’t have happened," he says. In this case, that meant being able to push for matching funds. Atlantic has used a similar strategy to improve community health clinics in Vietnam, after proving success in two provinces, and then asking other provincial governments, and at times the national government, to buy-in.

2. Offer unrestricted support.

To encourage other donors and groups to become more ambitious, Atlantic spent $54 million on professionalizing the nonprofit sector. Their work started in the early '90s, but that figure jumped to $200 million over time. That included grants to groups like Urban Institute and GuideStar, who pioneered collecting and making publically available the sort of tax and performance data that allows donors, grantees and watchdogs check and measure success.

Because the funding was unrestricted, GuideStar was able to grow steadily while figuring out its own funding model. Atlantic also supported Bridgespan with early funding. The limited life foundation helped start or supported emerging nonprofit programs and research centers and major universities including NYU, Indiana University, and Harvard. Within 10 years, the total number of graduate programs quintupled. (They’ve also pioneered a similar "infrastructure-first" to help LGBT rights groups in Ireland.)

"For most of their history… when they backed you, they backed you," Foster says. "They picked a leader and a cause and have unrestricted money because they trusted you. It’s what people in this sector will often say is the right way to do things, but it’s very unusual behavior."

3. Seek Help: Staying flexible aids success.

In 2005, the juvenile death penalty was overturned. Atlantic had backed a part of that effort but wanted to invest more heavily in a push to overturn capital punishment completely. Except the battle plan to do so was extremely complicated. Battles have to be won on a state-by-state basis, with hopes of pushing a Supreme Court resolution. Rather than fund groups directly, Atlantic gave $59 million to Proteus Fund, which had been engaged on the topic for years and better understood the landscape.

Eventually, they created the Atlantic Advocacy Fund, a 501c4 that supports more politicized voter lobbying efforts, as opposed to research or litigation. There’s far more work to be done, but since 2007 that big bet has played a role in seven states abolishing the death penalty, and four enacting a general stay-of execution. In 2015, total number of executions and death penalty sentences reached an all time low. "Such collaboration may be more complicated than going it alone," the report notes, but ultimately worth it.


One of Bridgespan’s main reflections is that Atlantic may not have remained engaged long enough in some cases to make the impact it initially intended. Why? In general, researchers agree that it takes about a decade for societal changing projects to make a lasting impact. But in Atlantic’s case, some programs seem to have shifted as their leadership changed. "The most really ambitious social change takes longer to play out than the average tenure of a CEO, " Foster says.

Atlantic’s president and CEO Chris Oechsli agrees with that. Since taking over the group in 2011, he's tried to abide by two rules. "One, see it through," he says. "Two, be careful in your transitions as you adjust your grant making strategy to not leave untapped potential on the table."

But Oechsli cautions agencies to be careful about grading themselves against equally ready-made metrics for success. Technically, Feeney’s university building efforts in Ireland, among many other progressive investments, don’t qualify under Bridgespan’s definition of a social change project. They were reviewed because they represent a hugely successful big bet, but not one that created direct social change.

Oechsli prefers to think of such programs as "indirect investment." In this case, Ireland probably groomed a fair amount of academics and entrepreneurs, who will go on to work in the field. (Either way, the experience affected Atlantic’s institutional learning curve for such ventures.)

Groups should be cautious about defining themselves too much by "bright line" metrics, he says—those that unnecessarily segregate what works and what doesn’t perhaps a little too neatly. "Does an investment in those types of experiences not count? I don’t know, that’s a question," he says. "You never stop learning and implicit in that is [the idea] that to be effective and make big bets requires being comfortable with risk."

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