Big Bet Philanthropy: What Have We Learned And What Are We Doing About It? 

Created By: Craig Shelley, CFRE
October 16, 2024

‘Big Bet Philanthropy’, defined by AI as, “the practice of making a large, unrestricted donation to a nonprofit organization with the goal of transforming a sector, issue, or the organization itself,” has put significant capital in the hands of some of the world’s most dynamic change makers. These dollars are backing fundamental and systemic change across issues areas.  From MacKenzie Scott’s much-publicized efforts to fund historically marginalized leaders advancing social change, to our former client Co-Impact’s work driving systems change and gender equity across the Global South, to Blue Meridian’s work advancing organizations serving children and families in the United States, there is no question these investments are moving the proverbial needle. 

 In our conversations with ambitious leaders tasked with implementing these investments, there are persistent concerns about what comes next. The “funding cliff” as our friends and former clients from One Acre Fund, Matthew Forti and Claire McGuinnes, called it in their June SSIR article, is looming. What can the mega-philanthropists behind big bets and ‘doers’ do to ensure the sustainable impact and outcomes we all desire from the nonprofit sector? 

Philanthropists  

Make Longer Bets 

This will take time. Every major issue attracting big-bet philanthropy stems from generations of neglect. Nonprofits need ten-year, $200M commitments far more than two-year, $50M grants. Yet too often, funders—and the accountants and finance executives they share with nonprofits—are hesitant to commit beyond three to five years. That needs to change if we expect organizations to tackle challenges like climate change and equity in public education. 

Require and Provide Resources for Capacity Building 

The unrestricted nature of big-bet funds is central to this movement. Leaders closest to the challenges nonprofits face are undoubtedly best positioned to allocate those resources. But is there any question that if some of the nonprofits funded by MacKenzie Scott’s first round of giving during the pandemic had been required to invest part of those funds in refining their strategy or building fundraising capacity, they’d be in a stronger position today? 

Grameen America, an organization we’ve partnered with at various points as they’ve accelerated fundraising and scaled their important work, has successfully leveraged numerous big bet gifts during their journey.   While their success is largely due to the talent of their leadership and the strength of their program model, before receiving their largest gift to date—$85M from Blue Meridian—and launching their most ambitious fundraising effort, Blue Meridian required and funded their participation in a rigorous strategic planning process to ensure the gift’s successful deployment. These types of supports should be baked into big bet gifts, even if it means restricting some portion of the funds. 

Secure Follow-on Funding 

Philanthropists can help big bet recipients avoid ‘the cliff’ by securing follow-on funding right from the outset. Funders have an obligation to ensure they’re fostering a thriving ecosystem, which could be strengthened by better collaboration and agreements to step in and support the most impactful organizations at different stages. Why couldn’t a $50M, five-year investment come with a commitment from an additional funder to cover the next five-years, contingent on meeting benchmarks created by the nonprofit in agreement with the funders? 

You can start to imagine a future where longer commitments, with designated funds to help organizations sustain and navigate growth, and the potential for follow-on funding from other philanthropists, lead to far greater outcomes. 

Nonprofits/Doers 

Invest in Fundraising 

Much of the evolution in nonprofit management and funding over the past twenty years has been rooted in efforts to replicate for-profit business practices. From the “social entrepreneur” movement which gave rise to many of the sector’s most impactful organizations and leaders, to the current era of big bets, there’s been an ongoing belief that there’s always a ‘better way’. While this may be true, we must ground our vision for a more abundant sector in the understanding that philanthropy is both necessary and different. There are no shareholders, and all but a few nonprofits will remain dependent on the philanthropic market for the entirety of their existence.   

I’ll point again to the SSIR piece from Matthew Forti and Claire McGuiness that I referenced earlier. They highlight how One Acre Fund has committed to growing their fundraising capacity by investing in development staff at the same rate as their program staff. I’ve never heard it framed quite that way before, but my immediate reaction was, “duh.” This simple truth seems to consistently elude the sector. Of course, growth requires continued investment in all forms of “overhead”, but to succeed in the long-term, your fundraising team must scale at least as quickly as your program team.  Just as a for-profit organization can’t grow without sales and marketing, how can a nonprofit scale without fundraisers? 

Collaborate 

Our friends at Panorama Global have been working to convene, learn from, and activate leaders from organizations they call ‘double winners’– nonprofits that have received investment from both the Skoll Foundation and MacKenzie Scott. The premise is that these organizations have been extensively vetted, received significant capital at various stages, and are either successful or poised for growth.  As this group has gathered, it is evident they are speaking to each other too infrequently and have never presented a united front to donors. The team at Panorama has started to ask the question, ‘What would it take to ‘fully’ fund these organizations collectively to achieve their goals?’ Could these organizations approach donors together for the big bet(s) required to accomplish so much progress across so many missions? 

A joint ask at this scale – spanning global organizations and multiple issue areas – might seem like a stretch, but there is benefit to collaboration. A united front to donors would help make these big bets more streamlined and effective. We’ve clamored for donors to collaborate and pool their funds for greater impact.  So why shouldn’t the recipient, doer organizations do the same? 

As Cecilia Conrad of Lever for Change and the MacArthur Foundation notes in her May 2024 SSIR article, the number of philanthropists willing and able to make these kinds of investments are growing. This growth will fuel unprecedented opportunity for the sector. The suggestions outlined above, along with others, can help ensure this opportunity is not just transformational, but also sustainable. 

Orr Group can help your nonprofit build and implement fundraising plans that are as transformational as they are practical and actionable. If you’re looking to amplify your impact, get in touch with us today.

Craig Shelley, CFRE is a Partner and Chief Growth Officer at Orr Group. Craig advances the missions of nonprofits by bringing a change-management and entrepreneurial approach to strategy, organizational development, fundraising, and board optimization.