Safe-Bet vs. Big-Bet Philanthropy
The biggest bet dollars are going to the safest bet organization.
In 2015, Stanford Social Innovation Review wrote a report on the state of “big bet philanthropy” (donations in excess of $10M). They reported that only 20% of those philanthropic “big bets” went to social change; the remaining 80% was institutional giving to universities, hospitals, and cultural institutions.
Since then, there’s been more focus on big bet philanthropy (including this series of articles), but it strikes me that these big bets are more big than bet. They’re defined by their size, not by their audacity. The problem is that the organizations that can absorb a big bet are inherently not big bets. They’re safe bets because they are large and established institutions with lots to lose by making an actual big bet and deviating from their status quo. For example, the MacArthur Foundation just released the 100 finalists for its $100 million big bet grant.
I spent an hour last week reviewing the finalists and looking at their annual budgets. 90/100 finalists had a budget greater than $10M (contrast that with the statistics above about the distribution of nonprofits by budget size). I am a big admirer of the MacArthur Foundation for many reasons, and I do see merits in safe philanthropy where the impact is so proven and expected that little risk appetite is needed, but they have created a prize that is only accessible to the largest ~1% of nonprofits.
In doing so, are we relying on the biggest behemoths in our social impact space to lead the charge in risk-taking? Call me a small-scale ranter, but I believe we need to make big bets at every level of investment. Sometimes those who are taking the biggest risks are working for the smallest organizations simply because the largest and most well-established non-profits are designed to be incompatible with that level of risk-taking.