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Carolyn and Peter Lynch Look for Outsized Returns in Their Philanthropy

Under Peter Lynch, Fidelity Investments' then-obscure Magellan Fund rose from $18 million in assets in 1977 to $14 billion by 1990, when he stepped down as manager. Average return: 29.2%. Peter and Carolyn Lynch have sought similarly outsized results from their philanthropic dollars. Using Peter's famous dictum of "invest in what you know" – the Lynches fund startup organizations that have potential to create "dramatic change in the world." Carolyn notes, "Peter and I are willing to take a risk. We don’t have all hundred-baggers…Sometimes they just don’t work. But when they do it’s a really exciting payoff."

The Lynches’ willingness to fund early stage nonprofits has helped uncover several nonprofit success stories. For example, Dr. Paul Farmer’s Partners in Health was a pilot program waiting-to-happen when the Lynches first came in contact with the NGO. "The trials that we funded for four years proved the success of the [health care] delivery system that Dr. Farmer had envisioned and the Gates Foundation adopted the program, made it part of the World Health Organization Initiative, and gave them $42 million to endow the program," says Carolyn. She adds, "As a consequence of our seed funding, the program has expanded to 12 countries worldwide and has saved millions of lives. And that’s exactly the kind of thing that we look for in philanthropy."

The Lynches’ interest in high leverage philanthropy has motivated a focus on early education as well. Peter notes, "People are giving major grants to give scholarships. That’s too late in a lot of people’s lives…so we focused on elementary education and Pre-K." Carolyn adds, "Education is extremely leveraged. You get a child when they’re young…they have, then, the rest of their life, those skills to use."

While the Lynches are excited about helping high-potential initiatives grow, they are not afraid to make a big bet when the right opportunity arises. Take for example the $20 million gift, the largest in the Lynch Foundation’s history, to kick off the Lynch Leadership Academy at Boston College, a program largely dreamed up by Carolyn, whose father was a school principal. "When I looked at principal training…I found almost nothing to help someone make the transition from teacher to principal," Carolyn recalls.

When reflecting on the role that philanthropy has played in their lives, the Lynches agree that it has had a significant impact. "Philanthropy’s really made us feel great," Peter says. "It’s changed our life. We can see the benefits…It’s probably one of the best things we’ve ever done in our life."

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