Boston, MA—May 11, 2017—The Bridgespan Group today published a study
in Stanford Social Innovation Review
(SSIR.org) that examines 10 distinct ways to place a big philanthropic bet (defined as $10 million and above) on social change. Six types of bets emerged as least prevalent, collectively accounting for just one quarter of big-bet dollars granted to fund social change. According to William Foster, Bridgespan’s head of consulting and author of the study, “Though they can have extraordinary impact and despite the fact that most donors aspire to affect social change, big bets on social change are heartbreakingly rare. One reason for this gap between aspiration and action is that when philanthropists, and those who help them, think about making big bets, they naturally focus on what
they are trying to achieve. The less examined piece of the puzzle is how
to deploy their resources.”
One of Foster’s co-authors, Bridgespan Partner Gail Perreault added, “Just as in the world of business, in philanthropy some approaches are simply more promising than others to achieve a given goal—in this case, impact. For a successful big bet to occur, it must be both a promising way to address a problem and
a good match with the donor’s engagement model.”
As an example of a successful approach, the article cites Julius Rosenwald’s (of Sears, Roebuck & Co.) early 20th
century investment in building a field to educate African American children in the South. Working in partnership with Booker T. Washington, Rosenwald contributed start-up funding ($70 million in today’s dollars) and succeeded in drawing in money from state and county governments. These efforts dramatically shrunk the gap between the region’s races in years of school completed.
Bridgespan’s research uses this and other examples to illustrate 10 types of big bets donors have employed and shows how those approaches vary in prevalence. Four types of bets, including funding ongoing operations and founding an organization, captured the lion’s share of philanthropic giving. Endowing an organization, waging an advocacy campaign, and providing growth capital were among the six types that donors used relatively less widely.
Bridgespan’s research also showed that before a big bet is made, a median of four smaller grants precede it, with the big bet typically being 10 times the size of the previous grant. Moreover, the authors note that the big bets nest within a broader arc of social change that is best measured in decades, not years.
“We undertook this research in part because we suspected that donors wanting to make a big bet have more tools than they may realize—in fact, it is often the rarest big bet types that drive the sector’s most important success stories,” said Elise Tosun, a Bridgespan case team leader and third co-author of the work. “We’re hopeful that deepening understanding of them can help donors achieve their philanthropic aspirations by betting big and having bigger impact.”