Most Major Donors Say They Seek Social Change, But Only 20 Percent of Philanthropic Big Bets to Go To Such Causes

11/19/2015 |


Report by The Bridgespan Group surfaces an “Aspiration Gap” in donor gifts over $10 million, and suggests ways grantors and grantees can bridge it

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Boston, MA, November 19, 2015—There is an “aspiration gap” between what major donors say they would like to achieve and where they direct their largest gifts, according to “Making Big Bets for Social Change,” a new report by The Bridgespan Group just published in the Stanford Social Innovation Review.
In the study’s review of the public mission statements of more than 100 major donors, 80 percent expressed some form of social change among their top goals—be it providing better educational opportunities for people in need, eliminating disparities in health care, reducing genocide or reforming criminal justice.
Yet between 2000 and 2012, just 20 percent of reported philanthropic “big bets” of $10 million or more, by US-based donors, went to organizations or initiatives for social change. The rest went largely to institutions like universities, hospitals and cultural organizations.
The Potential for Big Bets to Fuel Big Change
“There is no shortage of generosity in American philanthropy, which is to be celebrated,” said William Foster, head of the consulting practice at The Bridgespan Group and co-author of the report. “But the gap between philanthropists’ social-change goals and the direction of actual giving is striking.”
“Where big bets for social change do occur, they make a tremendous difference,” added Gail Perreault, Bridgespan senior director of knowledge and a co-author of the study. “If you scratch beneath the surface of most major social advancements of the past few decades, you will find one or multiple gifts of $10 million or more.”
What’s Holding Grantmakers Back
The study acknowledges that philanthropy oriented toward social change is genuinely difficult. “When a philanthropist gives a major gift to a university, they know they are going to get their name on a building or professorship,” said Bridgespan philanthropy practice manager and study co-author Alison Powell. “Universities and hospitals have mechanisms in place to offer potential donors numerous ‘shovel-ready’ opportunities in need of funding—and you can clearly see the result.” Making a big bet on education reform and measuring its effect, on the other hand, is less straightforward.
Another inhibitor is networks. Whereas university alumni have a built-in relationship to their alma mater, personal relationships between philanthropists and nonprofit leaders can take years of hard work to nurture.
“Funding social change takes a different mindset,” said Bridgespan partner and report co-author Chris Addy. “Philanthropists who do make successful big bets on social change have often approached their philanthropy more like venture capital, investing significant time and effort in finding the ‘deal’ and knowing that not all big bets pay off. They move beyond an institutional mindset, rediscover their audacity, and embrace risk by making big bets.”
Evidence That Big Bets Bring Results
The report describes the $15 million, three-year commitment by Gap, Inc., founders Don and Doris Fisher to the Knowledge is Power Program (KIPP), at the time of the gift a small, results-oriented charter school operator with only two schools up and running. The contribution was three times KIPP’s annual revenue. Today there are 70,000 students, largely low-income, enrolled in 183 KIPP schools nationwide. KIPP students graduate from college at four times the national rate for low-income students. KIPP’s success has helped drive the nationwide charter school movement.
Big bets, the report notes, have fueled social movements ranging from the rejuvenation of US conservatism in the 1970s, to the global Green Revolution, to the advancement of LGBT rights in the past decade. Of the 12 “winners” in Forces for Good’s assessment of nonprofits—a list that included the Environmental Defense Fund, City Year and Share Our Strength—11 received a big bet.
New and Old Philanthropy Betting Big in 2015
Recent and current high-profile big bets have the potential to magnetize others, the report notes. Donors placed a number of big bets in 2015, including a $25 million grant Cari Tuna and Dustin Moskovitz (the youngest couple ever to sign the billionaires’ Giving Pledge) made to GiveDirectly, a nonprofit helping people in extreme poverty to proven advancement across a range of outcomes. Major foundations are also betting big on social change, as evidenced by the John D. and Catherine T. MacArthur Foundation’s recent decision to focus its resources on combating climate change and reforming the criminal justice system. 
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