No More Excuses: Has the MacArthur Foundation Paved the Way for a New Era of "Big Bets?"

Syrian refugee children.  Photo: Din Mohd Yaman/shutterstock

Syrian refugee children.  Photo: Din Mohd Yaman/shutterstock

The MacArthur Foundation’s “big bet” competition for a $100 million grant—which I’ve criticized in the past—wrapped up this week with a positive twist.

The foundation not only announced that the money will go to a critical and underfunded cause—helping Syrian refugee children—but that it had partnered to create a proposal bank of “big bet” blueprints that will make it easier for other deep-pocketed funders to give on a larger scale.

This second piece is really important. And it helps redeem MacArthur's 100&Change initiative, a well-intentioned but flawed experiment. 

For years, donors have been complaining that it’s hard to find worthy nonprofits that can absorb large grants. A billionaire philanthropist told me this himself once, claiming very few organizations would know what to do with an extra $100 million. Two years ago, Bridgespan released a report saying that other wealthy donors felt the same way. 

I’ve always thought this argument was suspect. As I’ve previously written, if you look just at organizations working on global health and development, as well as humanitarian relief, you’ll find plenty of effective groups with budgets over $200 million and long wish lists as they seek to solve critical problems. Many smaller organizations doing great work, both in the U.S. and overseas, could be scaled up to operate on a much higher level—just as venture capitalists rapidly scale up startups all the time.

What’s missing, I’ve suggested, are not nonprofits that can do a whole lot of good with mega-gifts; its foundations and major donors ready to make such big bets. And the reason for that hesitancy, I believe, has been that many funders aren’t content for their money to have an impact in some general positive way; they want to bankroll specific things that wouldn’t happen without their money. They want to feel a sense of personal or institutional efficacy from their giving. 

What this means is that many mega-funders aren't interested in, say, giving $100 million to UNHCR to keep people from starving to death in Somalia. Or giving $100 million to the Global Fund to Fight AIDS, Tuberculosis and Malaria to save lives in West Africa. Or writing big checks to one of the many large nonprofits in the U.S. that are making an impact and could easily absorb a nine-figure gift, especially over a multi-year period.

The challenge for funders looking to make big bets isn’t that there aren’t plenty of good choices for reliably giving on a large scale to improve the world. It’s that there haven’t been a lot of clever, shovel-ready initiatives that can absorb big money in a way that also satisfies funders’ desire for a sense of efficacy.

That is a very different problem. On the one hand, it’s understandable: Smart and ambitious funders want to move the needle in a new way with fresh breakthroughs. On the other, it’s a morally disturbing stance. People are dying overseas, going hungry at home, and facing catastrophic climate change everywhere, but many philanthropists—including those who’ve signed the Giving Pledge—keep their checkbooks closed because the solutions aren’t interesting or customized enough to satisfy their egos. Please.

My past complaint about Mac’s 100&Change contest is that it unintentionally fortified the view that worthy big bets are hard and scary to make. The elaborate and overly hyped process sent a mixed message: Big bets are good, but you need to spend months and months beating the bushes to come up with nonprofits that you’ll even consider trusting with $100 million, paid out over six years, in this case. And then, for due diligence, you’ll went them to jump through various hoops, maybe even including a stressful live Shark Tank presentation before board members.

The fact that making big bets actually isn’t so hard was underscored by the many good and often obvious ideas that 100&Change turned up. The four finalists were all groups working on global health and development challenges—a space where, as I said, there are plenty of effective nonprofits that could use an extra $100 million to scale important work. The eight semi-finalists, like the Carter Center, also had solid ideas.

The winning proposal came from the Sesame Workshop and International Rescue Committee for joint work to educate Syrian refugee children. Specifically, the $100 million will be used to “implement an evidence-based, early childhood development intervention designed to address the ‘toxic stress’ experienced by children in the Syrian response region.”

Helping refugee children sounds like a great idea. It’s also pretty obvious to anyone who’s been paying attention to the Syrian refugee crisis and its most alarming aspect, the plight of children. In fact, a few months ago, when Jeff Bezos asked for giving suggestions that would make both immediate and long-term impact, educating refugee children was on the top of my own list of where new money could make a big difference. It’s nice to see that MacArthur came to the same conclusion after scouring the planet for over a year.  

But as I said at the start of this post, 100&Change has wrapped up with a positive twist. In partnership with the Foundation Center, MacArthur developed the 100&Change Solutions Bank, which it described as “a website where nonprofits can find collaborators and funders can search for projects in which to invest.” And the foundation supported the Center for High Impact Philanthropy at the University of Pennsylvania to create a "Bold Ideas for Philanthropists to Drive Social Change" guide that “showcases 81 proposals that stood out for the clarity of their goal and the logic of their proposed solution. Eleven ‘best bets’ were highlighted as having the greatest potential for impact.”

This is great stuff. And it adds to a growing body of well-developed ideas or well-vetted organizations that offer reassurance to donors that their money will be well used. Bridgespan has produced a series of detailed blueprints for big bets to create more upward mobility in the U.S., while GiveWell offers a list of high-impact nonprofits it's carefully evaluated.

These shovel-ready options mean wealthy philanthropists and foundations have fewer excuses for holding money back in a world filled with problems. 

Now we can expect checkbooks to spring open and more big grants start to flow. Right?