Category Archives: Media

The Potential for Big-Bet Philanthropy to Drive Social Change

The Potential for Big-Bet Philanthropy to Drive Social Change

Across the world, the number of billionaires has grown exponentially in the past few decades. In 1993, only about 300 people had hit the billionaire mark, but there are now more than 2,200 people worth at least a billion dollars. Collectively, their worth adds up to more than $9 trillion. One of the biggest effects of this growth in wealth has been in the area of philanthropy, especially through movements such as the Giving Pledge, which challenge these wealthy individuals to spend their money for good sooner rather than later. Excitement about how this growing wealth can be used to solve social issues and help people has understandably increased sharply in recent years. However, there is also growing concern that billionaire philanthropy effects undemocratic change, as it allows the wealthiest people to choose those issues that are most deserving of funding.

A great lens of delving into this debate relates to “big bet” philanthropy. The phrase refers to gifts of $10 million or more. These sizeable gifts have driven a number of important social advancements, which include eradicating disease and protecting civil rights for marginalized communities. At the same time, the majority of the largest gifts do not go to social causes. The most common recipients of these largest gifts remain universities, cultural institutions, and medical research organizations, meaning that little of this money goes toward solutions related to poverty, justice, and other prominent social issues. The problem is that the donors behind these large gifts say that social issues remain the primary drivers of their giving. Thus, some sort of disconnect exists.

A Growing Focus on Social Issues

At the same time, there has been progress over time. More big-bet philanthropists are focusing on social issues than ever before. In 2000, only 18 gifts that each totaled $25 million or more were given directly to social causes. By 2017, that number had grown to 69. Experts in the philanthropic sector believe that this increase reflects a growing desire to make thoughtful gifts that address the most persistent social problems. However, it is also important to note that the growth in grantmaking does not accurately reflect the overall potential for giving. Analysts have found that families worth more than $500 million in the United States donate an average of 1.2 percent of their wealth annually toward philanthropic causes. However, for these families to give away half of their wealth in the coming two decades, they would need to increase their giving to over 11 percent annually.

Understandably, many nonprofit organizers are seeking ways to effect this ten-fold increase in giving and attract more big-bet donations to the social realm. Some degree of anxiety exists about this increase in giving that must occur for the wealthiest Americans, most of whom are now in their 60s, in order to fulfill their Giving Pledge obligations. On the one hand, big-bet giving could fuel a new era of innovation and impact that dramatically shifts what society looks like and how it operates. On the other hand, giving could start to focus on less ambitious outcomes and cause only minimal change as it increases. Thus, the question of how to encourage big bets that are disciplined, enterprising, and humble has arisen.

The Impact of a Hub-And-Network Approach to Big-Bet Philanthropy

A solution that shows a lot of promise recognizes the fact that few donors can effect lasting change alone, even with their big bets. The JPB Foundation has created a unique approach to giving that it calls the “hub-and-network” approach. This means that the foundation avoids placing all of its big bets in a single organization and instead places multiple bets on one centrally positioned grantee that becomes the hub. Subsequently, the hub can serve as a focal point for grantmaking. However, the foundation also makes additional investments around the hub to create a network of organizations all working toward a similar goal. For example, JPB placed a big bet on Community Change, a movement-building organization, as the hub for its poverty prevention work, although it has also funded several nonprofits that undertake different but complementary work on the same issue. These network organizations include the Sargent Shriver National Center on Poverty Law, the National Employment Law Project, and the Center on Budget and Policy Priorities.

The hub-and-network approach to grantmaking allows JPB to make its big bets in a more intelligent manner. The approach allows the foundation to capitalize on the distinct expertise, experience, and philosophies of its network while continuing to funnel sizeable funding into a particular socially focused work area. The flexibility of this approach facilitates experimentation and promotes collaboration. The decision-making is undertaken jointly with the network, as well as other funders connected to it. Each of the organizations can weigh in on those aspects of an overall strategy that they understand the best or feel the most passionate about so that the big bet can have the largest impact possible. JPB has also noticed that this model has encouraged some supported organizations to explore new sides of an issue. One of its hub-and-network portfolios focuses on energy efficiency, and several of the network organizations have become involved with tangential, but related issues such as affordable housing.

This Is What You Need to Know about How Melinda Gates Is Inspiring Philanthropic Commitment to Women in Tech

This Is What You Need to Know about How Melinda Gates Is Inspiring Philanthropic Commitment to Women in Tech

Women are assuming larger roles in American philanthropy. Their efforts have drawn attention to other gender disparities in the United States. One of the topics that has received a lot of attention recently is gender diversity in the technology industry. Research has shown that only about 11 percent of senior technology leaders are women. Executives… Continue Reading

What You Need to Know about the Unique Charity of Kenneth Griffin

What You Need to Know about the Unique Charity of Kenneth Griffin

As the field of philanthropy continues to evolve at a rapid rate, some names are coming up more frequently in conversations, such as Barbara Dalio and Laurene Powell Jobs. Another donor who has been receiving a lot of attention is Kenneth Griffin, a hedge funder who has accrued $9 billion in wealth before turning 50.… Continue Reading

Laurene Powell Jobs and Her Innovative Approach to Philanthropy

Laurene Powell Jobs and Her Innovative Approach to Philanthropy

The landscape of philanthropy is changing rapidly with the growing popularity of charitable LLCs and crowdsourced support for causes. One of the drivers of this trend is Laurene Powell Jobs, the widow of Steve Jobs. She has become one of the wealthiest women in the world with her net worth of about $20 billion. A… Continue Reading

Initiative Focuses on Investment in Public Spaces

Initiative Focuses on Investment in Public Spaces

Philanthropy has played a major role in reshaping public spaces across the country, ranging from parks to plazas. Expansions and improvements to these public spaces have had a positive impact on communities and larger cities, although historically not much work has been done to investigate its effects. However, a new initiative has been launched to… Continue Reading

Will We Soon See an Increase in the Number of Charitable LLCs?

Will We Soon See an Increase in the Number of Charitable LLCs?

The Chan Zuckerberg Initiative made waves when it became a for-profit limited liability company (LLC) despite its philanthropic focus. The LLC structure does not come with the tax benefits that a foundation provides, but it does offer much more flexibility and privacy, which equates to control. Some industry professionals think that this strategy may become… Continue Reading

7 Apps People Can Use to Give to Charity without Spending Money

7 Apps People Can Use to Give to Charity without Spending Money

For many people, the thought of donating to charity comes with some apprehension. Choosing the right charity can involve a lot of legwork, and finding the time for research can prove difficult. Some people might give more frequently if the process was simplified. Luckily, several charity-focused apps have made it much easier to support a… Continue Reading

The Lessons to Be Learned from the Failure of Diller Island

The Lessons to Be Learned from the Failure of Diller Island

Large philanthropic gifts can have an incredible impact on communities. The philanthropists capable of making these monumental donations usually have the best intentions, yet some argue that these gifts are one of the most important ways the affluent wield power and influence. After all, philanthropists have ultimate control over how their millions are allocated, so… Continue Reading

How Is the American Red Cross Helping Victims of the Recent Natural Disasters?

How Is the American Red Cross Helping Victims of the Recent Natural Disasters?

One of the primary functions of the American Red Cross is to respond to natural disasters. After a cluster of historic hurricanes devastated numerous communities, the organization has been working around the clock to respond to individual needs and facilitate recovery. Altogether, the American Red Cross has provided shelter for more than 1 million people… Continue Reading