Big Bet Bummer

We need big bet philanthropy. We also need it to change.


I just got back from Skoll World Forum, the Cannes Festival for those trying to make the world a better place. What makes it so special is its focus on those who do the real work, and a growing horde of doers who show up in Oxford without a ticket has made it that much better. It’s like a one-stop shop for the serious funder.

Amidst the flow of people and ideas, there was one persistent source of turbulence. Literally, within five minutes of my arrival, I was hearing tales of anxiety and exasperation about “Big Bet Philanthropy.” The more people I talked to, the more it felt like the hungover aftermath of a great party: Those who weren’t invited feel left out, while many of those who went are wondering how they’ll get through the day ahead.

When you write startlingly big checks in an atmosphere of chronic scarcity, there are bound to be unintended consequences. Those consequences should guide some iterative party planning on the part of both doers and funders. Here, from my conversations in Oxford, are a few sobering observations about big bet philanthropy that I hope will provide some useful fodder:

1. It’s not actually a thing (at least not yet).

When these big checks started to drop, those of us who were doing, uh, Medium Bet Philanthropy were delighted. The prospect of a solid next-level layer of funding above ours was something we’d long hoped for, and the idea that big dreams and solid strategies might get the support they need was intoxicating. We all worried that some smaller funders might drop out in the wake of big grants, but because money attracts money, we hoped that a lot bigger would attract a lot bigger.

It hasn’t, at least not for most recipients, and at least not yet. When I ask doers who they’re talking about when they talk about big bet philanthropy, three names come up: the Audacious Project, MacKenzie Scott, and to a lesser degree, Co-Impact. Three funders basically comprise the entirety of what we hoped would become a movement. If you got an eight-figure grant and thought it would usher in a new era of fundraising, you’re mostly wrong.

2. It has “re-risked” ideas and organizations.

Like other early-stage funders, Mulago is happy to take a chance on new ideas and operators. We’re delighted when our money—and the process of accompaniment through critical proof points—serves to de-risk an organization for subsequent funders.

However, big bets bring a whole new level of risk, one borne mostly by the organization. Big bets drive organizations to dramatically accelerate their plans in order to justify a huge (double-your-budget and beyond) infusion of dough. In a funding world that has a tiny number of big bet funders and generally sucks at channeling money to those best able to create change, that puts you at real risk of a momentum and reputation-damaging stall when that big grant runs out.

Audaciousness is fun until you have to unwind that bold plan and lay a bunch of people off. I heard about organizations in the throes of not-fun reckoning as rosy projections turn into “funding gaps” turn into momentum-killing money chasms. In retrospect, I too got caught up in the spirit of big bet exuberance, and I don’t think I preached nearly enough caution to the doers. However, Mulago can’t give you enough money to get yourself in trouble, but big bettors can, and I’m feeling more than a little “you break it, you own it” right now.

3. It often conflates growth and scale.

If growth is a linear relationship between money and impact, scale is when you break free of that linear relationship on your way to an exponential curve of impact. It’s about a transition from doing yourself to doing via others; it’s a way to derive far more impact from the same amount of money (“systems change” fans should feel free to chime in here). It’s about an organizational and strategic transition, not just a bigger head count. It does require investment in new talent, expertise, systems, and often in additional geographies, and this is where big bets can make a huge difference

The most successful big bet recipients have built the launchpad for true scale. However, more than a few big bets have focused on organization growth, and while that can drive a dramatic impact bump, it’s unlikely to be sustained, especially when the money tide ebbs. If big bets can be focused on building the launchpad for a transition from service delivery to recruiting and enabling others, (call it a doer-at-scale transition or even systems change), then they hold the promise of helping organizations navigate that magical shift that will drive far more impact with the same amount of money. Done well, it’s way less risky and way more productive over time.

4. It’s a new way to fail.

One of the most disheartening stories I heard in Oxford was from a funder who supports a smallish organization in Africa whose work he greatly admires. One day, the leader of the organization approached him with a proposal for 10 times the organization’s current budget. In response to a gentle WTF, the leader confessed that, given all these big bets, he felt like he’d be failing his team—and the people he’s trying to serve—if he didn’t take a wild leap.

It’s like there are just enough of these big grants going around to make everyone feel like a failure if they don’t get one. And of course, where there is the opportunity, everyone feels obligated to apply for them. At a session in Oxford, I was sitting next to one of our fellows when someone from a big bet funder spoke of their easy application process, a process that generated 1,000 entrants. I whispered to her, “Did you guys apply?” She whispered back, “Of course.” “So how much time did your team spend on it?” “Two days.” The obvious math—driven by leaders’ obligation to pursue outsize opportunities like this—reveals a staggering waste of time.

The initial bloom has perhaps faded from this rose, but that shouldn’t obscure the fact that there’s something very admirable going on here. Big bet grants have brought more money into the sector, are mostly unrestricted, and have focused on some of the best solutions out there. Here are a few ideas to throw into the iterative party planning:

1. Recruit more big bettors.

We really do need that next layer of funding, and funders listen to funders. Really rich people (because I cannot say “ultra-high net-worth individual” with a straight face) need to recruit other really rich people, and more institutional funders need to join the fray. Audacious and Co-Impact are already doing that, which is wonderful, but big bet power can’t be concentrated in the hands of so few decision-makers. We need more big bet money, but we also need more decision-makers.

2. Build launchpads.

Focus these big bets on scalable ideas, and frame it as surge funding, as a way to drive organizational transformation such that even if budgets subside to pre-big bet trajectories, the organizations will still be on a completely different impact trajectory, and thus still able to accomplish far more with the same amounts of money.

3. Stretch things out.

Sometimes a 10-year stream of funding would ultimately lead to more impact than, say, a three-year blast. The promise of a steady million bucks a year of unrestricted money is hugely valuable in the context of a smart scale strategy, and it avoids the “they don’t need our money anymore” sentiment that can arise in the wake of a big bet cash avalanche.

4. Don’t go it alone.

It’s fun to feel like your money is going to make the critical difference. The problem is, it won’t, at least not in the long run. Even a Very Big Check cannot solve the problem. That’s why we—Mulago—do a lot of informal co-funding with like-minded friends of similar heft. Together, we can focus a fair amount of money, but just as importantly, we can distribute both the decision-making and the risk. Big bettors might want to do the same: Go big, but make sure you bring others in with you. Spread the decision-making, spread the risk, and share the credit.

This is a bigger discussion, and others will have more and better ideas. But the common theme is that we need to leaven big bet thinking with hedge your bets thinking: We need more money, more decision-makers, more recipients, and more non-linear launchpad transitions. At the same time, paradoxically, we need less time pressure if we’re to achieve the potential of this next-level funding to drive exponential change.

There is a lot to admire in the spirit and action of big bet philanthropy, and this tiny band of pioneers deserves a ton of credit. But if it remains a tiny band, it won’t accomplish what we need so desperately for it to accomplish. Let’s tune it up and make it a thing.