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In recent months, the world of philanthropy has been abuzz with the new trend of high-profile donors giving super-sized grants to nonprofits, which critics and fans have dubbed “Big Bet Philanthropy.”

However, behind the scenes, a conversation has been brewing about the perceived effectiveness and value of large-scale giving. Following a spirited panel discussion at the Skoll World Forum last April, a series of articles in SSIR delved deeper.

Writing in these pages a year ago, Kevin Starr raised legitimate concerns about the potential pitfalls of such large gifts in a critical piece. Among Starr’s worries were heightened risks of nonprofit failures when funding runs out, excess focus on organizational growth rather than impact, and reputational and operational harm to nonprofits that fail to attract big bet funding.

One of us (Cecilia Conrad) responded with her own article, “In Defense of Big Bets.” Given the scale of need around the world, it argued we must do all we can to encourage donors to significantly increase their giving, particularly large foundations and ultra-wealthy individuals capable of supporting transformative impact at scale. We knew many donors shared Starr’s concerns and worried that his article might have a chilling effect on their giving.

“Let’s highlight what is possible,” that article urged, “and provide guidance and encouragement.”

Since then, more pieces have followed, from the One Acre Fund on how to avoid so-called “funding cliffs”, from Last Mile Health and Educate Girls offering the perspective of grantees, and Kevin Starr again, on how organizations can strategically leverage a big bet.

In these eventful early days of the new US administration, as many nonprofits are facing funding cuts for everything from homeless shelters to health care, we are more convinced than ever that all of us in the charitable sector need to do everything we can to encourage more large-scale giving.

Towards that end, we want to share lessons that we and our team have been learning about successful large philanthropic donations. Far from random or impulsive “bets,” they are thoughtfully constructed and enduring “sure bets” that we think of as durable capital for durable impact.

Six Keys to Success

Based on our research, we’ve identified six keys to success for effective durable capital investments. Not every large grant needs to have all six traits to flourish, but if none of these characteristics is present, the odds of positive outcomes greatly diminish:

  • The investments ensure recipients become stronger and more durable.
  • They are larger and last longer than typical grants, giving grantees much-needed time and flexibility to plan for sustainable growth.
  • They target nonprofits that are well-positioned to optimize the utility of large investments.
  • They catalyze social innovations that are ready to achieve critical mass.
  • They enable and encourage experimentation by nonprofits, rather than imposing funder-driven solutions.
  • They embrace collaboration and strengthen existing partnerships, including with the public or private sector.

What Is Durable Capital?

We define durable capital as long-term, flexible funding that allows nonprofits to build the infrastructure, capacity, and staff to achieve their most ambitious goals. It consists of large investments that support critical but often neglected needs such as strategic planning, fundraising, advocacy, and staffing. Durable capital is distinct from general operating support, which helps nonprofits fund their day-to-day needs, and project grants, which support discrete initiatives and require organizations to achieve specific, measurable outcomes.

If “big bet” grants are not crafted with durability in mind, they may compel nonprofits to quickly ramp up staffing and service offerings when the money arrives, only to face a “funding cliff” that triggers job cuts and service cuts when grants end.

For philanthropists who recognize the need for more durable capital and are ready to unlock more resources to respond to the extraordinary moment the world is in, the following case studies provide evidence of what works and, hopefully, a bit of inspiration.

1. Building More Durable Organizations

The norms that have developed around annual giving cycles, which bias donors towards short-term, once-a-year gifts rather than long-term philanthropic investments, are a longstanding challenge for the charitable sector. A variety of factors have solidified the norms, from tax policy to the popularity of annual fundraising galas. A consequence is that nonprofits’ budgets can fluctuate wildly from year-to-year depending on everything from the health of the economy to global conflicts or natural disasters that may influence generosity.

Donors can help social organizations ride these waves by making large investments in endowments that can support nonprofits far into the future. Endowments are widespread in higher education and for arts and culture institutions, yet they are exceedingly rare among social service organizations, particularly those led by people of color or that work to advance racial justice. According to a study by Bridgespan, endowments for nonprofits led by people of color are nearly four times smaller than those of white-led organizations, and their average percentage of revenue is less than half.

John Jackson, president and CEO of the Schott Foundation, believes organizations that are working to dismantle long-standing structural and systemic causes of inequity are exactly the types of nonprofits that need endowments, so they can stay in the battle for the long term. Towards that end, the Schott Foundation in 2022 launched the Racial Justice in Education Endowment Collaborative Fund. Schott’s goal is to raise $30 million to fund endowments to ensure the sustainability of three BIPOC-led national education justice alliances. A 5 percent annual drawdown from the endowments would allow the alliances to spend less time on fundraising and increase the decision-making power of local leaders by making them less dependent on the changing interests of philanthropy.

Nonprofits also need strong financial systems and controls to receive, track, and effectively deploy grants. This is especially true when small organizations receive larger infusions of capital than they are used to.

Grantmakers at The END Fund understood this when the collaborative launched in 2012 to support nonprofits treating and preventing neglected tropical diseases in Africa. In addition to conducting standard due diligence on its grantees, the END Fund takes a comprehensive approach to assessing and strengthening its partners’ internal operations over time. The process does not end once a grant is awarded; the END Fund reviews its grantees’ financial systems every 2-3 years to assess how they are evolving and to determine what tools or structures may help them grow. Since few grantees have the time or budgets to conduct such reviews, the END Fund adds capital for such expenditures into the majority of its grants, usually around 10 percent of the overall award, so grantees can leverage cloud-based payroll systems and other advances to reduce costs and increase efficiency as they grow.

One grantee that has reaped the benefits is the Mission to Save the Helpless (MITOSATH), which works to combat diseases such as lymphatic filariasis and onchocerciasis, also known as river blindness. When the END Fund began supporting MITOSATH in 2015, the organization had 12 staff members in the states of Lagos and Niger. Since then, the END Fund has provided $6 million to the organization, with a portion of each grant dedicated to organizational strengthening.

In 2022, the END Fund engaged an independent entity to review its grants to MITOSATH, which indicated a need to strengthen internal controls and financial reporting. The END Fund then worked with MITOSATH to refine its policies and systems. Today, MITOSATH has more than 30 full-time and 60 part-time staff members working in six states in Nigeria. It has expanded onchocerciasis treatments in each of the states and supported the governments of four states to reach requirements to cease lymphatic filariasis treatments.

2. Large Budgets and Long Timelines

The most familiar forms of durable capital enable nonprofits to increase their impact by providing their services to more people, communities, or regions. Such scaling-up is common in the private sector, where consumer brands with hot-selling products ramp up manufacturing to sell them in new countries or adapt them for new audiences.

Convinced that such an approach could improve lives by bringing proven social-sector innovations to significantly more people, the MacArthur Foundation launched its first 100&Change competition in 2017. The initiative provided $100 million to fund a single proposal that promised real and measurable progress in solving a critical global problem. It was unusual both for the size of the grant and for the multi-year partnership between the MacArthur Foundation and the awardee.

The first 100&Change grant was awarded to the Sesame Workshop and the International Rescue Committee to implement Ahlan Simsim, a five-year joint program to bring early learning and nurturing care to children affected by the conflict in Syria and displacement across the Middle East. The core components of Ahlan Simsim (which translates to “Welcome Sesame”) are a children’s television show broadcast in the Middle East and North Africa, and educational services for vulnerable children and their caregivers in Syria, Lebanon, Jordan, and Iraq.

I was heavily involved in the creation of 100&Change, and the impact of Ahlan Simsim vastly exceeded our team’s expectations. The original vision was to create four seasons of television content to reach six to nine million children and to provide direct educational services to 1 million kids and caregivers. By 2024, Ahlan Simsim had produced nine seasons of content that reached over 27 million children and provided direct services to more than 3 million children and caregivers.

The Ahlan Simsim team used a portion of the 100&Change grant to ensure its long-term viability by securing new partners and funders, including governments and businesses. To date, other donors have contributed over $300 million–including two $100 million grants from the LEGO Foundation–to deepen Ahlan Simsim’s work and to adapt the content for children enduring crises in other regions.

3. Grantees Poised to Optimize Large Investments

Durable capital can also be effective when it allows established organizations to evolve and expand support for populations they already serve. One example is the Lone Star Depression Challenge, an initiative of the Meadows Mental Health Policy Institute in Texas, which was awarded $10 million by Lyda Hill Philanthropies in 2021 through the Lone Star Prize, a competition managed by Lever for Change. The grant enabled the Meadows Institute and its partners to expand diagnosis and treatment of mental health disorders in Texas.

The Meadows Institute’s strategy was to leverage existing health care infrastructure in the state by increasing the training and expertise of primary care providers so they could better detect and treat their patients’ mental health challenges. They also worked with employers to reduce the stigma around depression and increase access to mental health resources.

The Meadows Institute was uniquely qualified to use the $10 million to execute its strategy thanks to its longstanding ties and credibility with health care providers and businesses in Texas.

Early data indicates the goals of the Lone Star Depression Challenge are within reach. Historically, fewer than 1 in 15 of the more than 1.5 million Texans suffering from depression each year received sufficient care to recover and more than 3,000 people in the state died each year from suicide. Through the Lone Star Depression Challenge, the Meadows Institute hoped to increase the rate of recovery from depression to more than 50 percent.

Baseline remission from depression is at 42 percent for those who have received treatment from the Meadows Institute's model or approaches based on it. The Meadows Institute's original plans called for working in two of Texas’ eight health care regions, but it is now in six. In all, 18 health systems have committed to making the initiative available to all of the 4.3 million people they serve.

4. Catalyzing Innovations to Achieve Critical Mass

When nonprofits introduce effective new social innovations, awareness and uptake usually builds slowly and unevenly. The exponential growth needed to achieve critical mass usually requires an extraordinary infusion of durable capital or a dramatic shift in demand.

Project ECHO has experienced both.

Launched in 2003 by Dr. Sanjeev Arora, a professor of medicine at the University of New Mexico Health Sciences Center, Project ECHO was created to help rural health care professionals learn to provide life-saving hepatitis C treatments to their patients through regular video consults with distant specialists. Unlike traditional, in-person training, ECHO mentors health care workers over the long term, both increasing their knowledge and helping them build the confidence to implement best practices. Project ECHO facilitated video telementoring sessions with 1,000 to 2,000 practitioners annually in its first few years. As the concept gained popularity, Project ECHO added new health disciplines, new partners, and new geographies. By 2019 its platform was delivering video trainings to more than 230,000 attendees in 158 countries annually with content related to 70 diseases areas.

Impressed by Project ECHO’s potential, Co-Impact in 2019 invested $10 million to expand its offerings in India. Today, working with partners such as India’s National Health Missions and the Ministry of Health and Family Welfare, Project ECHO’s platform is delivering training to tens of thousands of nurses, community health workers, and physicians across the country to improve detection and treatment of tuberculosis, blood disorders, cancer, and many other illnesses.

When COVID-19 arrived, the Project ECHO team—and its funders—understood its platform was well-positioned to help health care providers respond to the pandemic. Co-Impact in March 2020 launched a Systems Response Fund to channel additional philanthropic capital to Project ECHO, and The Audacious Project followed a few months later with a substantial grant to help the platform pivot. The goal was to equip more than 350,000 frontline clinicians and public health workers across Africa, Southeast Asia, and Latin America to respond to the pandemic.

Boosted by the timely durable capital investments, Project ECHO wildly surpassed those targets with more than 1.1 million people attending Project ECHO trainings in 2020. Cumulatively, attendances have reached 6.3 million to date, touching more than 150 million lives globally.

5. Encouraging Experimentation

Whether a social organization wants to diversify its services or expand into new markets, it is rarely obvious how to do so. Testing and experimentation are essential. Yet, few nonprofits can afford the trial-and-error necessary to evolve and endure. Durable capital can fill the gap by allowing grantees to try new approaches and determine the best ways to achieve their goals.

That is the philosophy behind The Studio at Blue Meridian Partners, which “embraces experimentation and provides flexible resources to help organizations accelerate their readiness for significant scaling.”

The Studio launched with an initial cohort of seven nonprofits that each received up to $10 million as well as strategic assistance. One early grantee was Per Scholas, which prepares individuals for tech careers by providing skills training and access to employer networks. Per Scholas aims to improve economic equity through its programs and has an explicit focus on serving low-wage workers without a bachelor’s degree. Per Scholas had been in existence for more than two decades and was serving more than 2,000 learners annually when it was selected in 2021 to receive an investment from The Studio, so it was well established and the success of its immersive, in-person training model had been validated by external research.

The investment from The Studio allowed Per Scholas to accelerate its evolution by testing part-time, virtual, hybrid, and satellite variations of its in-person training, building on lessons learned during the Covid lockdown. Ultimately, Per Scholas was able to expand its reach to more than 5,000 learners annually in just three years—after taking more than two decades to reach 2,000. The grant also enabled Per Scholas to develop and test a new program called the Career Accelerator, to help existing tech workers continue to update and evolve their IT skills. The Career Accelerator was expected to serve 2,000 learners in 2024 with a goal of supporting 10,000 learners annually by 2030.

6. Embracing Collaboration and Strengthening Partners

Few nonprofits can make lasting progress alone. Cooperation with like-minded partners in the public and private sectors is usually essential. Durable capital can help nonprofits support their public sector partners to improve government services and deliver them more effectively. It can also help communities develop the training, skill development, and structures to address more of their own needs.

One such investment was a $20 million grant from Co-Impact to The Global Fund and Last Mile Health in 2019 to support the government of Liberia’s vision to provide universal access to primary healthcare for all Liberians through the country’s professional community health workforce. Over 1.2 million people in Liberia live more than 5 kilometers (3 miles) from a health facility. That distance limits access to basic health services, lifesaving treatment for common childhood illnesses, family planning, and prenatal care.

With durable capital from Co-Impact and other funders, Last Mile Health worked in partnership with Liberia’s Ministry of Health, The Global Fund and a coalition of government entities and nonprofits to expand Liberia’s National Community Health Program, bringing essential care within reach of every rural household. Today, over 5,000 community and frontline health workers have been recruited, trained, supervised, equipped and deployed by the Liberia Ministry of Health. The national community health program is fully scaled and has expanded access to contraception and care for childhood malaria, diarrhea and pneumonia.

After a gender assessment conducted in 2021 determined that only 17 percent of Liberia’s paid professionalized health workers were women, Last Mile Health and the Ministry of Health also made a commitment to increase gender parity in the community health workforce. In a recent round of recruitment, the share of new community health workers who are female had increased from 20 percent to 36 percent.

Conclusion

With government funding for vital social services in retreat around the world, there is an urgent need for donors to make major investments of philanthropic capital in nonprofits. At Lever for Change, we are proud to help donors deploy large grants by developing and managing open calls—but ours is just one of many effective models.

Well-resourced donors have huge potential to give more and have more impact, and there is an abundant supply of nonprofits ready to accomplish more good in the world if they receive the right quantity and quality of durable capital.

Read more stories by Cecilia Conrad, Kristen Molyneaux & David Bowermaster.