Why aren’t there more big bets? That’s an easy one. Very few non-profits have a scalable enterprise framework to receive the big bets. 97% of non-profits couldn’t absorb or deploy a big bet—only the hospitals and universities are set up for it. Most small- to mid-size non-profits aren’t even looking to scale—because their revenue model is broken, they are stuck in survival mode.
What is necessary to receive a “big bet?” It’s simple: a business plan, with leadership that knows how to scale.
Thanks for your comment, Donald. It’s true that donors find more “shovel-ready” opportunities at large, traditional institutions. Some of this is the reality of what traditional institutions have developed. However, some of it is the result of a basic imbalance in mindset. Take endowments—one of the most common formats for big bets to universities, and a rarity for gifts to social-change nonprofits. These perpetuities deliver their benefits for decades. A gift of $10M represents less than $500K per year; $50M, less than $2.5M per year. Could many social-change nonprofits put that reliable funding to very good use? Absolutely. That’s a more fair comparison with higher education’s absorptive capacity.
It’s helpful, too, to broaden the aperture beyond gifts to a single organization—as doing so opens up a range of important big-bet opportunities in the social-change realm. Big bets can fuel social movements and other multi-organization initiatives, whereby no one organization needs to be able to absorb and deploy the large sum. Such multi-organization efforts are a critically important way to advance social change, and history tells us big bets can play a catalytic role in propelling them (e.g., marriage inequality, the Green Revolution, etc.).
Totally agree, William. Yes, small to midside nonprofits (budgets under $100m) could greatly benefit from them. But they never ask for them. Because they rarely have audacious growth plans. So I agree—it is all about “mindset”—put more specifically, it’s all about ambitious leadership. When small to mid-size non-profits adopt BHAGs and the appropriate frameworks to execute, they, too, grow at similar rates. We’ve proven this many times. You would recognize a great deal of replicable strategy in our methodology to solve this very problem—feel free to reach out.
Again, thanks for pointing out this huge disconnect. We’re working on it.
It’s great to read that it’s not all in our heads and that ‘a gap’ does exist. Grassroots organizations like ourselves wonder how do we get connected with donors that can truly help foster/further our efforts against domestic violence awareness…an issue too often left out of giving conversation. Thank you for this article.
Love Life Now Foundation, Inc.
@Lovern—here is your answer. Take a business plan into the nonprofit capital markets: individuals, foundations, corporations, and agencies. And develop an earned income stream if applicable. And then you monitor your progress with a pipeline, and manage our programs with a dashboard. This connected system consistently results in dramatic gains in revenue, impact and org performance.
A couple of observations and thoughts - First - those principles of engagement (Relationship built on trust, Investment hypothesis…etc.) are excellent and frankly can be applied to a nonprofit’s interaction with donors at a variety of levels. While I understand Bridgespan’s focus on $10M+ gifts, there are many nonprofits for whom a $1M gift would be a big bet (for some even a $100K). Those principles provide effective guidance that all nonprofit leaders should adhere to.
Secondly, I think that more organizations need to give themselves permission to think big and to dream up those “big bet” opportunities, so that there’s always a “shovel ready” project on hand. Nonprofits too often get caught up in an incremental, “we’re not worthy” type of mentality such that they don’t take the time to articulate what it would really take to address the social change issue they are dealing with. I remember hearing Geoff Canada talking about being urged to come up with and articulate his $10M idea - what it would REALLY take to solve the problems in Harlem. It forced him to think big and bold, and it made a real difference in his ability to articulate his potential impact and provide a vision for potential investors. More nonprofits need to follow that lead so that when a donor comes along, the nonprofit is ready!
There’s no question that placing a “big bet” with a high performing nonprofit will result in far greater impact than spreading around small grants, but even the heroic examples of rapid growth cited in this article touch on a vanishingly small fraction of the national or global problems they seek to address. Scaling up nonprofit organizations is indeed helpful, but the results we have seen from our work in collective impact has convinced us that a fundamental shift in thinking is needed to achieve large scale lasting change. We need to move past the search for individual organizations with “the answer” to a system-wide perspective that engages many organizations across nonprofit, business, and government in finding common ground and tackling large scale problems through incremental improvements and better alignment of their activities. Our society’s problems result from, and are held in place by,dysfunctional systems that arise from the isolated efforts of many different organizations, and it is only by improving the way the system operates—which often requires very little additional funding—that we can make social impact at the necessary scale.
@Mark Kramer—agreed that the car is broken. However, we can’t just buy a whole new car. We need to work with the parts we have. And the most broken of all the parts is, collectively, the non-profit sector. By helping nonprofits—one at a time—transform into scalable, high performing social enterprises, we do the hard work of fixing the weak link in the system. When even small and mid-sized non-profits learn how to capture significant investment and deploy it with transparency and accountability, using best-practice management tools, THEN we will see progress. In fact, it is already happening.
Mark, with respect, you can’t fix a broken system by saying “let’s work on the system.” The system is individual parts, and there is where the focus has to be. We already have a growing cascade of scalable, high-performing non-profits that are functioning at a very high level with government and business.
By the way, Bridgespan isn’t doing this work. They charge way too much per month to serve the vast majority of non-profits. And from what I’ve seen, their process is very slow. So it’s with no degree of irony they continue to position themselves as thought leaders on this subject.
This is a very helpful survey of the “Big Bets” landscape. A few thoughts:
When we’re not talking about old fashioned capital (a new building, etc), then we’re talking about these big funds being artfully used for growth equity (as in the Fisher - KIPP example).
So what needs growth equity in the non-profit world? Places with successful programs that can be extended to other cities (as in the KIPP example), etc. But another creative intervention is in putting together logical but separate dance partners. As Joel Fleishman documented with the creation of LISC in his Foundation book, “bridges” are needed between people or agencies who talk different languages but actually need each other. And building on this “matchmaking” need is another big category of “networking” that includes digital projects that need to do the hard work of connecting isolated pockets of data.
In this way, words like “bridges” and “infrastructure” are apt metaphors and indicate the need for one-time influxes of capital to make things happen. So, while I agree with commentator Mark Kramer above about the need for solutions that overcome isolated redundant efforts, I’m not in agreement that these are not costly. They can be and no one except someone with a bigger vision is there to write checks for needed plumbing.
So, think of connecting medical research databases (or researchers). You occasionally get big visions like Julian Robertson who said, “The idea of starting a dialogue between experts in technology, cancer research and oncology - people who aren’t usually in the same room together - has the potential to create a synergy of ideas that could ultimately lead to improvements in outcomes for breast cancer patients.” http://finance.yahoo.com/news/big-data-breast-cancer-symposium-154000683.html
It’s easy to understand (but sad to see) why data created by individual cities (including police reporting) are local. It’s hard to bring datasets together that were built locally for one purpose. See James Comey “You can get online today and figure out how many tickets were sold to ‘The Martian,’ which I saw this weekend … The CDC can do the same with the flu,” said Director Comey, according to The Washington Post. “It’s ridiculous — it’s embarrassing and ridiculous — that we can’t talk about crime in the same way, especially in the high-stakes incidents when your officers have to use force.”http://www.csmonitor.com/USA/USA-Update/2015/1008/Why-the-government-has-so-little-data-on-police-violence
Bringing heterogeneous data together is work—extraction, transformation, loading. It is not sexy work but requires both programming and maintenance. This is a perfect area for “big bets” - with long term returns (as is the case with other infrastructure).
When the article talks about intermediary organizations, it mostly focuses on re-granting (ala Robin Hood). But there’s also a role for intermediaries in the diplomatic (and sometime technological) bridge building between institutions, cultures, and databases. And that takes work—and hence big bets.
With respect. It is very simple when it comes to solving the crises in places such as Hralem, Detroit, Gary, Baltimore, etc. Focus your money on ending the War on Drugs, then focus it on the industries whom and individuals who profit mightly off of the glorification of.
Hard to do I know. Doubly so when the sitting President has concerts performed by said individuals. Snoop Dog, Jay-Z and more. What message does that send?
COMMENTS
BY Donald Summers
ON November 20, 2015 11:55 AM
Why aren’t there more big bets? That’s an easy one. Very few non-profits have a scalable enterprise framework to receive the big bets. 97% of non-profits couldn’t absorb or deploy a big bet—only the hospitals and universities are set up for it. Most small- to mid-size non-profits aren’t even looking to scale—because their revenue model is broken, they are stuck in survival mode.
What is necessary to receive a “big bet?” It’s simple: a business plan, with leadership that knows how to scale.
BY William Foster
ON November 23, 2015 12:07 PM
Thanks for your comment, Donald. It’s true that donors find more “shovel-ready” opportunities at large, traditional institutions. Some of this is the reality of what traditional institutions have developed. However, some of it is the result of a basic imbalance in mindset. Take endowments—one of the most common formats for big bets to universities, and a rarity for gifts to social-change nonprofits. These perpetuities deliver their benefits for decades. A gift of $10M represents less than $500K per year; $50M, less than $2.5M per year. Could many social-change nonprofits put that reliable funding to very good use? Absolutely. That’s a more fair comparison with higher education’s absorptive capacity.
It’s helpful, too, to broaden the aperture beyond gifts to a single organization—as doing so opens up a range of important big-bet opportunities in the social-change realm. Big bets can fuel social movements and other multi-organization initiatives, whereby no one organization needs to be able to absorb and deploy the large sum. Such multi-organization efforts are a critically important way to advance social change, and history tells us big bets can play a catalytic role in propelling them (e.g., marriage inequality, the Green Revolution, etc.).
BY Donald Summers
ON November 23, 2015 12:13 PM
Totally agree, William. Yes, small to midside nonprofits (budgets under $100m) could greatly benefit from them. But they never ask for them. Because they rarely have audacious growth plans. So I agree—it is all about “mindset”—put more specifically, it’s all about ambitious leadership. When small to mid-size non-profits adopt BHAGs and the appropriate frameworks to execute, they, too, grow at similar rates. We’ve proven this many times. You would recognize a great deal of replicable strategy in our methodology to solve this very problem—feel free to reach out.
Again, thanks for pointing out this huge disconnect. We’re working on it.
BY Lovern Gordon
ON December 1, 2015 05:25 AM
It’s great to read that it’s not all in our heads and that ‘a gap’ does exist. Grassroots organizations like ourselves wonder how do we get connected with donors that can truly help foster/further our efforts against domestic violence awareness…an issue too often left out of giving conversation. Thank you for this article.
Love Life Now Foundation, Inc.
BY Donald Summers
ON December 1, 2015 07:46 AM
@Lovern—here is your answer. Take a business plan into the nonprofit capital markets: individuals, foundations, corporations, and agencies. And develop an earned income stream if applicable. And then you monitor your progress with a pipeline, and manage our programs with a dashboard. This connected system consistently results in dramatic gains in revenue, impact and org performance.
BY Lovern Gordon
ON December 1, 2015 09:48 AM
Thank you very much Donald!
BY MarshallCapDev, Capital Development Strategies LLC
ON December 15, 2015 06:34 AM
A couple of observations and thoughts - First - those principles of engagement (Relationship built on trust, Investment hypothesis…etc.) are excellent and frankly can be applied to a nonprofit’s interaction with donors at a variety of levels. While I understand Bridgespan’s focus on $10M+ gifts, there are many nonprofits for whom a $1M gift would be a big bet (for some even a $100K). Those principles provide effective guidance that all nonprofit leaders should adhere to.
Secondly, I think that more organizations need to give themselves permission to think big and to dream up those “big bet” opportunities, so that there’s always a “shovel ready” project on hand. Nonprofits too often get caught up in an incremental, “we’re not worthy” type of mentality such that they don’t take the time to articulate what it would really take to address the social change issue they are dealing with. I remember hearing Geoff Canada talking about being urged to come up with and articulate his $10M idea - what it would REALLY take to solve the problems in Harlem. It forced him to think big and bold, and it made a real difference in his ability to articulate his potential impact and provide a vision for potential investors. More nonprofits need to follow that lead so that when a donor comes along, the nonprofit is ready!
BY Mark Kramer
ON January 7, 2016 10:53 AM
There’s no question that placing a “big bet” with a high performing nonprofit will result in far greater impact than spreading around small grants, but even the heroic examples of rapid growth cited in this article touch on a vanishingly small fraction of the national or global problems they seek to address. Scaling up nonprofit organizations is indeed helpful, but the results we have seen from our work in collective impact has convinced us that a fundamental shift in thinking is needed to achieve large scale lasting change. We need to move past the search for individual organizations with “the answer” to a system-wide perspective that engages many organizations across nonprofit, business, and government in finding common ground and tackling large scale problems through incremental improvements and better alignment of their activities. Our society’s problems result from, and are held in place by,dysfunctional systems that arise from the isolated efforts of many different organizations, and it is only by improving the way the system operates—which often requires very little additional funding—that we can make social impact at the necessary scale.
BY Donald Summers
ON January 7, 2016 12:22 PM
@Mark Kramer—agreed that the car is broken. However, we can’t just buy a whole new car. We need to work with the parts we have. And the most broken of all the parts is, collectively, the non-profit sector. By helping nonprofits—one at a time—transform into scalable, high performing social enterprises, we do the hard work of fixing the weak link in the system. When even small and mid-sized non-profits learn how to capture significant investment and deploy it with transparency and accountability, using best-practice management tools, THEN we will see progress. In fact, it is already happening.
Mark, with respect, you can’t fix a broken system by saying “let’s work on the system.” The system is individual parts, and there is where the focus has to be. We already have a growing cascade of scalable, high-performing non-profits that are functioning at a very high level with government and business.
By the way, Bridgespan isn’t doing this work. They charge way too much per month to serve the vast majority of non-profits. And from what I’ve seen, their process is very slow. So it’s with no degree of irony they continue to position themselves as thought leaders on this subject.
BY James Shulman
ON January 22, 2016 11:20 AM
This is a very helpful survey of the “Big Bets” landscape. A few thoughts:
When we’re not talking about old fashioned capital (a new building, etc), then we’re talking about these big funds being artfully used for growth equity (as in the Fisher - KIPP example).
So what needs growth equity in the non-profit world? Places with successful programs that can be extended to other cities (as in the KIPP example), etc. But another creative intervention is in putting together logical but separate dance partners. As Joel Fleishman documented with the creation of LISC in his Foundation book, “bridges” are needed between people or agencies who talk different languages but actually need each other. And building on this “matchmaking” need is another big category of “networking” that includes digital projects that need to do the hard work of connecting isolated pockets of data.
In this way, words like “bridges” and “infrastructure” are apt metaphors and indicate the need for one-time influxes of capital to make things happen. So, while I agree with commentator Mark Kramer above about the need for solutions that overcome isolated redundant efforts, I’m not in agreement that these are not costly. They can be and no one except someone with a bigger vision is there to write checks for needed plumbing.
So, think of connecting medical research databases (or researchers). You occasionally get big visions like Julian Robertson who said, “The idea of starting a dialogue between experts in technology, cancer research and oncology - people who aren’t usually in the same room together - has the potential to create a synergy of ideas that could ultimately lead to improvements in outcomes for breast cancer patients.” http://finance.yahoo.com/news/big-data-breast-cancer-symposium-154000683.html
It’s easy to understand (but sad to see) why data created by individual cities (including police reporting) are local. It’s hard to bring datasets together that were built locally for one purpose. See James Comey “You can get online today and figure out how many tickets were sold to ‘The Martian,’ which I saw this weekend … The CDC can do the same with the flu,” said Director Comey, according to The Washington Post. “It’s ridiculous — it’s embarrassing and ridiculous — that we can’t talk about crime in the same way, especially in the high-stakes incidents when your officers have to use force.”http://www.csmonitor.com/USA/USA-Update/2015/1008/Why-the-government-has-so-little-data-on-police-violence
Bringing heterogeneous data together is work—extraction, transformation, loading. It is not sexy work but requires both programming and maintenance. This is a perfect area for “big bets” - with long term returns (as is the case with other infrastructure).
When the article talks about intermediary organizations, it mostly focuses on re-granting (ala Robin Hood). But there’s also a role for intermediaries in the diplomatic (and sometime technological) bridge building between institutions, cultures, and databases. And that takes work—and hence big bets.
BY Bob Johnson
ON January 24, 2016 12:57 AM
With respect. It is very simple when it comes to solving the crises in places such as Hralem, Detroit, Gary, Baltimore, etc. Focus your money on ending the War on Drugs, then focus it on the industries whom and individuals who profit mightly off of the glorification of.
Hard to do I know. Doubly so when the sitting President has concerts performed by said individuals. Snoop Dog, Jay-Z and more. What message does that send?