Large Foundations Making 'Big Bets' on Social Change

A growing number of large, national foundations are making "big bets" on structural solutions to complex problems in an effort to bring about lasting social change, the New York Times reports.

Earlier this year, for example, the Ford Foundation announced that it was refocusing its grantmaking — about $500 million annually — on inequality in all its forms, while the Rockefeller and MacArthur foundations announced that they are redoubling their commitments in the areas of climate change, urban resilience, and criminal justice reform. Philanthropic organizations have long supported efforts to alleviate poverty and inequities, of course, but many of the largest increasingly are seeking to address not just the symptoms but the structural causes of those problems — inspired, in part, by the Bill & Melinda Gates Foundation's efforts to not only treat or prevent diseases such as polio and malaria but to eradicate them altogether, the Times suggests.

"As the levels of wealth coming into the nonprofit sector grow, as the aspiration to see actual change in the world continues to grow, people are beginning to focus on these big bets," said William Foster of the Bridgespan Group, who argues in a paper to be published in the Stanford Social Innovation Review this month that the amount of money being allocated to social transformation has grown since 2002.

"Over the past one hundred years, foundations have felt very comfortable addressing issues of poverty and inequity with behavioral solutions: Teach people how to save. Teach people how to read," said Erica Kohl-Arenas, assistant professor of nonprofit management at the New School. "Capitalism produces inequality. Now we have these big institutions looking at the structural causes."

At the same time, large foundations making big bets also face challenges, with critics of such efforts often dismissing them as thinly veiled social engineering. Facebook co-founder Mark Zuckerberg's $100 million investment in public school reform in Newark, New Jersey, initially was greeted by a wave of enthusiasm, for example, but the decidedly mixed results that followed have led to recriminations and finger-pointing. What's more, the renewed focus on structural change may mean that some grantees whose work doesn't align with a foundation's new approach may lose their funding. Or, as Ford Foundation president Darren Walker said, "We are expecting a number of difficult conversations in the days ahead."

Still, says Rockefeller Foundation president Judith Rodin, "We're trying to transform systems and create tipping points, not just make individual grants to individual organizations." And if real social change takes time and is difficult to measure, many philanthropists have come to the conclusion that the way to achieve big goals is to set lots of shorter-term ones and achieve them. "We don't have to wait twenty-five years to see if it works," said Rodin. "We're monitoring all the time."

David Gelles. "Major Foundations, Eager for Big Change, Aim High." New York Times 10/31/2015.