The Billion Dollar Question

What If Philanthropy Stopped Playing It Safe?

May 19, 2025

It was a quieter time when I first wrote the chapter below. The 2024 election hadn’t happened and the current tsunami of DOGE-inspired social infrastructure cuts had not yet begun. If there’s a silver lining to the current administration’s aggressive approach to eliminating public funding for social causes, it is the effect it’s started to have on how large-scale philanthropy understands its role and timeline. While many foundations are still stuck in a scarcity mentality, concerned with legacy and longevity over immediate impact as described previously, the last few weeks have seen some remarkable announcements from some of the world’s largest foundations.

Most notably, The Gates Foundation announced it will accelerate its giving and double its spending over the next 20 years, committing roughly $200 billion to advance global health and equity.^[1] The Marguerite Casey Foundation plans to increase donations this year an impressive 5X to $130 million to help nonprofits respond to federal funding cuts and what it calls threats to the independence of civil society organizations.^[2] Sobrato Philanthropies plans to contribute more than 25% of its philanthropic assets across a range of priorities, including $150M for economic mobility, affordable housing, and educational equity.^[3] And major players like the Robert Wood Johnson, Skoll, and MacArthur foundations have all pledged to increase their grantmaking substantially to meet the moment.

I would also be remiss not to mention those philanthropic organizations that previously committed to aggressive spend down strategies, starting with Atlantic Philanthropies and since joined by foundations like Stupski and Daphne (Abigail Disney), who actively speak out in favor of more aggressive spend down strategies and seek to serve as examples for others to follow. And of course, Warren Buffett’s announcement last year that his children would only have 10 years after his death to allocate what remains of his $143 billion fortune via a charitable trust.^[4]

These are extraordinary steps and worthy of much celebration, and yet I would postulate there’s still a significant opportunity for philanthropy as a field not only to step up in response to recent cuts but also to act as risk capital to fast-track efforts to move us from our current broken political and economic system to one that prioritizes the wellbeing of people and the planet.

Putting Philanthropy’s Power to Work

There is no more room for business as usual. The people and planet are demanding that we build a vision for philanthropy, let go of practices that no longer serve us, and create new ones that move us forward.
- Crystal Hayling, retired executive director, Libra Foundation

What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best ‘risk capital’ out there.
- Peter Buffett, composer and chairman, NOVO Foundation

Risk is hard, but if ever there was a community suited to embrace risk in philanthropy, Silicon Valley should top the list. Technology entrepreneurs and venture capitalists make their fortunes through the savvy investment of risk capital toward outsized market opportunities, so there’s no reason that they can’t apply the same thinking in philanthropy. Yet they, like so many other business people in philanthropy, are often the most risk averse, missing out on game-changing prospects in favor of safer, more conventional bets.

MacKenzie Scott was an early first mover in this arena starting in 2019. As of early 2025, she has donated over $19 billion to more than 2,450 nonprofit organizations, with studies showing positive results in organizational impact and capacity, despite donor fears that significant gifts without “strings attached” would result in mismanagement.^[5] She shifted the Overton window of what was considered reasonable and feasible, proving that large grants to established organizations without requiring significant overhead is not only reasonable but actually quite smart.

Now is the time for others to follow suit, making larger commitments, de-risking promising avenues for giving that have yet to become mainstream, and coming together in substantial collaborative funds to bridge funding gaps. Risk-forward social investment opportunities run the gamut from small grants supporting promising new approaches, to providing flexible capital for established organizations, to addressing the funding cliff for proven innovations, to creating the connective tissue required for networks of related organizations to coordinate for maximum impact.

First among these opportunities are proven interventions for the world’s most pressing problems. Many such organizations are ready to expand their reach to new populations but are encountering funding ceilings that limit their ability to scale. The Audacious Project and Co-Impact were founded to provide multiyear support for just these types of opportunities, with $1 billion and $800 million raised, respectively, and deployed in 5-8 year commitments to individual grant recipients. And yet there is still a “cliff” at the end of that time where the need and momentum behind these models remains strong but there is still no funding source to carry the work forward. Organizations are left with the difficult choice of scaling back their footprint or diluting their models to match the available support.

At the other end of the spectrum are opportunities to put more philanthropic dollars directly in the hands of beneficiaries, such as cash transfers to those facing structural barriers to emerging from poverty. There is currently very little transparency on how much of any philanthropic donation actually reaches communities versus what those communities need, and new mechanisms will be required to bypass the layers of well-meaning social service organizations that absorb the majority of funding. Few are as entrepreneurial as people with limited resources, and transferring cash directly to those who need it enables the recipients to spend money exactly where it can have the greatest impact.

Such efforts have been successful in a variety of settings, including with low-income populations in US cities such as Stockton, California, for aspiring first generation college students who need funds to cover books or medical expenses, and by the World Bank in low-income communities around the world. Transfers are typically small and offered without constraints, and studies show they have a wide range of positive outcomes on asset growth, earnings, food security, psychological wellbeing, and a reduction in domestic violence.^[6] They also disintermediate the funding power dynamic by acknowledging, respecting, and trusting in the autonomy of people to make choices for themselves. All of which is not to say that nonprofits are unimportant, but rather that additional avenues to get money directly into the hands of the poor will only improve the likelihood of positive outcomes.

On a side note, cash transfers don’t need to be a “forever strategy.” They can be a critical tool during times of significant job dislocation and societal transformation, providing the security that enables people to cover basic costs as they find new pathways for success through retraining, upskilling or launching their own businesses.

Finally, as philanthropy acknowledges the systemic nature of the challenges before us, it must also invest in organizations that provide the connective tissue enabling individual players with overlapping agendas to operate as a field. These efforts establish networks of related organizations, which improve communication and build trust, enable shared goals, and facilitate collaboration. For example, where a group of education nonprofits may each be doing good work in the same geography, they could all benefit from coordinating to eliminate duplication of services, communicating about effective interventions with hard-to-reach children, and advocating collectively for increased state education funding.

This collaborative approach, which requires a committed organization to cultivate the collective space, is indicative of a new way of thinking, moving away from the heroic individual organization. And the price tag for such an intervention is relatively low. At a recent gathering of such organizations, a poll was taken to determine how much funding they needed to reach their goals successfully, and most just needed $2.5-$5.0 million.

Similarly, at a 2024 gathering of 35 organizations that received the Skoll Award for Social Innovation and were also selected for funding from MacKenzie Scott, participants were asked how much additional funding they required to achieve their big vision, and the total identified need was $4 billion. In rough numbers, this would suggest that similar funding for all 1600 Mackenzie Scott grantees would be less than $200B, which pales in comparison to the $1.8 trillion currently held by foundations and DAFs.

So as strategic advisor Bradley Myles highlighted, “we have all the ingredients” to make a significant leap forward. There is enough wealth in foundations and DAFs, sufficient high-caliber entities to use those funds effectively, and enough intermediaries to act as connective tissue and coordinate a field-level response. It is “totally doable” but requires the personal and political fortitude to make that leap and treat at least a portion of philanthropic dollars as risk capital, rather than cherished funds to be protected and saved.

All of which leads to the question, how can we become more comfortable giving more? Regarding the motivation to support philanthropic causes, the answer is that our brains are wired for giving. The brain’s altruism center is considered part of its primitive structure. When we help others, our brains release dopamine, serotonin, and oxytocin, which collectively are known as “the happiness trifecta,” producing a “helper’s high” which improves mood and reduces stress and anxiety, along with a host of additional health benefits.^[7]

Perhaps from our earliest nomadic days, those who helped others were more likely to receive help, and certainly we survived better collectively than we did alone. And seeing others act differently – perhaps in a way we thought was not possible – breaks down our psychological barriers, causing us to believe change is possible and leading to behavioral change. Therefore, the more we see others be ambitious with their generosity, take risks and absorb failures, the more likely we are to do the same.

This reality brings us to the importance of peer-to-peer philanthropic networks like Forward Global and Social Venture Partners. While the dominant philanthropic culture still trends conservative, philanthropy executive Renee Kaplan sees hundreds of high-net-worth families setting ambitious strategies and putting significant funds to work for humanity in ways that are moving the needle on issues that matter.

We need to do more to elevate those examples through effective storytelling, packaging, and distribution, inspiring others to see what is possible and seek to do likewise. We also need coordinated mechanisms for aggregating the funds to address the issues at hand at the scale of the problem, not just at the edge. We need what Chris Anderson coined “infectious generosity”to create a widespread movement of giving that benefits the giver, the receiver, and society as a whole.^[8]

And on a final note, we can all take a page from philanthropy executive Crystal Hayling’s Vision for the Future of Philanthropy, which lays out a clear blueprint for how the nature of philanthropy must evolve to suit the times in which we live. I encourage everyone to read this Stanford Social Innovation Review article in full, and then join me in manifesting the day when philanthropy is organic and reciprocal, grounded in principles of regeneration, interconnection, experience, truth, and love. This is truly a recipe for hope and optimism.

The Elephant & Butterfly

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