FAMILY OFFICES ARE INCREASINGLY MAKING A PROFOUND AND SCALABLE IMPACT IN PHILANTHROPY -- LOOKING AT CHARITY MORE LIKE A BUSINESS.

Because money alone cannot change systems, these billionaires are trying something new

By Catherine Cheney catherinecheney22 November 2017

Billionaire philanthropist couple Bill and Melinda Gates. Photo by: Monika Flueckiger / World Economic Forum

SAN FRANCISCO — With 800 million people living in poverty in India, social change is not an option but a necessity, says the team at Dasra.

“Given the scale and complexity of challenges in India, the government, private sector, and civil society are increasingly recognizing that they need to join forces to make a significant impact,” said Neera Nundy, co-founder of the strategic philanthropy foundation, explaining how Dasra brings stakeholders such as entrepreneurs and funders together on common platforms, on the website of a new initiative that takes a similar approach. “Our hope is that this approach of high-impact collaborative philanthropy will soon become widespread in India and other parts of the world.”

Last week, a group of leading philanthropists including Bill and Melinda Gates and Jeff Skoll announced Co-Impact, a philanthropic effort that is like Dasra, but aims to work across the developing world, beginning with $500 million worth of investments to advance health, improve education, and provide economic opportunity. It aims to serve as a new model for collaborative philanthropy. Co-Impact will connect established and emerging philanthropists and social change leaders with each other, provide systems change grants of up to $50 million over five years, and leverage additional support through partnerships with others in the public and private sector. 

Aside from a handful of initiatives, most giving in the philanthropic sector is short term, in amounts of $10 million or less, and given to a growing number of individual organization. But Co-Impact plans to invest in proven solutions that are ready to scale beyond what individual organizations could do alone, providing them with the kind of support they need to change underlying systems. Given the growing recognition that collaboration will be key in solving complex global challenges, the Co-Impact model is worth exploring, even before its first grants are made in the first half of 2018.

More than money

Olivia Leland, the founder and CEO of Co-Impact, was formerly executive director of the Giving Pledge, a campaign that asks billionaires to give more than half of their wealth to philanthropy, founded by Bill and Melinda Gates and Warren Buffett.

But while the Giving Pledge was focused on how much donors give, Co-Impact is organized around the question of how they give, with an emphasis on collaboration, long-term support, and partnership with other actors, including local communities, nonprofit organizations, governments, businesses, and donors. 

Since leaving the Giving Pledge, Leland has conducted interviews with hundreds of philanthropists and social change leaders — and she said she found a disconnect between the two groups.

Leland realized the sector must overcome three barriers in order to bridge this divide, which she summarized in a recent article for the Stanford Social Innovation Review. First, she said, most giving remains small and fragmented; second, while many people may have the vision and ability to change systems, few have the strategies, capabilities, and partnerships required; and third, that there aren’t enough ways for philanthropists to connect and collaborate on investments across borders.

Leland designed Co-Impact to tackle each of these barriers. The venture was incubated at the Rockefeller Foundation, where Leland works as a managing director, working to bring collaborative approaches to its initiatives. 

“We live in a pivotal time where many people across the world are struggling to attain the very fundamentals of human well-being. Yet we know it is possible to help even the most vulnerable of families move themselves out of poverty, send their children to school, and protect those children from simple, but too often deadly, diseases,” said Dr. Rajiv Shah, president at the Rockefeller Foundation, in a press release about Co-Impact.

“Achieving these goals will require a focus on fundamentally changing the way philanthropy, social change leaders, governments, business, and civil society work together — and that is the kind of collaboration and partnership that Co-Impact will enable,” he said.

The Rockefeller Foundation is Co-Impact’s one institutional core partner, together with billionaires Bill and Melinda Gates, Jeff Skoll, Richard Chandler, and Romesh and Kathy Wadhwani. The EkStep Foundation, founded by billionaire couple Rohini and Nandan Nilekani — who also joined the Giving Pledge over the weekend — will serve as its technical partner, building on a background investing in open digital public goods. But in an interview with Devex, Leland explained that this is not a donor collaborative, and emphasized how beyond the core partners, the collaborative will include lower-level investors and members.

“We intentionally say these are the three broad areas [health, education, and economic opportunity] we’re focused on, but that doesn’t mean things have to fit squarely into one or the other,” she said. “And that’s often the challenge you hear from organizations: ‘How do I fit within the strategic area of the funder?’ Within each of these areas, there’s so much interconnectedness, and therefore we will especially look at opportunities that do cut across.”

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Coordination and collaboration

The idea that the poor could be creditworthy led to the launch of microfinance. The idea that communities, not just governments, would care for natural resources turned into community-based natural resource management. The idea that poor nutrition kept children from learning gave way to reduced-fee school lunch programs and the field of public sanitation. 

“Systems thinking in philanthropy has been around for a long time,” said Heather Grady, vice president of Rockefeller Philanthropy Advisors, mentioning these examples as transformations launched by foundations in an email to Devex. “But it normally takes a portfolio approach to supporting a range of grantees, and a deep understanding of the complex, adaptive system in which the problems, challenges, and opportunities sit. One system entrepreneur can’t do it alone. Moreover, the experts are those closest to the problems. That means those on the funder side need to respect and take time to learn from the grantees, and not just fund those close to the funders; and create a sufficiently long funding period for deep, systems-level shifts to happen.”

She mentioned a report she was behind, which launched at Global Goals Week in New York City in September. The report outlined five ways funders could change behaviors: by shifting the power dynamics; looking beyond financial support; building a knowledge base; working together to ease the burden; and changing the way they give. She applauds the Co-Impact effort, she said, and hopes they will learn from longer term examples that demonstrate how change happens — which is generally not as fast as some might hope. 

“What's really new?” asked Michael Jarvis of the Transparency & Accountability Initiative, a donor collaborative, in a newsletter to subscribers. It’s “hard to argue that Gates funding has been small to date — big bets and pooled funding mechanisms are well tested, so perhaps the real impact will be in providing the space for the Nilekanis, Gates, and Skolls to share, compare and jointly strategize, and encouraging coalitions of social change leaders (potential recipients) to do the same.”

Romesh Wadhwani, one of the core partners, told Devex he believes there are three reasons Co-Impact has the potential to be a powerful force in philanthropy. The first reason is the focus on large-scale impact, which is how he defines systems change, because we live in a complicated world where the needs are great and differ from one country to the next. The second is the global focus, he said, explaining that while the culture of giving in the United States is well established, it is not universal, and it is critical for entrepreneurs to have support from donors closer to the problems they are trying to solve. The third reason is what he called “knowledge synergy” — the opportunity to share lessons that were learned individually but can be applied collaboratively, noting that each of the core partners bring different core competencies to the table.

“Yes, Co-Impact brings money, that’s for sure. But it brings a lot more than money. Money can come from a whole bunch of different sources, but most sources don’t have the ability to provide this additional capability,” he said. “We are leveraging the collective expertise and experience and tools and capabilities of each of our respective foundations.”

Wadhwani talked about his plans to persuade local donors in emerging markets, saying the key is not to talk about ideas in the abstract, but to offer specific projects with expected outcomes that resonate with their top priorities — finding philanthropists for whom that mission is important, then having them join on a project-by-project basis.

One question Leland is asking herself — and one she hopes to engage with the global development community around — is how philanthropy can most effectively partner with and leverage additional resources from development institutions, multilaterals, and governments. With the exception of a small number of efforts — among them Blue Meridian Partners, a partnership of philanthropists focused on solving problems faced by children living in poverty in the U.S. — most of the philanthropic sector is focused on scaling individual effort. There is a need for philanthropy to step up, especially now, given concerns about the future of official development assistance, Leland said. 

“Within our team and with donors who are a part of the core group, we have said we intentionally wanted this to be a humble launch, because we will measure our success based on the results of the work,” she said. “We're really excited about this milestone and we recognize it as that. We're particularly focused on what comes now, and specifically the support that we provide to drive large-scale results, which is how we'll measure our success.” 

And one of the key questions Co-Impact will face moving forward is how to measure its effectiveness and report its specific impact back to its donors while still recognizing that it is part of a much broader system, she said.

Read more Devex coverage on philanthropy.