The MacArthur Foundation is doubling its commitment to its 100&Change program, pledging a second $100 million to its innovative grant-making strategy, which had nonprofits buzzing three years ago when the first round of funding was announced. The foundation will also spin out a separate organization to attract donors to smaller grant competitions.
The recipients of the Chicago grant maker’s first $100 million, announced in December 2017, were Sesame Workshop and the International Rescue Committee, which are using the funds to provide educational materials and television programming for children in the Middle East who have been affected by the Syrian conflict.
The next $100 million round will again be open to organizations working anywhere in the world on solving big problems. MacArthur will begin accepting applications online starting April 30.
MacArthur’s 100&Change allows the foundation to explore new, ambitious ideas, by casting a net outside of its regular programs, says Julia Stasch, the foundation’s president.
The announcement of the first round of funding got scores of nonprofits excitedly working on grant applications for an infusion of funding big enough to transform their operations and make a dent in some of the world’s biggest problems. MacArthur surprised applicants by giving $15 million each to three other finalists, Catholic Relief Services, HarvestPlus, and Rice 360° Institute for Global Health at Rice University.
Spinoff Benefits
MacArthur hoped that its 100&Change program would have far-reaching benefits even for those nonprofits that didn’t win the big prize by spurring innovative, big-picture thinking among all the applicants. This time around, it’s formalizing that goal by creating a new organization, called Lever for Change, and seeding it with $20 million over the next four years. LinkedIn founder Reid Hoffman has pledged an additional $5 million, plus $5 million in tech support, if needed.
Lever for Change will make open calls for proposals and work to identify donors to supply grant money for the winners. The amount awarded will be smaller, starting in the $10 million range. The idea is that the competitions will allow MacArthur and other donors to develop a pipeline of projects they can test before making even bigger investments.
“An open competition absolutely makes it possible to reach beyond known parties, known collaborations, and even known solutions,” Stasch said. “We all become captive of who we know and what our experience has been.”
Lever for Change will be run by Cecilia Conrad, a MacArthur managing director. Conrad, who also leads the 100&Change effort, already has a few grant competitions in the works.
In 2020, Lever for Change plans to hold a competition with Lyda Hill Philanthropies focused on economic opportunity in Texas. Another regional competition will be announced within the next few months. Two other competitions supported by anonymous donors are also planned. One will support programs in economic opportunity in the United States, the other on global climate change.
The new organization also is working with Earth’s Call, a climate-change grant maker that plans to spend $50 million on climate-change mitigation, and with Iconiq Capital and Asian Venture Philanthropy Network, to help those organizations identify for their clients philanthropic investments that have gone through a vetting process.
‘Big Bet’ Philanthropy
100&Change and its offspring, Lever for Change, join other efforts to get rich donors to combine their wealth to make high-dollar grants to programs designed to make vast improvements in the lives of entire populations. Other examples of this sort of big-bet philanthropy include Blue Meridian Partners, a $1.7 billion donor collaborative to help children escape poverty that was spun out from the Edna McConnell Clark Foundation in October. Another, Co-Impact, is a group of wealthy donors including Bill and Melinda Gates that hopes to inspire Giving Pledge signers to direct their billions to effective causes. And last year the Audacious Project, a grant-making competition led by TED (in which MacArthur is also a partner), committed a total of $480 million to seven organizations after an open call for applications.
These donors have the cash. But megadonors scouting for the next big idea to support often find a lack of “shovel ready” projects available to absorb multimillion dollar investments, Conrad says. That’s where Lever for Change fits in.
“We see ourselves as complementing those existing efforts, most of which focus on bringing like-minded donors together,” she said. “We are uncovering a wide array of promising solutions that exist across the globe and across domains. “We’re able to help them with that sourcing effort.”
The new organization will be affiliated with the MacArthur Foundation but will have separate offices from which it will try to connect applicants with wealthy donors and family foundations. Stasch hopes the new entity can make inroads with wealth advisers, family offices, and other professionals by expanding the services they can provide to clients.
“Even though it will be relying, in many ways, on MacArthur services and MacArthur expertise, it is a different cultural environment,” she says. “MacArthur is a grant-making entity, and Lever for Change is a relationship-support mechanism.”
MacArthur is also tweaking the existing 100&Change process as it readies its second round.
Fewer than half of the 1,904 proposals MacArthur received in the first round passed an administrative review. Many groups that didn’t clear this basic hurdle didn’t have an existing base of evidence. They were simply “blue-sky” proposals or requests to run a pilot study rather than a fully baked plan for administering a nine-digit grant.
The current round will feature online questionnaires to help potential applicants determine if they have a chance.
“We want to make sure we give applicants more tools to self-assess whether this is the right place for them to start looking for funding,” Conrad says.
MacArthur will also provide more formal feedback to applicants, particularly on technology issues, as they wend their way through the process, and each applicant will be expected to review a selection of other applicants.
Another grant maker, GHR, instituted a similar peer-review process in its $1 million BridgeBuilder challenge, which debuted in 2017.
Finding Worthy Causes
In the 100&Change competition, only one cause will receive the big gift. And in each competition hosted by Lever for Change, there will be many more losers than winners. But Conrad and Stasch hope the process of narrowing the field will draw attention to efforts that deserve support. Following the initial round of 100&Change, MacArthur and the Foundation Center put searchable, sortable information about the applicants on a website called the Solutions Bank. The applicants were further reviewed by the Center for High Impact Philanthropy at the University of Pennsylvania to give potential donors a sense of the “best bets” they could make with their philanthropic dollars.
Catholic Relief Services, Lumos, and Maestral International did not get picked for the $100 million grant during the first round of 100&Change. But the three organizations were finalists, and MacArthur provided them with a single $15 million grant to protect orphans and strengthen families in seven countries. The project aimed to strengthen government programs for family health care and social services and educate donors about how orphanages can have detrimental effects on children.
The lengthy application process prodded the groups to “step back” and evaluate how they could have a bigger impact.
“It gave us license to dream big,” says Michele Gilfillan, Catholic Relief Services director of foundation and corporate engagement.
Since participating, CRS has received $9 million from the GHR Foundation and USAID. The international nonprofit had relationships with both organizations before the MacArthur competition. But Gilfillan says the 100&Change award helped draw attention to its work and helped the donors unite in their efforts. She said the imprimatur of the MacArthur award has generated a lot of interest in her organization’s work, and she hopes more money will follow.
Funding the ‘Back Roads’
In November, a Gates-supported study by the Bridgespan Group found that ultrawealthy Americans — those who each hold more than $500 million in assets — give on average 1.2 percent of their wealth away each year. If that amount were doubled, the study found, it would unlock an additional $45 billion of charitable giving.
The problem, according to Bridgespan, is that there is a “four lane highway” guiding those gifts to established institutions like schools and medical centers.
“When it comes to funding efforts to confront pressing social, environmental, and economic challenges,” the report says, “charitable giving quickly offramps into slow-going back roads.”
The 100&Change and Lever for Change competitions, Stasch says, are ways nonprofits can increase their aspirations and craft more expansive approaches to the problems they try to fix. By doing so, maybe they can make it easier for wealthy donors to make large social investments.
“The money available from traditional philanthropy and even from large-scale, technology-driven entrepreneurs still isn’t sufficient,” she says. “There’s still enormous amounts of money on the sideline.”
