Giving Compass' Take:

• Dan Cardinali, writing for Stanford Social Innovation Review, discusses how big bets in philanthropy can help redistribute wealth and rebalance the power dynamic with nonprofits. 

• How are big bets different from the strategic philanthropy approach? 

• Read about the anatomy of big bets in philanthropy. 

If a core principle of civil society is to advance private action for public good, then “big bets” may be a critical instrument to help us achieve this objective. I believe big bets are an important development for philanthropy because of two trends.

The first is the increasing aggregation of wealth into fewer and fewer hands. We have a philanthropic structure that has been set up to, in a sense, redistribute wealth.

When an individual’s or a generation of family members’ wealth is so vast that it is unimaginable to possibly spend it, the practical reality is that the few who have so much will need to give it away in larger amounts—that is, start making bigger bets. Unless there is a significant change in the tax code, that is the only way we’ll see a substantive redistribution of wealth.

The second development is that the nonprofit sector has matured such that more organizations beyond universities and hospitals are prepared to absorb and deploy seven- and eight-figure gifts. We are seeing increasing numbers of nonprofits evolve beyond service delivery to focus on solving large-scale social problems, thereby creating the coin-of-the-realm investment opportunities that many philanthropists seek.

I would argue that big bets present an unprecedented opportunity not only to redistribute wealth but also to rebalance power within the philanthropy sector. Strategic philanthropy, that is, approaches where the funder’s and not the grantee’s strategy dominates, may never match this opportunity.

With big bets, donors can essentially turn over their resources with the informed belief that people of goodwill are going to bring the best professional expertise, vision, and values to bear on what are inherently adaptive challenges. To achieve this, philanthropists need to be more flexible and more willing to relinquish control.

Read the full article about big bets in philanthropy by Dan Cardinali at Stanford Social Innovation Review