At NPQ, we have, from time to time, examined the impact of philanthropic big bets. The Gates Foundation, the nation’s largest private foundation, is well known for its proclivity to “swing for the fences,” with mixed results (more success in global health, less success in US education). The MacArthur Foundation, too, has engaged in “big bet philanthropy” with its $100 million (“100&Change”) grant competitions, with similarly mixed assessments to date. 

The principle behind such efforts is for philanthropy to eschew risk aversion and instead purposefully take risks to advance practice in a field. As John Palfrey, president of MacArthur, puts it, “If philanthropy doesn’t act as society’s risk capital, we’re making a terrible mistake.” In short: nothing ventured, nothing gained.  

In this context, the decision announced in 2019 by the Kendeda Fund, an Atlanta-based private foundation, to commit $24 million as it was spending down its assets, might be considered a “little big bet.” Nonetheless, at $24 million, it was the single largest philanthropic investment ever made to support employee ownership. 

Now, a report from the Ohio Employee Ownership Center (OEOC) at Kent State University (which was not one of the four grantees) offers a preliminary assessment. Authored by OEOC Director Chris Cooper and Program Coordinator Michael Palmieri, the report, Employee Ownership at the Crossroads: Reflections on the Kendeda Fund’s Big Bet on Employee Ownership, examines how Kendeda’s bet has turned out so far—and highlights some lessons learned from the four organizational beneficiaries.

As the term suggests, the idea behind big bet philanthropy is to pour large amounts of resources into a small number of groups, with the goal of shifting practice throughout society. This is the possible “big gain” of the big bet.  

In a foreword to the OEOC report, Diane Ives of the Kendeda Fund offers four primary objectives (paraphrased here): 1) increase the number of employee-owned businesses, with an emphasis on encouraging the development of those that are run democratically and address the economic and racial wealth gap; 2) use grant dollars to leverage additional investments; 3) strengthen core elements of a supportive ecosystem; and 4) amplify coverage of employee ownership in the media. 

To do this, the foundation initially made investments in four organizations—the Fund for Employee Ownership (part of Evergreen Cooperatives), Nexus Community Partners, the ICA Group, and Project Equity. The first organization is an Ohio-based loan fund subsidiary of an employee-owned business nonprofit holding company, the second is a Twin Cities-based funding intermediary, and the last two are nationally focused nonprofit technical assistance organizations (with ICA Group based in Massachusetts and Project Equity based in California). Additionally, two years in, Kendeda made a $1 million grant to seed a joint-communications strategy of the four groups, branded as EO Equals (or Employee Ownership Equals).

Read the full article about big bets on employee ownership by Steve Dubb at Nonprofit Quarterly.