An anonymous donor got some buzz a few weeks ago with its call on Innocentive for “extraordinary and unorthodox” philanthropic opportunities. It seeks a project that “holds the potential for a transformational impact,” “is unlikely to attract funding elsewhere due to its risky, unorthodox, and/or neglected profile,” and will be able to “attract additional capital from other sources” after the initial “catalytic” funding.
Perhaps ironically, this RFP sounded very familiar to me. In fact, it’s hard for me to see a big difference between it and the $100 million Gates Grand Challenges Explorations, “a unique initiative that supports innovative research of unorthodox ideas” in global health (though the Innocentive proposal above does not explicitly specify a sector, all three of its examples are in global health as well).
Speaking more informally, I’ve heard similar concepts emphasized by most major funders I’ve spoken with. Anyone who has dealt with major foundations should recognize the desire to find a completely new, revolutionary, neglected opportunity that just needs some seed funding to explode.
I do believe that the best opportunities are the under-funded ones. Yet I’m not sure that tiny, neglected innovations are the best places to look for these opportunities – precisely because that’s where all the major funders seem to be looking. I submit that the better place to look for neglected opportunities is the “valley of death” between proof of concept and large-scale rollout.
“Valley of death” is a term from both the investment and research communities. In both cases, broadly speaking, it refers to the difficulty of getting funding between the earliest stages of a project and the latest stages of a project, where investors have neither a sure thing nor a “lottery ticket” for the glory of being “first.”
I believe that the world of philanthropy suffers from its own “valley of death.”
Programs that have enough traction often aim for funding by the government (for example, the Nurse-Family Partnership program has had some success with this). Programs in their earliest stages appeal to foundations’ hunger for bragging rights. But what about VillageReach, which had a single successful “proof of concept” pilot project (initially funded by the Gates and Skoll foundations and the World Bank Development Award) and now needs transitional funding to roll out its model across Mozambique? Large foundations have, to date, declined to fund the rollout, in some cases specifically citing their preference for establishing models rather than rolling them out.
There’s no glory in funding the VillageReach rollout. VillageReach already has shown that what it’s doing has worked; nobody can claim to be brilliant for spotting it. And VillageReach doesn’t need help designing its program (this has been cited to me explicitly as a drawback from the perspective of some major funders).
But if it doesn’t get funded, it isn’t going to happen. If it does, it could change the world. It is, in fact, a fantastic opportunity.
If you asked me which funders are going to have the greatest impact over the next decade or so, I’d bet on the funders extraordinary and unorthodox enough to forget about being “extraordinary and unorthodox” – and instead put in a bid for the Smart Money Award.
Your insightful blog shows a real understanding of the gap in the social capital markets and its inability to fund proven, mid-sized social ventures. The result is that highly effective social problem solvers have their impact constrained by lack of growth capital. That is the reason that Social Venture Partners International is creating the Social Ventures Mezzanine Fund to help take social ventures that have established proof of concept in a city or region go to national scale. We hope to launch the fund by mid year 2011.
completely makes sense in theory / in my previous experience, but is there data to back it up? given the nature of this site, i think it makes sense to ask.
James, I don’t have any data on this beyond what’s in the post, and what facts I do have pertain to private conversations with funders that I have been denied permission to share.
As a reminder, our goal is not to “prove” every statement we make nor to back every statement up with unambiguous and clearly representative data, but to make the basis for every statement we make clear and transparent. We use relevant facts whenever they are available and strive for clarity as to when we are discussing what the evidence proves vs. suggests vs. loosely points to when coupled with intuitions. But that does not mean the latter is absent from (or rare in) our analysis.
+1 on James E D’s comment above. Holden, I read your response, but then you could raise the bar a bit in the way your posts are written to meet your statement.
You say ‘As a reminder, our goal [..is…] to make the basis for every statement we make clear and transparent’
I think you already have a clear writing style that points to sources of statements; maybe you just need to emphasize even more what is the source for your assertions, e.g.:
– ‘Data from our charity review suggests that ___’
– ‘a recurrent comment we hear from charity leaders is that __’
– ‘we have heard at least 3 funders say something like __’
– ‘our team’s intuition is that __’,
– ‘my personal feeling or intuition is that ___’
and maybe more importantly, expose implicit assumptions about data with explicit statements like ‘(I haven’t checked this against the information we have)’
Thanks for pushing for a more facts-based, science-centric approach to this sector! I believe it’s needed, and I also wish there was more demand for it.
Eduardo, I think we are fairly close to this in the content on our main website – interested in your feedback.
We don’t hold ourselves to quite that standard on the blog. We’re willing to trade off a little rigor for some readability and writability on the blog. But if you’re ever unclear on what I’m basing a specific statement on, please ask in the comments (as James Edward Dillard did here).
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