Investing in Parents as a “Big Bet”

During this webinar, we learned how “big bet” philanthropy is changing the ways that social entrepreneurs, nonprofit organizations, donors and advisors are working to have an impact on major social challenges. In a conversation moderated by Steve Hannon of LENA, William Foster and Sridhar Prasad, both of The Bridgespan Group, shared their research into the large philanthropic gifts — $10 million or more — that can provide an organization with the time and space to think creatively and expansively about strategies for solving the underlying problems of the issues they are addressing.

Although many large donors aspire to drive social change through their gifts — whether they seek to end malaria, homelessness or childhood obesity or achieve other ambitious goals — only about 20 percent of their big-bet investments are directed toward these causes, with the large majority going to universities, medical research or cultural institutions. The reasons for this aspiration gap include both mindset challenges — funders’ temptation to wait for better opportunities and wariness of the public risk with little public reward — and deal-making challenges — lack of personal relationships, difficulties of measuring social change and lack of opportunities structured and ready for a “big bet” investment.

To help social change organizations break through these challenges, Foster and Prasad shared what their research suggests were the five key elements of a compelling “big bet” investment concept: 1) addresses an important problem; 2) explains the point of arrival and what can be achieved; 3) offers a credible path to the goal; 4) articulates why philanthropy is required; and 5) demonstrates that the organization has a strong leader and team. Many social change organizations focus on the problem they are seeking to address and the strength of their team, but overlook the other three, preventing them from converting supporters into big-bet investors. 

Steve Hannon shared the example of LENA, which was born out of a big-bet investment by its founders, Terry and Judi Paul, entrepreneurs who recognized the importance of accelerating language development in the early years. Foster and Prasad shared other real-world examples of big-bet investments focused on parents, including the Harlem Children’s Zone and Nurse-Family Partnership.

They also discussed some strategies for making the case for these types of ambitious long-range investments where the impacts are seen when young children grow into adulthood. Comparing the results to chapters of a book, they explained that an investor might not see the end of the book — adulthood — but social change organizations could point to credible results in subsequent “chapters” – in the next 3–5 years.