Giving to Solve a Problem
Lately, we’re seeing real momentum among leaders and givers motivated by their faith to think more systemically and audaciously about solving big problems.
Our friends at Praxis are working to organize capital and entrepreneurial innovation around 34 “opportunities for redemptive imagination.” The Faith-Driven Investor movement has launched a platform to “Solve the world’s greatest problems” through Building, Investing, and Giving. The Christian Economic Forum describes its aspiration to “convene the world’s top problem solvers to advance God-inspired solutions.”
So if there’s a growing appetite to be more strategic, bold, and collaborative in tackling big problems, how can we shift philanthropic capital to enable these kinds of approaches?
Shifting Paradigms: Giving to Solve a Problem
Let’s start by considering how most people give.
Many generous families orient their giving around individual organizations, often based on recommendations from people that they trust. They might ask, “We care about problem X. Who’s doing effective work in that space?”
This is good stewardship – and yet I believe an even more effective approach is to reorient from giving to organizations to giving around a problem. Rather than focusing on who, our starting point is to ask, “What might it take for us to solve this problem?”
There are two primary reasons why a problem frame is a more helpful lens, especially for givers looking to invest larger amounts of philanthropic capital:
1. There are no silver bullets for complex challenges.
Some of the people I admire most are social problem solvers who are innovating and building well-managed organizations that are working with the kind of rigor that is more common in the business world. I love to come alongside organizations that are achieving outsized results.
And yet, even the most effective organization cannot solve a complex problem in isolation. Complex challenges like reimagining the foster care system are multifaceted and evolve over time, and solving one part of the problem often surfaces another barrier.
That’s why at Flourish Fund we build a portfolio of organizations tackling and innovating around different parts of the problem – and consider how our philanthropic capital can incentivize greater collaboration among organizations who are used to effectively competing with each other. We also bring a systems approach and invest in the softer but critical dimensions that shift the conditions that are holding a problem in place – reshaping cultural values and narratives, strengthening relational networks, or spurring policy or institutional changes.
2. A problem orientation can unlock greater generosity.
Many have written about the incredible, latent generosity that is waiting to be activated. Billions of dollars are sitting in donor-advised funds, yet givers find it hard to deploy larger dollars.
The reality is that it’s really hard to give well, especially at a significantly greater scale. I remember a conversation I had with one extraordinarily generous giver who told me, “We are currently giving away millions each year, but we could be giving 5x or 10x that amount.” I asked, “What’s holding you back from writing a larger check?”
He was concerned that the organizations his family supports couldn’t actually absorb larger gifts – that such gifts may actually do harm. This is not unfounded. Though early results from Mackenzie Scott’s giving suggest that these risks may be overblown, absorption and sustainability are legitimate concerns.
The result is that most gifts to individual organizations stay in the “safe” range. One large study of family foundations showed an average grant size around $25K, with an average duration of one year.
It’s no wonder that many generous givers feel frustrated that, in spite of generously supporting individual organizations over many years, they struggle to see anything that “moves the needle” on a big issue that matters.
Intermediaries…and Stretching People’s Imagination for What’s Possible
So if there’s momentum and potential around taking a problem frame, why isn’t this happening more often?
Most simply, this kind of giving approach is hard to do on your own. A large-scale strategy requires an intermediary who’s able to devote the energy, know-how, and resources required to deeply analyze and understand a problem, shape a rigorous investment thesis, vet worthy organizations and leaders, and pool capital from high-capacity givers. Executing such a plan is even harder.
These kinds of strategic, collaborative intermediaries are common in mainstream philanthropy, with examples like Blue Meridian Partners, Rockefeller’s Co-Impact, Legatum’s Freedom Fund, or the City Fund advancing education reform. Consulting firms like Bridgespan play a key operating or advisory role in several of these initiatives.
There are some examples for givers motivated by their faith – the most notable being the IllumiNations collaborative alliance on Bible translation. But we could do much more of this kind of problem-framed, thesis-driven investing, fueled by collaborative giving. This kind of giving approach, facilitated by a trusted intermediary, minimizes burdens on both givers and problem-solvers. And most importantly, it could unleash more of the flourishing of people and places that God desires. That was my motivation for launching Flourish Fund.
So what does a bolder, collaborative, problem-based approach look like in practice? We’ll come back to that in a subsequent blog post! But we are encouraged by the generous families and partners who are coming alongside us, validating our model. And we’d love for you to consider joining us on this journey!