MacArthur: Philanthropic Powerball Is Cool, But How About These Tweaks to the Rules?

The MacArthur Foundation has made some big changes in the past year, with incoming President Julia Stasch chopping away at what many perceived to be an overgrown suite of priorities. A lot of these have been admirable moves, including its launch of a major new climate initiative.

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The foundation's latest move has intrigued many in philanthropic circles and beyond—the new program 100&Change will take a truly unique approach to giving, creating a wide-open competition that will reward one lucky winner with $100 million to solve a problem. The subject? Anything. The applicants? Anyone. 

It’s a bold program for such an established foundation (MacArthur has been around since 1970 and has around $6.5 billion in assets), the likes of which are frequently criticized for being stodgy and stuck in their ways. 

One of the major motivating factors behind the competition is an acknowledgement that MacArthur doesn’t know everything—funders all too often convey the opposite. The competition presents a kind of humility and openness to the field that we should definitely see more of.

It’s also open to anyone, knocking down the brick wall of “no unsolicited proposals” that we often see at big foundations, ostensibly to avoid a barrage of applicants. Here, Mac is saying, "Bring it." Come one, come all. The way it’s handling the barrage is encouraging, too, making the panel of 30 evaluators public (by contrast, the MacArthur Fellowships are determined by confidential committee), and even explaining the statistical methodology for scoring. 

It’s exciting to think about what kinds of proposals could result from such an open-ended challenge. A lucky nonprofit or company could do some huge things with an extra $100 million—the competition allows for either to apply, just not governments or individuals. It’s like imagining you’ve won the lottery; think of all the amazing things you could do. 

At the same time, as is often the case with lottery winners, a huge infusion of cash doesn’t necessarily create the positive impact you’d expect. 

There’s the obvious example, based on numbers alone, of Mark Zuckerberg’s $100 million commitment ($200 million with matching gifts) to Newark schools. The program was looking to create transformational change for a school district in five years, and while not a total bust it didn't have the desired impact and was criticized by many as disconnected from the community it sought to serve.  

MacArthur has a step in the process in which the 10 semifinalists must demonstrate community engagement, and there’s nothing saying applicants will repeat others' mistakes, but there’s a real danger of something similar happening with this winner. There’s a chance, in other words, of $100 million burning up fast, hitting some deliverables, and leaving little change in its wake.

Some of the big pitfalls of the 100&Change program, as I see them, include backing too unilateral an approach, and placing too much of an emphasis on “solving” a problem instead of building something meaningful to leave behind. The competition could also go a lot further toward benefiting non-winners and building a forum for collaboration and for new ideas to flourish. 

In launching 100&Change, MacArthur is asking, “What would you do with $100 million?” Well, here are my ideas for improving its chances of making a real difference:

1. Reward collaborative efforts

There are certainly nonprofits and companies that could potentially put $100 million in dedicated project funds to good use. But I have a hard time imagining a successful proposal that can take on a meaningful social problem without taking a collaborative approach.  

For one, there aren’t a lot of nonprofits out there that are operating at a scale that can absorb that level of additional funding without serious organizational changes, as rolling out a new project that size takes infrastructure. For context, there are only around 20 charities in the United States that took in more than $500 million in 2015, so you can see how much $100 million for one project would skew the budgets of the vast majority of organizations. 

Furthermore, to avoid the pitfall of a “swoop-in” approach that the Newark project was criticized for, it will be crucial to back community-driven efforts. As co-founder of #BlackLivesMatter Alicia Garza wrote in response to 100&Change, “Often, the best approach is to invest in local infrastructure and community-led approaches to ensure that the solutions are being generated by the people who are affected by that problem.”

I tend to agree, and with a prize of this scale, that would almost certainly entail a coalition of small groups sharing funding. The 100&Change rules allow for joint proposals from multiple groups, and it would be great to see something along those lines win. The competition could go even further, encouraging collaboration in the semifinal stage, or connecting multiple applicants attempting to solve the same or similar problems and working with them toward a combined solution. Or perhaps it could reward one winner to serve as a point group for a more distributed funding mechanism serving a community or field. 

2. Provide organizational support

One thing I’m skeptical about when it comes to the program is the idea that a one-time infusion can truly “solve” any serious problem society faces. I would be happily proven wrong by a potential 100&Change winner, but lasting social change requires organization strength, power building, and some kind of lasting infrastructure to carry out the long-term implications. A competition like this should look to solve a problem, but also to build something that can continue in its wake.

There’s been a steady drumbeat calling for philanthropy to reduce restrictions on funding, and remove the stigma of funding operational, or (gasp!) overhead expenses. After all, powerful results require powerful organizations. As forward-looking as 100&Change is in certain ways, it’s still very much the old-school, project-only support. The rules state that use of funds for overhead expenses is not allowed in most cases, with a maximum of 15 percent, if any, going to such costs.

This is problematic for a couple of reasons. For one, it gets back to limiting who can participate, as a small organization would likely have to build its own capacity with additional funds to manage a $100 million project. One of the saving graces, here, is that the 10 semifinalists will receive some support to develop their proposals in terms of technical details and capacity, the idea being to help smaller groups. But granting $100 million in project funding while not funding organizational growth is asking a lot of many organizations.

The other concern here is what happens after the project is over. Yes, the goal is to solve, or significantly mitigate a problem—a finite proposal that $100 million can impact. But what worthy problem won’t require sturdy infrastructure to remain once the $100 million dries up? When the magic is over, what will remain? 

Giving $100 million in unrestricted funds is also a lot to ask. But then again, if you’re making a big bet, make a big bet! And even if most funding must go toward the project, at least account for some funding to build the organizations involved, empowering them to continue stronger than before, after the music stops. 

3. Easier Initial Application, More Winners, More In Kind Support

More groups should stand to benefit from this initiative in meaningful ways. Like we’ve said in the past regarding these huge philanthropic competition—preparing proposals can waste so much time of passionate and hard-working people. All but very few will walk away with a little to show for it, save maybe a little feedback.

Related: The Perils of All These Prizes

The required application calls for 4,000+ words (based on max word counts) across eight sections and more than a dozen subsections, even a video. The odds are extremely low that applicants will win, and buying a ticket to play requires hours of uncompensated work that nonprofits often can't spare.

One big twist being hailed in 100&Change is that the small group of finalists (fewer than the 10 semifinalists) will present their pitches live, Shark Tank-style, to the MacArthur board, but also to other grantmakers in hopes that they might jump on board with some of the ideas that don’t win.

Good idea, and no doubt those runners up will stand to benefit. But you could do a lot more to mitigate time commitments early on, and to benefit more organizations, monetarily or otherwise, along the way. 

MacArthur could adapt a few practices from the Knight Foundation’s recurring challenges. For example, you could offer an initial phase with lower-impact presentation of ideas, which can then be whittled down and expanded in terms of depth of proposals. You could also hold more of the competition in a public forum that would allow more teams to exchange plans, team up, or obtain mentoring from judges and peers throughout the course of the competition, even attract other funders.

Finally, while it steals some of the thunder from the “there can be only one” impact of the $100 million, you could easily imagine a second tier of much smaller prizes for incredible ideas that were a little too soft in the middle, or didn’t quite fit such a grand jackpot. Maybe winners in that tier could come back in three years to take another run at the next competition with what they’ve done.

That would allow groups of all sizes to participate and potentially have something to show for it. It would also create a vibrant platform for exchange of many ideas that could go on to do great things.

You could argue that these suggestions are not in the spirit of what this particular competition wants to do. After all, 100&Change clearly wants to fund Something Big that gets one thing done. And again, there’s a lot to this competition that is very exciting, and shows real risk-taking and openness on the part of MacArthur. 

This is quite an experiment, and time will tell if the execution is sharp enough to dodge the lottery-winner pitfalls, and if the finalists bring forth ideas that can truly solve problems with the right kind of massive, one-time financial leverage.

But with the right nuances, you can imagine a program that’s not just a one-shot infusion of cash, but a program that builds strong new foundations for change in ways philanthropy may have never considered before.