“THE DIVIDE” BY MARK POLEGE/WWW.PHOTOGRAPHYOFMARKPOLEGE.COM

This article is from the Nonprofit Quarterly’s fall 2017 edition, “The Changing Skyline of U.S. Giving.”

The MacArthur Foundation’s 100&Change competition began as an experiment in openness, in response to criticisms that the philanthropic sector is too insular, not sufficiently focused on impact, and too risk averse. Instead of an introspective process, by which we would decide on an issue or problem as the focus and then design the strategy, we decided to issue a public, open call: “Tell us what problems $100 million can solve, and how.”

We proposed a $100 million grant—large by any standards—to be awarded by a competitive process and to be used over a compressed period, because we believe that there are some categories of problems that can be solved if they receive this kind of focused attention and resources at scale with need. Conversely, there are some problems where that may be less likely to work. (Different problems require different approaches.) We see the value in a diversified portfolio of grantmaking—responsive, strategic, and even “speculative” (the MacArthur Fellows Program invests specifically in individual potential). We also see the value in a diversified portfolio of risk. A single grant of $100 million is admittedly a very risky proposition—but, as our president Julia Stasch has said, “philanthropy is best positioned to provide society’s ‘risk capital’.”1

But we wanted to take a risk that was carefully informed and respectful of the large investment. MacArthur spent two years designing 100&Change. We researched and investigated different competition models. We grappled with tough choices around the structure and are still learning what worked well and what could stand to be improved. Those challenges included

  • how to balance risk and evidence;
  • how to evaluate diverse proposals;
  • how to create a value proposition for all participants;
  • how best to ensure engagement with communities of interest—those that stand to benefit and lose; and
  • how to curate content for other funders interested in supporting proposals.

As we narrow our semifinalists to up to five finalists this fall and name a winner in the following months, we want to share the many lessons we have learned through our approach to giving away $100 million, and we want to share the data we have gathered—a rich repository of creative, thoughtful, and impactful ideas. (Editors’ Note: Four finalists have since been chosen; you can read about them here.)

Balancing Risks and Evidence

Our intentions were clear from the start: we wanted to solve a problem. And more than that: we wanted to inspire the broader public to believe change can happen and solutions to major challenges are possible, despite the current political and social climate.2

We started by investigating different models. We looked at a point solution prize, where a specific goal or target is defined and a monetary prize is offered to those who best achieve it. We considered challenges, where a problem is defined and support is offered to those who are looking for the solution. Both approaches would have required that we define a specific problem that we wanted to solve, hindering our effort not to impose our own views as to what problems are most compelling, and both presume that the solution to the problem is unknown. We believe that there are problems where solutions are known but there is just not enough money available to effect the solution.

In philanthropy, there is a tendency to want to be the first to fund an idea, project, or breakthrough innovation. MacArthur was not seeking to occupy that space. We perceived a gap in the philanthropic field: a need for funding to take tested ideas to scale. We saw 100&Change as a way to help address that gap.

By the time the application period closed for 100&Change, in October 2016, we had received 1,904 applications. MacArthur staff reviewed each submission to ensure it complied with the application requirements.3 Although we believed at the time that we had communicated our eligibility criteria clearly, we discovered that some criteria needed clearer description.

For example, even though we had described 100&Change as a competition for a $100 million grant, we received 463 proposals for projects with budgets well below $100 million. During the next round of 100&Change we will state, unequivocally, that we are looking for $100 million projects.

We opened the competition to for-profit organizations but should have provided more guidance regarding the concept of charitable purpose and the limitations on the use of grant funds to generate profit or other private benefits. Many of the for-profit entries were disqualified in administrative review for not meeting these requirements.

A Panel of Wise Heads

Our insistence on openness also constrained our choices about how to evaluate proposals. If we had limited ourselves to a specific domain of work, we could have employed a panel of specialists—a group of experts in that domain. However, it was impractical to convene multiple panels of experts across different fields in anticipation of what might be submitted to the competition. And, as our semifinalists illustrate, we received a diverse pool of submissions.