“Big bets give organizations the chance to think about what it looks like to go from serving to solving.”
Sridhar Prasad, a partner of The Bridgespan Group, noted this long before he began researching “Big Bets” in philanthropy. Listen in to the show to learn how to better poise your nonprofit to become “big bettable.”
That is always the goal isn’t it? As much as smaller contributions and fundraising campaigns like the March of the Dimes back in the 1940s are appreciated and valued, the big gifts donations we receive from philanthropists can often determine the magnitude of our achievements.
Listen to the Episode Here!
Philanthropy Bets Big on Sustainable Development Goals (Sridhar’s Standford Social Innovation Review article)
(1:45) Sridhar defines what being “big bettable” means.
(3:35) Sridhar explains the significance of major gifts.
(5:15) How you can position yourself so that one day you may get in front of your dream donor. 1st way
(6:09) Why you should be looking into your existing pool of donors for your big bet gift.
(10:17) What to do to cement the relationship with the donor who has given you their first “bet” (major gift).
(14:04) The point where many nonprofits go wrong when making their case to donors.
(15:58) What organizations can do to evolve from serving to solving.
(22:33) More things to consider when pitching your nonprofit as big bettable to a philanthropist.
(24:20) Sridhar goes deeper into big bet data and what goes into a proposal.
Episode 146 Transcript
Dolph Goldenburg: 00:00 Welcome to the successful nonprofits podcast. I’m your host Dolph Goldenburg
Dolph Goldenburg: 00:06 Listeners. Today our guest Sridhar Prasad is one of the top experts on nonprofit strategy and philanthropic markets, and he has recently dived into the world of big bet grant awardees.
Don’t just take my word about his expertise. You can go to the Stanford social innovation review, which as we all know, is the gold standard for for the nonprofit sector and read his three articles now.
Just wait until you hear just a little bit about Schrader’s resume. He’s currently a partner in the Bridgespan Group’s Boston office, where he’s worked with a number of nonprofits, foundations and philanthropic collaboratives. These include the Women’s World Banking, The Inter-American Development Bank, the Gates Foundation, the Ford Foundation, Lever for Change, and the Audacious Project. Much of his work has focused on building successful platforms that harness and direct philanthropic capital to high impact organizations. Prior to Bridgespan, Sridhar worked for another group that you have probably heard of, and that’s the Boston Consulting Group.
Hey Sridhar, welcome to the podcast.
Sridhar Prasad: 01:25 Thanks Dolph, it’s a pleasure to be here.
Dolph Goldenburg: 01:28 I have to admit that before I read your Stanford Social Innovation Review article entitled “Becoming Big Bettable, the phrase “big bettable” was not one that I thought a lot about. So can you share with myself and also with our listeners what exactly is big bettable?
Sridhar Prasad: 01:47 Sure. Dolph and first thanks so much for having me on the podcast. Pleasure to be with you and with all of your listeners.
For us, we would define “big bettable” as organizations that have the capacity to both attract and deploy large philanthropic gifts . And we’ve defined that in prior research as gifts of over $10 million in size. For us the $10 million mark is not necessarily a hard and fast rule. , it could be $15 million, it could be $28 million. We picked a number then that felt big and robust enough. And, truthfully, our take is that big bets matter. That it’s a heck of a lot easier to address some of the large social change, the challenges that many of our friends are trying to address with larger gifts. And too often the reverse is true. We’re expecting the social sector to create powerful transformational change and the revenue models are made up of nickels and dimes. And so part of our work at Bridgespan over the past few years has been to both understand the landscape of big bets and understand what it would take to unlock more big bets and a lot more philanthropy. That’s what I look forward to getting into more over the next for 20 minutes.
Dolph Goldenburg: 03:03 That’s really awesome. And when you said too many organizations were trying to make their mission work with nickels and dimes, I immediately thought of the March of Dimes, which was founded to combat polio. The whole point was to get Americans to mail their dimes to the charity. Of course, a dime was worth a lot more in 1948 than it is today, but still that was their entire campaign: “Hey, march your dimes into our office because we’re going to take care of polio in the U.S.”
Sridhar Prasad: 03:33 To be clear, there are many, many organizations which have built extraordinary missions and an extraordinary enterprises on the back of small dollar fundraising and mass market fundraising. From our experience, though, it’s also more of the exception rather than the rule. And this is especially for the organization who rely on philanthropy and foundation funds as a core part of their revenue models. Yeah, I think the rule is much more, “The bigger the check size, the more that you can think about deploying towards impact.” And frankly from a, from a philanthropist’s perspective, it is hard to meet to meet your ambitions without a corresponding commitment.
Dolph Goldenburg: 04:37 Oh absolutely. And it’s interesting, I actually talk a good little bit about eradication of polio on this show in part because I’m a Rotarian, and Rotary went big and bettable in the eighties and nineties to eradicate polio. For the last 35 years, it’s been and international health organizations have taken notice. Even the Gates foundation signed on and committed major money in the B (billion) range, not the M (million) range to bet on this cause.
Sridhar Prasad: 05:08 Yeah, it’s one of the more extraordinary philanthropic achievements in the last few decades.
Dolph Goldenburg: 05:13 In your SSIR article, you have this great anonymous quote from someone’s declares, “If I could just get lunch with Bill or Melinda Gates, I know they would understand what we’re trying to do.” While I don’t work with a lot of $25 million organizations and haven’t yet worked with a $100 million organization, I do work with a lot of million, $2 million, $5 million and quarter million dollar organizations. And I often hear people say the equivalent in for their own city or region. In Seattle it might be people trying to get in front of Gates, and in Atlanta it’s people who say, “If I could just meet with Bernie Marcus from Home Depot.” So can you say a little bit about how organizations can position themselves in such a way that one day they might get in front of a Gates or a Marcus or a Blank?
Sridhar Prasad: 06:09 We know a couple of things for our research. The first is that the first gift that a philanthropist gives to any organization is rarely a big bet. It happens without question, but the research that we’ve gone through and the article talks about the elements of a big bettable prospectus. In some ways the audience for those prospectuses are most likely your existing donors, but a donor who may have the giving potential to give 10 X or 20 X what they’re giving right now to the organization. They just haven’t conceptualized the organization that way. Part of it is the way in which social change has to market itself in a donor marketplace, especially as it competes with large scale institutions, hospitals, colleges, universities, so on and so forth.
Sridhar Prasad: 07:11 And the work that we do is often more intangible. It is more difficult to wrestle down into a “product”. I think that’s a good thing because that means we’re taking on more complex challenges. But I also think that means it’s a lot harder for a donor to really understand both what you are trying to achieve, as well as what it would take to achieve that goal. Part of it is how can we lay out the story for an organization such that it can go from being the 10th most important cause or the 20th most important cause for philanthropists. So it gets to be in someone’s personal top three or top five; so that they then decided to make a much deeper commitment both in terms of dollars and time. And that combination is when philanthropy we think can be at its best.
Dolph Goldenburg: 08:12 It’s funny because I’ve certainly worked with organizations that have received some of those initial small bets from their local philanthropists, whether that’s Arthur Blank or Bernie Marcus or Bob and Renee Parsons. And I think you’re right, they kind of make those bets just to gauge where the organization is at. It allows them to be able to look under the hood and really get a sense of whether the nonprofit is using their funds well and whether they’re getting the impact that they want.
Sridhar Prasad: 09:01 That’s right. Our research would indicate that when an organization receives a $10+ million gift, it’s typically the fourth or fifth gift that’s coming from that donor and the big bet itself is often a commitment that is 5 to 10 times what the previous commitment was. If that person’s already in the door, they already have some level of trust, but now how do you lay out the story in such a way to create a step up?
Dolph Goldenburg: 10:17 So if you’re a small half million or million dollar charity and at that point probably don’t feel so small because you started as a $10,000 organization. But if you’re a $500k or a $1 million organization and the local philanthropists in your city makes what for them is a big bet. Maybe it’s a $50,000 gift or $100,000 gift. What are some of the things that that nonprofit needs to do to really help cement that relationship and ensure that they get the second, the third, the fourth gift that maybe is 5 X or 10 X?
Sridhar Prasad: 10:59 Yeah. So I actually think that the elements of a big of bettable are in many ways not conditional upon a $10 million gift. But are core questions that like any rigorous philanthropist is likely to ask. And so it’s useful to think to what degree can you answer those questions in an affirmative way or in a way that gives clarity to that donor on your strategic intent, your aspirations and what you want to achieve. So the article we list five elements. The first is thinking through what’s the compelling problem that you’re trying to address. And this we’re pretty good at. We’re pretty good at describing the magnitude of the challenges that we as organizations in the sector are trying to address.
Sridhar Prasad: 11:58 The second: What is the point of arrival that a particular gift is going to contribute to? And that is not a one year landing point. It’s also not a 20 year vision. It’s something in the 5 to 10 year timeframe. If you receive this gift and corresponding gifts, what will the world look like? What meaningful change will happen that’s paired with that problem that you just laid out. The third element we’d say is the credible path to achieving that point of arrival? Have you thought about what is necessary to get to that landing spot and all of the elements that are required to do so? The fourth would be why philanthropy, and I think nonprofits have a number of different funding options. Philanthropy is one powerful one, but there are imperfections. So there’s reasons to use philanthropy and there’s reasons not.
Sridhar Prasad: 12:48 And to be able to articulate the donor’s role in this journey is probably pretty helpful. And of course, why this team, why this leader in this team? Well, which again, I think nonprofits generally have exceptional leaders and teams. We are fortunate and blessed to be able to work with so many of them. And so that’s usually an area of strength as organizations think about themselves and think about describing their activities. But those questions or those themes, we lay it out as part of the successful big bet prospectus. But I think they are universally applicable and the sharper organizations can be around some of those kinds of questions. The more they may answer donor needs or rather might be positioned in such a way that a donor can see giving to their local nonprofits. This same way they give to the local university or hospital, which too often the balance is tilted toward those institutions.
Dolph Goldenburg: 13:45 Right, right. So among those five, is there one that you think local nonprofits have the most difficult time describing, laying out and making the case for?
Sridhar Prasad: 13:58 Yeah, I’d say it’s in some ways a combination of the first three, but I’d probably point to the arrival and the credible path if you take those as a combination. And that’s important because the incentive structure in the sector is not pull up and think about where are we going and how are we actually meaningfully change; attacking the problem in a meaningful way, especially if you’re in human services or something where the need is so great and you are spending every moment in service in a meaningful way. There’s a little bit of a chicken and the egg challenge here, which is what big bets in some ways allow organizations do. It’s to give a little bit of that cushion and breathing room to then be able to say, well, what could we do?
Sridhar Prasad: 14:51 How could we go from serving to solving? Yet somebody is probably required to be able to get that gift that allows you to pull up in the first place. And so that, I think, is the challenge. But I think absent the articulation of how a particular donor gift changes both the trajectory of our organization and the trajectory of a problem, it’s tough to see. It’s just our experience.
Dolph Goldenburg: 15:31 I love that phrase from serving to solving; from saying, “Okay, we’re doing a great job of service, but what are we gonna do differently and how are we going to operate to actually solve the issue? What do organizations do to successfully make that transition?
Sridhar Prasad: 15:51 I think often a number of things. You’re asking a strategy consultant all about strategic planning – It’s helpful to have a strategic plan. It’s helpful to think through some of those kinds of questions. We are in the service business, we support and help empower and accelerate our clients and we’re thrilled to be able to do that kind of work. I do think there’s a healthy burgeoning industry of people who help nonprofits get some of the time and space to be able to think about those kinds of questions. The one thing I’d say is the phrase in some ways from serving to solving sometimes sounds like you’re denigrating the service component of our social sector, which is in the serving business because we have to meet basic human needs and I wouldn’t want that to be the interpretation from our discussion, Service is a vital part of our civil society is a vital part of what is needed, and Callahan said there’s a ton of work in service that people just need to fund.
Sridhar Prasad: 17:00 We’d agree with that 100% I think it’s that our language is probably becoming more nuanced. We also need to be responsive. So both of those things are important. I think that what you do get is organizations which are in serving business, which then say what are the lessons that we’re learning from the service? They then indicate what kind of structural systemic changes are needed and how do you shift from that? We’ve been fortunate to get to know an organization called the Bail Project, which has a fascinating model of using philanthropic funds to pay for cash bail. And so that was a basic service function helping a bunch of people who are in pretrial detention. You’re using dollars to bail them out.
Sridhar Prasad: 17:53 And the outcomes are radically better. Someone is not waiting for trial in jail. What kind of data are we learning from all of the people that were bailing out? How do we use that data to empower the field to move from just bailing people out to creating a system where bail is far more equitable. How do we create a justice system that is far more equitable? Well how do you change the conversation in some way? To me that’s the epitome of rooting your work in the day to day reality that you do. And then we’ll synthesize from that into how do we change basic systems given that work.
Dolph Goldenburg: 18:39 And so Sridhar I have to share with you in some way I feel a little bit validated and everything you just said. As a consultant, I lot of strategic planning and, and I typically vet prospective clients pretty carefully. I’m clear about the types of projects I want to work on and those that I don’t. And one of the things that I often say is, “I don’t facilitate what I refer to as 5% strategic plans. And those are the plans where an organization hopes to grow by 5% a year. If you’re a soup kitchen that wants to serve 15% more people at the end of three years, you can figure out how to do that without me or anybody else.
Dolph Goldenburg: 19:18 You just have to sit down as an organization and figure it out. So if you’re a food pantry, wouldn’t it be just incredible if you had a 10 or 20 year goal of eliminating hunger or food deserts in the neighborhood that your food pantry serves. To me this is such a better goal than just “We want to serve 12% more people in the next three years.” I started life as a case manager, and I get that serving is really important. But if all we’re doing is serving, at some level we’re not solving the problem and we’re kind of saying, “We’re happy just being in a service role and not being concerned about how to actually fix this issue.” It’s kind of like being a firefighter that never actually wants to put the fire out.
Sridhar Prasad: 20:23 Yeah. And it’s an interesting pair. If you think what’s the role of philanthropy within your given organization. One of the criticism of philanthropy that I think is warranted is donor gifts are time limited. While some donor gifts are recurring, whenever your listeners are going through donor renewals or grant renewals, those are not slam dunks. I think part of that’s because philanthropists often look at their giving as something that can create a step change evolution within your organization. So the questions you’re asking in some ways is what philanthropy can sometimes be good at: providing that infusion to potentially, as you mentioned, chang3 the question.
Dolph Goldenburg: 21:34 I could not agree more. And in my experience in working with some of high value philanthropists, they also are really good at maybe thinking about the importance of changing the question as well. Frankly and it is kind of amazing what a 45 minute meeting with someone who has over the course of their built a business that’s generated $1 billion can do. It’s an amazing 45 minutes of free consulting with that philanthropist.
Dolph Goldenburg: 22:07 So as we’re thinking about big bettable, are there other things that nonprofits should be thinking about as they’re considering how to make themselves big bettable? And how to approach philanthropists with the ability to really make those cause changing gifts?
Sridhar Prasad: 22:24 It’s an interesting question because in some ways I think about the questions that are within the big bettable article. What’s your point of arrival? What’s your critical path? What’s the credible pathway to get there? Those are some pretty big questions, right? And that’s a hard kind of meaty questions. And so I’m loath to add more to the lists or add more on the plate versus actually getting really clear about these questions and their strategic intentionality. But I, I do think that there’s probably a number of things folks can do. Who amongst my current donor base can I harvest and how do I approach them with a proposal or a prospectus that is more refined and more tailored to what they may be expecting / what they may get from other kinds of nonprofits that, that are soliciting their support. I’m not sure I want to overcomplicate it more than that. In some ways or I’m not sure I’d want to add more than that to that basic action plan. I think if that doesn’t work then there’s a broader conversation. But that to me it feels like the first step to being able to get on that trajectory in some ways.
Dolph Goldenburg: 23:44 And so what does that proposal look like? , since you just said, this is a pitch or proposal that is not your typical proposal. It’s not what this philanthropist is getting from every other organization that is working on that cause nationally or locally
Sridhar Prasad: 24:00 In many ways. The background for some of the research is important. And I want to just name a bit of data because that data is the burning platform that we think about at Bridge Span. Then I’ll come back to the proposal piece. So the reason we care about this deeply is two data points. One is the paucity of big best that exists right now. So we did a piece of research a few years ago where we looked through every public statement made by the giving pledgers. And we looked at other press articles and we knew noticed that the vast majority of donors list social change objectives, things like polio, malaria after school education, climate change, protecting democracy, criminal justice, etc. Their top one, two, three priorities.
And then we looked at every gift that was made over $10 million dollars over a 10 year period, and 80% of those gifts went to institutions that are not not social change causes. Now we tried to be as generous as we could with that that data set, but an 80/20 20/80 aspiration gap effectively emerged for us.
The second data point that gives us a burning platform is that we are probably on the verge of one of the single greatest generational wealth transfers in American history. And potentially in world history. This is especially true given the compounding of wealth and all of the dynamics that are in the news quite frequently about the composition of our society.
Sridhar Prasad: 25:55 Absent organizations being able to credibly articulate what they can do to address some of these meaningful social problems, the incentive is for all of that capital to basically go to where it’s been going today. So either it doesn’t get gifted at all, or, if it gets gifted, it goes to large institutions that do remarkable things with that capital. But where it’s hard to quantify the incremental social value for organizations that already have endowments that are $1 billion, $5 billion, $10 billion, $50billion and so on. So that’s the context. In some ways, that’s the burning platform for Bridgespan and why we care about this as an issue, particularly considering our own mission and our deep desire to accelerate and enable social change makers. The question becomes, what makes you distinctive?
Sridhar Prasad: 26:43 Part of the challenge for charities is that there are millions of nonprofits in America. So from the donor perspective, what becomes hard for you as a donor is understanding where the heck do you pick? How do I know who’s good? How do I know where to give my money? So I effectively ended up giving to nonprofits that are supported by my friends or who throw fancy galas or things like that, right? There’s a disconnect between the importance of the problem, the credible path to the solution. So our focus on these elements as part of a big bettable perspective meaningfully addresses those questions and elevates those questions is in some ways. How do you create the dynamic such that someone who does deeply care about an issue can look at your program and say, “I get it. I get how it’s going to make a meaningful impact against this important problem I care about. I get how you’re going to do it. I get why you need me and what you need my dollars for, and I believe in the team. Okay, now let’s get to work.” That in some ways is why those elements that we’ve distilled in the article just keep popping up for us because it’s a pathway to be able to frankly rationalize this market and close that aspiration gap.
Dolph Goldenburg: 27:57 I love that and I also think that’s really helpful. When many of us in the nonprofit sector read the Chronicle of philanthropy and see the front page announcement that Harvard got another billion dollars, we’re like, “Really? Harvard, what do you need with another $1 billion!” that’s incredibly helpful. Thank you. I want to make sure that we leave a little bit of time for our “off the map” question. In reading your bio Sridhar, I noticed that you have moved around the country throughout your career, so you’ve lived in lots of cities. But I’m also aware that you’ve always considered Boston your home. Could you tell us what it is about Boston that’s kept you coming back and why you call it home?
Sridhar Prasad: 28:36 So I actually moved to Boston from the New York/New Jersey area. My parents are still in New Jersey, and, in many ways, my emotional home will always be New York City. So it’s funny landing in Boston, given that my Derek Jeter jersey is in my closet. It doesn’t get used much, but it is still in my closet. My feelings about the city are probably different when I came here the first time I’m for school versus now. But it’s this welcoming, vibrant, walkable city that I now love and it is now me in a very real sense. My wife and I were fortunate to have our first child a few months ago and we live in an area where if you walk for 15 minutes, you’re in the middle of Cambridge and intellectually, culinary, culturally, it’s as vibrant as anywhere else I can think of. And we’ve still got a bunch of parks and lots of green space and things that we can also enjoy. So we’re incredibly blessed to be where we are and probably fortunate. And so I love it for that balance, which I think I appreciate more now than, than in years past.
Dolph Goldenburg: 29:56 That’s so awesome. And I lived in the opposite direction of New York city. And so for about seven or eight years, I called Philadelphia home, and I loved it for a lot of the same reasons. It was walkable, it was vibrant. There was a lot of culture, and I could get to the City when I needed to get to the city. But I could have a really great life. And so I get that. I totally get that
Sridhar Prasad: 30:18 And I my own emotional, but baseball loyalties would lead me to say I’m a proud Bostonian and let’s go Yankees.
Dolph Goldenburg: 30:28 That. That’s awesome. I will share with you that if you live in Philly, you have no choice but to root for the home teams because you will be pelted with beer bottles and other things if you do not, if you do not root for the home team. I just, I do have to say that like I was living there the year the Phillies won the world series, and I really remember thinking “If my little row home does not burn down tonight, it is going to stand for another 125 years.” So I hear you! Sridhar I am just so grateful and thankful that you’ve joined us today. I want to make sure that people know how to get in touch with you and know how to find out more about some of the work that you’re doing.
Dolph Goldenburg: 31:11 So you’ve written many articles that cover today’s topics and so I know that folks can go to ssir.org, which is the Stanford Social Innovation Review. We will link to the Becoming Big Bettable article in our show notes because it’s kind of a long URL. We also want to make sure listeners that you check out bridgespan.org so that you can see their vast collection of useful resources to help your nonprofit think through strategy and how to best position yourself for those meaningful big bettable philanthropic gifts. Now in particular, I also want to highlight on behalf of Bridgespan that they’ve got this amazing big bettable tool that is free to download. This tool will take you through step by step on how your organization can prepare to make good use of your big bet, so make sure you check that out as well. And that’s actually at bridgespan.org. Once again, it’s kind of a long URL. When I say kind of long, I’m looking at it now, and it’s about three lines long. So we will link to that in our show notes as well. Hey Sridhar, thank you so much for coming on today.
Sridhar Prasad: 32:24 Thanks Dolph Really appreciate it.
Dolph Goldenburg: 32:26 If you’re thinking through your big bet, then keep thinking. There’s no need to try to scribble down long URLs. You can get all of the links mentioned in today’s episode at successfulnonprofits.com. Now, as you probably know, like Sridhar, I place a high value on nonprofit strategy. It is the determining factor in your organization’s success and therefore the impact that you can make depends on how well you’re doing strategy. It’s just one of the reasons why I feel like our conversation today was just so critical. Now while we’re talking about big bets, there is one more bet I would like for you to take dear listener and here’s the bet I want you to take. Subscribe to our weekly email list. It is a bet with a guaranteed pay off as you’ll get a link to our weekly blog, nonprofit meme every week, and other useful resources as well. We don’t sell the list and we never ever email you more than once a week. So if you join, you’re not going to get a daily email or three times a day. That, dear listeners is our show for the week. I hope you have gained some insight to help your nonprofit thrive in a competitive environment.
Disclaimer: 33:51 I am not an accountant or attorney and neither I nor the Goldenburg Group provide tax, legal, or accounting advice. This material has been provided for informational purposes only, is not intended to provide and should not be relied on for tax, legal, or accounting advice. Always consult a qualified licensed professional about such matters.