High impact philanthropic support takes many forms. It can fund nonprofit programs that provide services directly to those in need; increase the capacity of systems so that multiple programs and organizations are collectively more effective and efficient; support policy & advocacy initiatives that change the environment in which nonprofits work; and fund research & innovation with the potential for game-changing progress.
Across the many social impact areas our team has analyzed, philanthropic support typically falls into one or more of these four categories. Like financial investment asset classes, these categories often reflect different levels of risk, timeframes for results, and social impact returns.
If you’ve funded only one play, consider expanding to other plays to diversify risks and rewards, or collaborate with others supporting plays that complement your chosen approach. Many organizations work in more than one play. For example, the nonprofit Friendship Bench, a community mental health organization in Zimbabwe, and AÇEV, a parenting and early education nonprofit in Turkey, both train other organizations to implement their models (system capacity building) in addition to serving individuals themselves (direct service).
What are the four philanthropic plays?
Direct services provide products or services directly to individuals. Examples include food pantries, homeless shelters, and tutoring programs.
System capacity building strengthens the ability of multiple organizations and individuals to better address a need. For example, training pediatricians to screen for mental health issues during routine wellness visits helps strengthen our system for addressing mental health.
Policy and/or advocacy raise awareness and increase knowledge to influence public opinion, public policy and/or legislation. Examples include advocating for clean energy policies and reforming the criminal justice system.
Game-changing innovation advances new knowledge and develops new solutions. Examples include development of vaccines and renewable energy technology.
What are the risks, rewards, and tradeoffs?
Philanthropic Play
Timeframe for Results
Risk/Reward Profile
Tradeoffs
Direct Services
0-5 years
Lower risk since generally less complex; often addresses an immediate need.
Outcomes can be easier to measure due to addressing an immediate need, but direct service programs don’t change the underlying conditions that produce the need.
System Capacity Building
1-5+ years
Higher investment risk and increased uncertainty due to greater complexity, like multiple stakeholders with potentially competing interests. Has potential for greater scale of impact than direct services.
Progress can be harder to measure and difficult to attribute to any one funder’s work.
Policy/Advocacy
1-10+ years
Higher investment risk and increased uncertainty, including reputational and political risk. Has potential for greater scale and sustainability.
Leveraging resources of other sectors (e.g., government and business) can lead to more sustainable change, but outcomes are subject to changing political and cultural shifts.
Game-Changing Innovation
5-10+ years
Highest investment risk and uncertainty. Money and time may be spent learning only what doesn’t work. Can be transformative, in some cases eliminating need.
Breakthroughs are rare but can be game changing.