Unlike other forms of funding, philanthropy is in a position to take risky, long-term bets on solutions to society’s biggest challenges. Government funding generally needs to show taxpayers that money is going to proven solutions, and private investors tend to operate on short timelines and have to make financial returns. That’s why some call philanthropy “society’s risk capital’; it can put impact first and be patient about the results.
Google has a big appetite for risky bets, or, as we call them, “moonshots.” This approach has led to some of our biggest successes — from search to self-driving cars to translation. And, of course, some failures along the way. We’ve tried to take the same approach at Google.org, looking for places where we can direct risk capital toward big problems, often by helping organizations capture the potential of new technologies like artificial intelligence.
Through our Google.org Impact Challenges, for example, we invite social innovators of any size to give us their best ideas for transformative impact and we make sizable contributions of time and money to help them grow. Some of these bets have gone on to become the largest and fastest-growing nonprofit organizations in the world, like Give Directly, Khan Academy, and Equal Justice Initiative. And some have even failed. But through the success and failures, we’ve learned a lot:
There’s a place for risk and a place for sure bets: In our early days nearly everything we funded was in this category of risk capital, which made it tough to have steady, reliable impact or manage multi-year programs. We’ve shifted to a portfolio approach, carving out space for true risk capital and supporting immediate needs such as housing, food, and clean water.
Bet on the team and roll with the punches: Even good ideas fail, but a strong team will roll with the punches and continue iterating to find success. By establishing shared outcome goals in partnership with amazing people, we’ve been able to achieve great results — even when the initial idea foundered.
Invest in what you know: For us, that expertise often involves technology, which is why so many of our best examples have technology at their core.
Give adequate and flexible resources: Too often projects fail because they’re under-funded or funders too constrained in their use of money to make changes when a project takes an unexpected turn. Multi-year, general operating support is generally the right move with risky bets, and we aim to be generous in our support of both time and resources.
For a perspective from the other side, read on for how some of our Google Impact Challenge grantees were able to have outsized impact after we bet on them at ‘risky’ stages of their development.