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A Billion Dollar Bet For Kids: Welcoming The Revolutionary Blue Meridian Partners

This article is more than 8 years old.

Even if you know some of the names—former Microsoft CEO and current owner of the Los Angeles Clippers Steve Ballmer, hedge fund manager and mega-philanthropist Stan Druckenmiller, blue-chip foundations like Edna McConnell Clark (EMCF), Hewlett and Packard—the scope and audacity of Blue Meridian Partners, a recently announced philanthropic collaboration, is breathtaking. Indeed, my Bridgespan colleague Kelly Campbell and I are advisers to this venture, but we’re still rubbing our eyes in disbelief about what these donors plan to do.

Blue Meridian will invest at least $1 billion in high-performing US nonprofits that can have truly national impact for economically disadvantaged children and youth. Blue Meridian plans to invest upwards of $100 million in select nonprofitsthis level of investment in social change organizations is exceedingly rare. In Bridgespan’s recent study that analyzed big bets to social change made during 2000-12, we found fewer than five social change bets per year of this size, even when including big bets by the Gates Foundation (which our study did not do because the magnitude of its giving distorts broader trends). And, taken as a whole, Blue Meridian’s $1 billion investment would rank second among all big bets during the same period (topped only by Joan Kroc’s $1.5 billion bequest to the Salvation Army). Among living donors, this level of social change investment is without comparison.

But its total size isn’t the only thing interesting about Blue Meridian. It could take three developing—and very promising—philanthropic trends to the next level:

  • Collaboration between big funders: As the announcement letter from EMCF CEO Nancy Roob explains, all six of the key partners will share decision-making authority on where and how to invest, and how to measure results. “Why, you may wonder, is EMCF sharing our decision-making authority?” Roob writes. “Because we cannot go it alone.” Capital aggregation was a strategy pioneered by EMCF, but this takes it to a whole new level. Collaboration is not always the right answer, but when like-minded donors come together like this, it raises the ceiling for impact.
  • Focus on evidence and growth potential: Blue Meridian grants will go to nonprofits working with disadvantaged children and youth that have already demonstrated their effectiveness and a potential to do much more if given the resources. The grants will be flexible, unrestricted, long-term (5-10 years) and tied to performance.
  • Investment in capacity building and organizations: Blue Meridian’s announcement letter is candid about why they’re departing from customary philanthropic practice. “We funders typically provide nonprofit leaders with less money than they need to achieve results—often hardly enough to meet payroll, much less to support learning, improvement, and growth.” This collaboration is noteworthy for its planned investment in entire organizations, not, as is often the case, in specific programs.

Big announcements are not always followed by big results. And an effort as ambitious as Blue Meridian is likely to face a lot of challenges along the way: finding nonprofits strong enough to take this scale of investment, honestly measuring results, dealing with the almost-inevitable failures and keeping a smart and opinionated group of big donors together for the long haul.

But I’ll let EMCF’s Nancy Roob have the last word on what’s at stake here. “Without large, long-term investments of growth capital for organizations with proven results, we’ll continue to salve but not solve our big social challenges.”

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