Thesis-driven philanthropic funds

No matter who you are, most of the smartest people work for someone else.
— Bill Joy

The Challenge

The Challenge

Ambitious philanthropy has a high barrier to entry

The landscape of global wealth continues to expand rapidly. According to the World Ultra Wealth Report 2024, the global ultra-high-net-worth (UHNW) population increased by 7.6% in 2023 to 426,330 individuals. Within that, the number of UHNWIs in the United States grew by 13.1%. In fact, there are now more than 100,000 individuals and families globally with at least $50 million in wealth, and 2,000 families in the U.S. alone that have more than half-a-billion in wealth. These individuals collectively hold over $49 trillion in wealth—more than the combined GDP of the US and Chinese economies.

While high-net-worth individuals express commitment to philanthropy, their actual giving levels remain well below their potential and stated desires. According to Bridgespan, ultra-wealthy American families donated just 1.2% of their assets to charity in 2023. Most of these people face real barriers. Research from Barclays Private Bank indicates that at least 20% of them indicate not having enough knowledge or experience with charitable organizations. This is significant, because these same people are also reluctant to build out large teams or develop new infrastructure to inform their giving. Unfortunately, this means that they miss out on ambitious opportunities, both for their organizations and society, because they do not have the capacity to conduct due diligence and maintain oversight of emerging areas. The result is that many high-potential projects go unfunded, particularly in areas requiring deep technical expertise or complex coordination across multiple stakeholders.

Philanthropists need a better path to participate in ambitious giving.

The Play

The Play

Philanthropic funds enable donors to create more impact in areas they care about without hiring large in-house teams

Philanthropic funds represent a powerful alternative to traditional models of either giving to a small number of Principal Investigators (PIs) and nonprofits or giving large gifts to well-established institutions. The philanthropic fund model consists of three core pillars:

  1. Compelling Thesis: a clear articulation of one or multiple ambitious goals the Fund aims to accomplish in a specific time frame (three years, five years, etc), the capital required, how the capital will be spent to reach the goal, and how impact will be measured and sustained;

  2. Field Leader: the individual who can credibly drive this thesis to execution based on their expertise and passion, ability to spot and develop compelling ideas, and connectivity to both donors and performers in the space;

  3. Anchor Donor: the donor that capitalizes the fund either fully or partially (minimum is 20-30% of the overall goal capital raise).

Compelling Thesis
Philanthropic Funds begin with a specific thesis about what needs to happen to move a field forward, and a theory of change about how a time-bound effort can make those things happen, or at least set into motion a chain of events which leads to those things happening. The attributes of an effective philanthropic fund thesis include:

  • A theory of change, explaining how the activities of the fund will translate into outputs and outcomes in the target area. This is often framed as, “If the fund does X, Y is likely to occur.” This theory of change often exists in tandem with other underlying premises or observations about the state of the world, predictions for what is likely to happen in the coming years, and models for the problem type itself (e.g. market failure).

  • The “why now” story, capitalizing on the changes in the world that put this goal within reach. This can include fundamental discoveries, a novel combination of technological building blocks, new business or financial models, a window for policy change, and shifts in cultural beliefs and attitudes.

  • The “why you” and “why not others” story. Why aren’t others already adopting this approach? Why are you the best positioned to take it forward?

  • Counterfactual analysis of what would happen in a business-as-usual scenario if the fund did not exist. Related to the above, why not just leave it all to play out as it otherwise would?

  • Time-bound target goals and a capital allocation plan within that theory of change. An effective thesis should say what the fund is trying to accomplish, over what time scale, by doing what, and at what estimated cost.

  • Tools and levers for impact. Funds have a vast toolbox available to them, from policy entrepreneurship to market shaping to the common task method. A strong thesis identifies the specific tools a fund will utilize.

  • Metrics for evaluating progress over the short, medium and long-term. Fund leaders and funders should keep in mind that (a) some metrics will be qualitative and rely on expert judgment, and (b) rigid adherence to a plan is likely to be counter-productive.

  • Example grants. What types of projects or organizations would you fund? How will you surface and/or create these projects and organizations?

  • Value-added services beyond capital allocation. This could include playing an active role in team formation (i.e., not just funding existing teams, but helping to create new ones), as well as helping teams with challenges like recruiting, fundraising, and policy.

  • Landscape analysis. Who else is doing what? Do you plan to work alone, in parallel, or in partnership with them?

  • Partners. Who are the key partners in your strategy? Are they already committed to the project, or will they need to be brought on board at a later stage?

  • Risk and mitigation analysis. Funds are meant to be dynamic, and outcomes or conditions may not be as expected. What could go wrong? How will you mitigate those risks?

  • A theory of scale, roadmapping how to scale the solution beyond the initial fund.

Field Leader
Philanthropic Funds are led by directors with unique knowledge of and networks in their fields that give them access to opportunities that would not otherwise be available. Attributes of effective fund directors include:

  • Deep domain expertise: They have a sophisticated understanding of both the technical frontiers and systemic leverage points within their field.

  • Deep field expertise: They understand the history of their field and have a high awareness of “who is doing what” at any given moment.

  • Focus on field-level bottlenecks: They are motivated to find and address the biggest field-level bottlenecks, rather than a bottleneck in their specific sub-field.

  • Willingness to flout the norms of their field: They have a history of charting their own path, whereby they have repeatedly brought about outcomes even when there was not a ready-built path for them to do so.

  • Deep integrity: They maintain unwavering ethical standards in their decision-making and relationships, consistently acting in service of the fund's mission rather than personal gain. They are transparent about both successes and failures, creating trust with donors, grantees, and other stakeholders.

  • Willing and able to delegate and empower others: They are interested in outcomes rather than ownership. They are willing and able to organize and empower others to achieve an outcome.

  • Willing and able to act as a force multiplier: They have unique attributes – for example, a deep knowledge of how policy change happens – which enable them to act as a force multiplier for the people and organizations they fund.

  • Effective communicator: They can communicate their thesis at different levels of abstraction (forest, trees, leaves, chlorophyl).

Anchor Donor
Philanthropic Funds exist because an anchor donor invests in the thesis and fund director. Attributes of anchor donors often include:

  • An “LP” mindset: They carefully vet the thesis and fund director, but once they commit the capital, they see themselves as “coaches” and mentors to the Fund Director, where they provide advice, connectivity to opportunities, and other help, similar to how Limited Partners (LPs) operate in a for-profit investment context. They see the Fund Director as the lead who is driving the investment decision and execution, and focus on evaluating their success at the portfolio level.

  • Willing to leverage their anchor gift to raise additional funds. Anchor gifts are a lynchpin for additional fundraising efforts. Anchor donors see that value and use their gift to help the Fund Director raise additional funds from others.

Advantages of the model

For philanthropists, the philanthropic fund model offers several powerful advantages when compared to either giving without a team or starting a foundation with a large and growing full-time team.

Deep Expertise Without Large Teams

The core value proposition of the fund model is that it enables donors to leverage experts without hiring them. Fund directors offer both deep domain knowledge and extensive relationships in their fields. They can identify opportunities, conduct sophisticated due diligence, and create new initiatives by connecting individuals and teams with complementary skills. Beyond just providing capital, fund directors can act as force multipliers for grantees, offering strategic guidance, introductions to key stakeholders, and field-specific expertise that helps projects succeed. Lastly, in a model where many donors support a smaller number of funds that have a single channel of communication in the fund director, nonprofits can spend more of their time focused on the work itself and less on managing disparate philanthropic relationships.

Access to Elite Talent

The fund model creates unique opportunities to engage field-leading experts who might not otherwise focus on philanthropy. Many of the most talented fund director candidates are deeply engaged in research, policy work, or industry leadership and are not interested in traditional foundation roles. The flexible, independent nature of philanthropic funds allows these experts to direct philanthropic capital while maintaining their other work, which can often be complementary to fund leadership. This structure makes the role attractive to experts who would never consider full-time foundation work. Additionally, because multiple funders can benefit from a single expert's guidance rather than competing to hire them exclusively, the model creates natural efficiencies in leveraging scarce talent.

Flexibility

The fund model enables philanthropists to move quickly into new areas without building internal capacity. Consider AI: philanthropists and foundations seeking to develop AI strategies can either spend years hiring staff and developing an organizational strategy, or they can partner with an existing fund director who brings deep expertise and a ready-to-execute thesis. This ability to act quickly is becoming increasingly crucial as the pace of technological and social change accelerates.

Scalability Beyond Traditional Giving

Philanthropists often have a small number of favorite nonprofits and PIs who they maintain relationships with and support. This model typically hits diminishing returns at relatively modest levels ($10-100M/year), since (a) there are only so many relationships individual philanthropists can maintain, and (b) there's only so much funding a small set of PIs and nonprofits can effectively absorb. By contrast, with a portfolio of fund directors, who themselves each maintain relationships with dozens of grantees, philanthropists can deploy more money without a drop-off in effectiveness. For philanthropists committed to giving away significant wealth in their lifetimes, this scalability is essential.

Funds allow donors to invest larger amounts of capital (much higher than individual projects) while preserving clarity of goals and quality of projects. Furthermore, they can keep smaller teams that focus on selecting fund leaders and theses worth betting on—much as LPs do with investment funds.

When the model does not make sense

A fund model is not the best fit in all cases, specifically when:

There is a clear solution that one already existing team or organization can realize. If there's a clear fix to the problem that one team or organization can make, then it makes sense to directly fund or create that organization. The fund model is powerful when making progress requires different actors taking distinct but mutually reinforcing actions.

There isn't a critical mass of donor interest. To get started, funds need at least one sufficiently sizable anchor donation. Such a donation should enable fund directors to achieve their desired impact, even if they don’t secure any additional capital. This isn't always possible. Sometimes pursuing a theory of change requires $X and the realistically fundable amount is <$X. In this case, a fund doesn't make sense, or at least requires downsizing in goals and scope.

The fund director can't communicate and fundraise. Unless one donor is committed to financing the entire fund, fund directors must have the ability and motivation to communicate and fundraise for their thesis. These are learnable skills, but some people are just not inclined. With such people at the helm, funds will fail to raise sufficient capital.

The goal is to do everything. The fund model works best when there is a focused thesis. There will likely be a diversity of performers and approaches, but there must be a clear, specific, and circumscribed objective. For example, the Talent Mobility Fund focuses specifically on increasing the use of underused visa pathways like the O-1 visa rather than trying to solve all immigration challenges. Funds that try to solve every problem in their field typically solve none of them well.

Difference from other forms of collaborative philanthropy

There is a high level of overlap between what we call thesis-driven funds and what organizations like the Gates Foundation and Bridgespan call collaborative funds. However, thesis-driven funds often differ in decision-making, focus, and approach.

Decision-making. Many collaborative philanthropic efforts have a pooled decision-making structure, where each donor is able to vote on grantmaking decisions. Conversely, in the thesis-driven fund model, all decisions are made by the fund leader. Donors act as the philanthropic equivalent to limited partners (LPs). They may contribute their network and expertise — for example, helping the fund raise additional resources to accomplish its goal — but they ultimately defer to the fund leader on strategy and decision-making. We think this is particularly important when the desired outcomes are best realized through a coherent portfolio of mutually reinforcing projects, rather than a set of related but disjoint projects chosen by different funders participating in a donor collaborative.

Focus. Many collaborative philanthropic efforts have a broad goal (e.g. increasing funding for research for a specific disease) which is advanced over an undetermined period of time. Conversely, in the thesis-driven fund model, there is always a tactical goal (e.g. build X high-impact datasets) that is accomplished over a set period of time (e.g. 1, 3, 5 years).

Approach. Many collaborative philanthropic efforts are project-based, supporting a specific nonprofit to take on a larger-than-usual effort. Conversely, thesis-driven funds, as the name suggests, focus mainly on funding other organizations to do the work. The fund leader acts as the philanthropic equivalent to general partners (GPs).

Case Studies

Case Studies

The Talent Mobility Fund

When Amy Nice left the Biden White House in 2022, she held a powerful insight: many STEM immigration visa pathways are significantly underutilized. Drawing on her 35+ years of experience as an immigration lawyer and senior policymaker, Amy developed a thesis focused on identifying and eliminating bottlenecks to increased use of existing visa pathways.

Her approach was distinct from both conventional immigration advocacy organizations, which often focus on legislative reform, and from direct service organizations, which typically help individuals navigate the current system. Instead, she saw an opportunity to systematically increase immigration by working with multiple actors – employers, law firms, government agencies, and nonprofits – to better utilize existing pathways like the O-1 visa for scientists, which is uncapped and has a >90% acceptance rate, but receives <5,000 approvals/year.

Building Donor Support

Amy’s clear thesis and unique expertise attracted early support from Open Philanthropy and Eric Schmidt. The fund's focus on working within existing law rather than pursuing legislative change resonated with donors who wanted to achieve near-term impact on STEM immigration. Additional supporters, including the Livelihood Impact Fund and Sijbrandij Foundation, were drawn to the fund's concrete theory of change and Amy's deep expertise in the space.

Key Lessons

The Talent Mobility Fund demonstrates several success factors for the fund model:

  • A focused thesis targeting a specific, achievable goal

  • A fund director with deep domain expertise and strong relationships in the field

  • Multiple complementary interventions rather than a single solution

  • A strong base of interested donors acting as the equivalent to LPs

Impetus Grants

After completing his PhD in aging biology, Martin Jensen received a prestigious NIH award to launch an academic career. Instead, he decided to return the grant to start Gordian Biotechnology, a company focused on targets and therapies for complex age-related diseases. As a founder, he saw a number of gaps in aging R&D which he decided to address by designing a grants program to advance the entire field of aging biology (also known as geroscience). Growing research suggested that underlying biological mechanisms of aging could be targeted to delay the onset of multiple chronic diseases, potentially allowing people to live longer, healthier lives.

Jensen's inspiration came partly from COVID-19 Fast Grants, which demonstrated that rapid funding decisions could produce results similar to traditional year-long NIH grant cycles, just without the bureaucratic overhead. His experience in academia had shown him that many potentially transformative ideas struggled to get funding simply because they fell outside conventional thinking. Some of the field's most influential advances such as DNA methylation clocks, rejuvenating factors in young blood, epigenetic reprogramming had initially been considered "unfundable." His thesis was simple: if you funded ideas based on their potential to reshape thinking in the field, accepting that many would fail, the overall rate of progress might increase dramatically.

Building Donor Support

Jensen's approach attracted $26 million from technology entrepreneurs including Vitalik Buterin, Juan Benet, and others who understood both the importance of aging biology and the value of funding non-consensus ideas. Rather than trying to eliminate risk, the fund explicitly sought out ideas with the potential to reshape thinking in the field.

Operational Approach

Jensen structured the fund to work differently from traditional grant-makers. Applications were evaluated blind to focus purely on potential impact. Decisions were made in three weeks rather than months. The fund partnered with a leading journal to publish negative results, creating incentives for scientists to pursue riskier ideas. Perhaps most notably, Jensen ran the entire operation through a mentorship program called the Longevity Apprenticeship, with apprentices handling everything from nonprofit setup to reviewer interfaces.

The fund has distributed 98 grants to date, with nearly a quarter going to graduate students and postdocs - a distribution that suggests its blind review process is surfacing different opportunities than traditional funders. Its continuation under the leadership of Lada Nuzhna, one of the original apprentices, indicates the model's sustainability.

Key Lessons

Impetus Grants demonstrates several interesting features of the fund model:

  • Domain experts can spot systemic gaps that aren't visible to traditional funders

  • Removing institutional constraints can allow for dramatically faster decision-making

  • Field leaders can design new incentive structures (like publishing negative results)

  • Light governance structures can work when built on careful reviewer selection

Philanthropic Funds

Examples of Philanthropic Funds

How we can help

How we can help

To provide a better path to ambitious giving and fuel important but neglected projects, Renaissance Philanthropy is incubating a collection of new philanthropic funds. Our systematic approach to developing new funds follows a staged process over 6-12 months:

  1. Field Scanning: We conduct comprehensive scans to identify promising fund leaders, potential theses, and anchor donors. This initial phase maps the landscape of opportunities and aligns potential leaders with funding sources.

  2. Fellow Selection: We select the most promising fund leaders as "Fellows" where we see strong potential for thesis development and clear donor alignment. The fellowship provides them with a runway to refine their approach and establish key relationships.

  3. Fellow Support: Each Fellow typically receives:

    • 6 months of part-time or full-time funding

    • Access to micro-grant funding for workshops and research to strengthen their thesis

    • Strategic support and networking opportunities (Note: Support levels may vary based on available funding)

  4. Graduation to Fund Leadership: Fellows who secure anchor funding (at least 20-30% of their target fund size) can graduate to become Fund Leaders. For Fellows showing strong progress but needing additional time to secure funding, we may extend their support period.

  5. Ongoing Support: Once anchor funding is secured we provide comprehensive support to Fund Leaders, including:

    • Fundraising assistance

    • Key operational infrastructure, such as grant-making systems, HR, and financial management

    • Force multiplying activities, such as guidance on the relevant policy landscape, strategic partnerships, recruiting, and devising solutions to other field-level challenges

    • Community building and collaboration with other fund directors

Resources

Resources