Translator: Delia Cohen Reviewer: Ellen Maloney
20 years ago, when I first joined the Edna McConnell Clark Foundation,
a community leader came to me
and presented a plan for helping kids
and addressing poverty in his neighborhood.
I was incredibly impressed with this plan,
but it did not fit our foundation's strategy.
So I wrote him a detailed letter, offering suggestions
for how he could narrow his focus
in order to meet the foundation's criteria
for funding smaller projects.
Well, the letter did not go over well.
The community leader approached me a few days later at a meeting
and went off:
"You have no clue.
Why do you think you know better than me
what our community needs?"
Trust me,
this is a heavily sanitized version of what was said.
(Laughter)
This was a low,
I mean really low,
moment for me.
That leader was Geoffrey Canada.
Yes, I was the naive, young person,
the "rube" if you will,
who tried to talk Geoff Canada out of expanding
what became the Harlem Children's Zone.
Geoff was not yet famous,
but he was by far the most inspirational leader
I had ever met.
He reduced me to tears,
and as my husband Lucas who is here today can attest,
the faucet did not stop for days.
Yet, that was truly
a life-changing experience for me.
I realized then
that our narrow funding approach
was never going to solve problems
for Harlem's kids.
Worse, it was just undermining Geoff's ability to lead and grow.
And it's really that epiphany that has led to everything
that I have worked on since
and to the idea that I am really excited to share with you today.
So, my dream is to see
a massive, radical change
in the way we funders invest.
Within ten years, I envision a "new normal,"
where dozens if not hundreds of funders join together
so that funding flows more rationally and robustly
to leaders with proven strategies for solving big social problems.
There are, as many of you here know,
many obstacles to expanding programs that work.
But if you're a social sector leader,
you know that your number one challenge
is the time that you have to spend
chasing dollars.
You also know that the better you are, and the bigger you are,
the less capital is available to you
and the harder it is to raise.
Last year in the U.S.,
individuals and foundations contributed $400 billion to charity,
but most of it went in small bites
to startups and individual programs.
The average foundation grant size was $35,000.
If we are to be brutally honest
with ourselves,
we have to ask:
is this piecemeal approach our best bet
for solving social problems?
I believe that the solutions are out there, even in this room,
but today money trickles to what works.
If we're serious about solving social problems, we have to make it flow.
Successful business investors already work this way.
So, when a Kleiner Perkins or another VC meets a visionary,
like a Larry Page or a Sergei Brin,
they invest holistically, not piecemeal,
to help that innovator bring his or her vision and company to life.
And I've also seen how this can work in the social sector.
So, while we were making small project-based grants,
Stan Druckenmiller,
a leading investor and philanthropist,
started making big long-term investments
in the Harlem Children's Zone.
He said, and I love this quote:
"I like to put all my eggs in one basket and watch that basket carefully."
It's that kind of investing
that has helped
the Harlem Children's Zone become what it is today.
15 years ago, our foundation made a big shift,
and we started making large, long-term, unrestricted investments
tied to performance.
But soon we saw
that even this was not enough.
Our resources alone were not big enough to effect the change that we sought.
So, we became fundraisers, ourselves, hand in hand with out grantees.
Most recently we launched a new venture called Blue Meridian Partners.
Blue Meridian is pooling a billion dollars from a diverse group of philanthropists.
Together, we are making investments of up to $200 million each
in high-performing nonprofits that are helping
the most disadvantaged children in the United States.
Our upfront capital is helping these leaders think big, go big,
and achieve more than ever before.
Take, for instance,
Mark Edwards and Peter Belden, the founders of Upstream.
They're tackling a root cause of intergenerational poverty:
the one million babies that are born every year
to mothers who did not plan to get pregnant.
Let me, just for a minute, illustrate the relationship
between poverty and unplanned pregnancy.
So, Mark tells the story of a woman,
a married mother of two,
who today is a successful, practicing attorney.
When she was a teenager,
she was poor and had to go through
incredible hoops to get an IUD.
She was lucky.
She got one, but she grew up
with 11 female cousins who were not as lucky.
Ten had unplanned pregnancies,
and today all ten are on public assistance.
This lawyer will tell you that getting an IUD
was her ticket out of poverty.
Today, when a low-income woman goes into a community health clinic,
it's not a standard practice to talk about contraception.
Upstream is changing this by training health care providers
to ask a woman whether she plans to get pregnant in the next year.
If she says no, she's offered many choices
including long-acting, reversible contraception,
and she can get this
on the same day that she comes in.
This is already the experience for women that go to private doctors
but not for low-income women going to community health clinics.
Think about this.
If you can help ten million women avoid unplanned pregnancies,
you have saved the country
billions of dollars in health and other safety net costs.
Best of all, you've printed millions of tickets
out of intergenerational poverty.
Isn't this the kind of impact that we want?
The payback dwarfs the size of the investment,
no matter how big that investment is.
Now, how do Mark and Peter go about raising
the hundreds of millions of dollars
that they will need for Upstream to fulfill its potential?
How do they even think about this
when the average grant size is $35,000?
Well, they don't.
Like many other social sector leaders,
they will ultimately have to lowball their expectations in relationship
to a piecemeal and constrained funding environment.
We need a new normal
where leaders do not have to twist themselves into pretzels
to chase small amounts of money.
We need a new normal where leaders like Mark and Peter
can get access to large infusions of capital more efficiently,
so that they can focus on execution and performance.
This is the new normal
that Blue Meridian is trying to achieve.
Another example
is the Nurse-Family Partnership created by David Olds.
Specially trained nurses work with
low-income, first-time mothers
during pregnancy
and until their child is age two.
They help moms develop parenting skills
and get access to education and job training.
Three decades of research show that this program works.
Children are significantly less likely to experience abuse and neglect.
Mothers are more likely to be employed.
One study estimates
that every dollar invested
returns five dollars in future savings.
This year there are 380,000 moms
that could be eligible for Nurse-Family.
Despite the public and private funding
that Nurse-Family receives,
it will only serve 35,000 of those moms,
essentially less than one-tenth of its future potential.
Can we even calculate the benefits
for that child, that family, that community?
Yes, our current solutions may not be absolutely perfect.
We may want them to cost less,
and we may want the evidence
to be even better.
But why don't we take the best that we have,
like the Nurse-Family Partnership,
and more massively invest in those organizations
so that they can continue to improve and build their evidence base
and get more cost-effective as they are growing?
Now, imagine a portfolio of these great strategies
like Nurse-Family, Upstream, Harlem Children's Zone.
And imagine a marketplace of these portfolios.
And imagine
that there's not just one Blue Meridian
but 20 Blue Meridians,
each bundling millions if not billions of dollars,
each focusing on a pressing social issue,
like the environment, health, or education.
Take Warren Buffet, for example.
Instead of forming his own foundation,
he decided to pool his resources
with the Bill and Melinda Gates Foundation.
What if more of us in philanthropy worked this way?
What if we pooled our resources
and then, together,
fully invested in our best strategies?
Imagine if this was the new normal.
Of course, this funding approach is not a substitute for also investing
in startups, grassroots, and community organizations.
And we will need to continue to advocate
for public funding and systems change.
But there's one thing that we have not really done.
We have not fully invested in taking what's working on a smaller scale
and bringing it to a large, national scale.
I believe that by collaborating and investing in this way,
we can make huge leaps toward solving
our most intractable problems.
People ask me why
we came up with the name, Blue Meridian.
For me, this meridian
is a new pathway to the future,
and the reason why it's blue,
like the clearest, most vibrant blue sky,
is because we have faith and optimism
that we can and we must do this together.
Thank you.
(Applause)