The world is full of large, difficult and often intractable problems. And, unfortunately, pulling together the resources to solve them is often a challenge.

Charities and nonprofits seek to address these social issues. Unfortunately, many lack the scale and resources to truly challenge the problems they seek to solve.

While governments have substantial resources, political considerations and risk aversion often stand in the way of them leading the charge on many issues.

Likewise, while businesses have substantial capital and resources, they are ultimately answerable to their shareholders.

So who is in a position to pull these groups together to create impactful social change? Who can unlock the resources of governments and businesses, combining them with the nonprofit sector?

The answer, on many issues, could be philanthropists and major donors who view their primary role as catalysts for change.

A definition of catalytic philanthropy

The term catalytic philanthropy was first used by Mark Kramer, Co-Founder and Managing Director FSG Social Impact Advisors. He used the term in the Stanford Social Innovation Review in 2009, and has since written extensively on the topic.

According to Kramer, catalytic philanthropy is: “An approach practiced by innovative funders to create transformative change beyond writing the cheque.”

“Truly catalytic philanthropists often ‘punch above their (financial) weight’ by leveraging their voice, community relationships, and non-grantmaking skills such as convening and capacity building to drive social change”.

How catalytic philanthropy is different

According to Kramer, catalytic philanthropists are different to other major funders because they:

• have the ambition to change the world and the courage to accept responsibility for achieving the results they seek
• engage others in a compelling campaign, empowering stakeholders and creating the conditions for collaboration and innovation
• use all of the tools that are available to create change, including unconventional ones from outside the nonprofit sector
• create actionable knowledge to improve their own effectiveness and to influence the behaviour of others.

Leading funders who embrace the catalytic philanthropy model

The catalytic philanthropy model has inspired some of the world’s leading philanthropists, including Bill and Melinda Gates.

In a 2012 blog post, Gates described how he deployed the catalytic model to tackle malaria:

“Philanthropy’s role is to get things started. We used foundation funds to set up a system to make market forces work in favor of the poor, guaranteeing purchases so drug companies could make a little bit of money, or at least not lose their shirts,” Gates wrote.

“As the value of this approach became clearer, governments put in money to add to the market incentives, and some drug companies began to factor poor-world diseases into their business model.

“In both research and delivery, well-targeted philanthropic money triggered action from business and government. [Between 2000 and 2012], this catalytic philanthropy partnership has immunised more than 250 million children.”

Catalytic philanthropy in Australia

Catalytic philanthropy is gaining ground in Australia. Leading trusts and foundations, such as the Menzies Foundation, are adopting it as a model of practice.

The foundation was established in 1979 to honour the legacy of Sir Robert Menzies, Australia’s longest serving Prime Minister. Since then, it has worked to encourage Australians to reflect on leadership, build their own capabilities and take leadership roles in the community.

During its first 40 years, the foundation built a solid track record in supporting outstanding leaders across a range of fields. It awarded more than 230 scholarships and made significant grants to support medical research.

The alumni of its programs have made a substantial impact across a variety of areas ranging from mental health, cancer and autism, to global human rights issues and climate change.

The Menzies Foundation’s bold new vision

In 2018, following a strategic review, the foundation set out a bold new vision and with it, a mission to transform itself.

It identified its three priority areas as entrepreneurship in science, leadership in schools and supporting Australia’s response to complex global legal issues.

To achieve impact in these key areas, the foundation is leveraging the catalytic model to support initiatives that:

• build collaboration platforms to harness partnership expertise and resources for impact
• build incubators to develop innovation pipelines
• codify the insights and disseminate the learnings with others to develop systemic interventions to scale the initiatives.

At the 2020 Generosity Forum, to be held in Melbourne on Tuesday 5 May, Menzies Foundation CEO Liz Gillies and Peter Jopling, AM, will discuss the internal challenges and key factors in successfully transforming the foundation.

During the session, Menzies and Jopling will detail how the foundation is already building multi-sector incubators to impact school leadership and science entrepreneurship.

The Generosity Forum will be held on 5 May at the Pullman Melbourne on the Park, opposite the MCG and the Fitzroy Gardens. The conference aims to provide insights, inspiration, best practice, new developments and case studies from those leading change in philanthropy.

At the 2020 Generosity Forum you’ll hear a great mix of insight, inspiration, best practice, new developments and case studies from those leading change in Australian philanthropy. Don’t miss out!