How Thesis-Driven Funds Can Catalyze Transformational Progress

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There are 40,000 families globally with $100 million or more in wealth. These families could play a catalytic role in a 21st-century renaissance, in the same way that wealthy Italian families supported the Italian Renaissance. More recently, the Rockefeller Foundation supported the Green Revolution and the emergence of molecular biology
as a new scientific discipline, and many foundations contributed to the child survival revolution that dramatically reduced child mortality in developing countries.

Many of today’s wealthy individuals and families have expressed interest in playing this catalytic role, including by committing to give away at least half of their wealth during their lifetimes. However, according to a report by Bridgespan, the average level of philanthropy from wealthy families in the United States is roughly 1.2 percent of their wealth.

What accounts for this gap between the stated intentions and actions of philanthropists? We think there are two primary factors.

First, we know from historical examples that ambitious philanthropy often requires access to talented individuals. Consider the role of the Rockefeller Foundation in creating the field of molecular biology. Warren Weaver, the director of the natural sciences division at Rockefeller, hypothesized that advances in physics could transform our understanding of life at a molecular scale. Based on that hunch, he assembled and supported a group of physicists, chemists, and biologists, leading to breakthroughs such as the discovery of the double-helix structure of DNA. Between 1954 and 1965, 18 Nobel Prizes were awarded for work on molecular biology, and 15 of these prize winners had been funded by the Rockefeller Foundation. Notably, the foundation had funded these scientists on average 19 years before they won their prizes. On their own, philanthropists may have a hard time emulating Warren Weaver.

Second, many philanthropists are either hesitant or unable to find and recruit Warren Weaver-like individuals to support their philanthropic giving. The reasons for this include (a) the philanthropists are still professionally active and don’t have much time to devote to philanthropy, (b) they do not want the overhead of hiring and supervising a team, (c) they may not be interested in the publicity which building an institutional giving vehicle can attract, or (d) they are unsure where to find and how to recruit the Warren Weaver equivalents in their fields of interest.

As a result, many wealthy individuals default to some combination of allowing their wealth to accumulate or making safe bets on established institutions. By doing this, they miss out on opportunities to make transformative investments such as creating a new scientific field or sparking the Green Revolution.

A Better Model

We are excited about an emerging model for ambitious philanthropic giving. Drawing inspiration from the emergence of venture capital in the 1950s, this model—which we call thesis-driven philanthropic funds—enables donors to leverage field experts without building large teams. We believe this model provides a more efficient and effective approach to ambitious giving and we are proactively working to scale it.

The thesis-driven philanthropic fund model consists of three core pillars:

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

Consider the example of Martin Borch Jensen. Jensen earned his PhD in the biology of aging and received a prestigious NIH award to jumpstart an academic career, but he decided instead to return the grant and launch Gordian, a therapeutics company. In 2021, Jensen and his colleague Lada Nuzhna (who now leads the project) designed and launched a philanthropic fund called Longevity Impetus Grants (LIG). This fund has already awarded 98 grants to address some of the most important problems in aging biology (also known as geroscience). Researchers receiving grants from LIG have already started publishing results on topics such as the use of cell atlases to understand the fundamental principles of aging in complex organisms. The fund has attracted support from several philanthropists and foundations, including Juan Benet, James Fickel, Jed McCaleb, Karl Pfleger, Fred Ehrsam, Vitalik Buterin, Hevolution, and the Rosenkranz Foundation.

For philanthropists, supporting thesis-driven philanthropic funds like LIG offers several powerful advantages over other methods of giving. The core value proposition of the model is that it provides access to deep expertise without requiring philanthropists to maintain in-house teams. Fund directors bring both domain knowledge and extensive relationships in their fields, enabling them to pursue non-consensus bets, to conduct sophisticated due diligence, and to create new initiatives by connecting individuals and teams with complementary strengths. Beyond just providing capital, fund directors can act as force multipliers for the teams they support, offering strategic guidance, connections, and other non-monetary support that helps projects succeed.

A second and related advantage of the thesis-driven fund model is that it makes recruiting top talent easier. Many leading experts are deeply engaged in research, policy work, or entrepreneurship. These individuals may not be interested in traditional foundation roles, but the flexible, independent nature of philanthropic funds allows them to direct philanthropic capital while maintaining their other, often complementary pursuits. Furthermore, multiple philanthropists can support and work with a single fund director, creating efficiencies in leveraging scarce talent.

A third advantage of the fund model is speed. The fund model enables philanthropists to move rapidly into new cause areas without having to first build internal capacity. This attribute is especially important in fast-evolving domains like artificial intelligence: 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.

Finally, the fund model offers scalability beyond traditional giving. Philanthropists often have a small number of investees with whom they maintain direct and active relationships. This model typically hits diminishing returns at relatively modest levels ($10-100 million per year). This is because (a) there are only so many relationships individual philanthropists can effectively maintain and (b) there’s only so much funding a small set of investees can effectively absorb. By instead maintaining relationships with a portfolio of fund directors, who themselves maintain dozens of relationships, philanthropists can deploy more of their wealth without a drop-off in effectiveness. For those committed to giving away significant wealth in their lifetimes, this scalability is crucial.

Similarities and Differences to Others’ Models

Thesis-driven funds, as we characterize them here, have multiple similarities to other forms of collaborative philanthropy—principally that they give donors the opportunity to pool their capital in a single vehicle staffed by experts on a topic, rather than trying to hire those experts in-house.

In particular, 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(s). Donors act as the philanthropic equivalent to limited partners (LPs). They may contribute their network and expertise—for example, helping the fundraise 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 achieving an ambitious goal requires a portfolio of mutually reinforcing projects, as opposed to a set of 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 open-ended period of time. Conversely, in the thesis-driven fund model, there is always a concrete goal (e.g. develop a platform technology that will accelerate the pace of biomedical research) that is accomplished over a specific period of time (e.g. five years).
• Approach:
  Some collaborative philanthropic efforts are project-based, supporting a pre-identified nonprofit to take on a larger-than-usual effort. Conversely, thesis-driven funds, as the name suggests, focus on funding multiple teams and organizations across a field to achieve a particular goal.

These differences are not always advantages—sometimes pooled decision-making, a broader focus, and a project-based approach make sense—but reflect how the thesis-driven fund model is distinct from other forms of collaborative philanthropy.

The Path Forward

We are actively working to expand this model. Our respective organizations—Renaissance Philanthropy and Alpha Epsilon—work to identify promising fund leaders, support them in refining their theses, and provide them with the operational infrastructure and funding they need to succeed. Our goal is to create a vibrant ecosystem of exceptional fund directors and philanthropists who are willing to support them.

The parallels to the early venture capital industry are striking. In the 1950s, early-stage technical startups struggled to attract investment from institutional investors which lacked the technical expertise and bandwidth to vet small, highly technical opportunities. Pioneering venture capital firms like ARDC and Kleiner Perkins solved this problem by raising money from large limited partners (LPs) and then backing game-changing companies like Fairchild Semiconductor, developer of the first commercially viable integrated circuits. Today’s nonprofit ecosystem faces similar challenges—universities today can easily secure nine-figure gifts, but high-potential early-stage initiatives often struggle to get on donors’ radar. We believe philanthropic funds, led by field leaders, organized around an ambitious thesis, and backed by donors acting as the equivalent to LPs, can fill that gap.

Philanthropic funds represent a crucial innovation in giving—one that can help unlock the tremendous potential of today’s accumulated wealth for solving society’s most pressing challenges. By enabling donors to leverage deep expertise without building large teams, this model offers a path to more effective, scalable philanthropy for the 21st century.

Read more stories by Tom Kalil & Anna McKelvey.