Small Steps or Giant Leaps? A Comparative Analysis of Moonshot Philanthropy and Market-Based Philanthropy

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Abstract

Against a backdrop of persistent and growing critique against philanthropy (e.g. Salamon 1987; Ostrander 2007; Reich 2020), a host of alternative philanthropic approaches have been proposed, each claiming to be more innovative, effective, or just than the last (e.g. Bishop 2006; John 2006; MacAskill 2015). We compare two philanthropic approaches: market-based philanthropy and moonshot philanthropy.

Market-based philanthropy involves “the integration of market motifs, motives and methods with philanthropy” (Haydon et al., 2021). Adopters of market-based philanthropy (e.g. venture philanthropy, philanthrocapitalism, effective altruism) claim to address perceived inefficiency and ineffectiveness of ‘traditional philanthropy’ by deploying the tools, techniques, and logics of for-profit markets (Eikenberry and Mirabella 2017). Moonshot philanthropy is described broadly as “funding high-risk, out-of-the-box ideas to identify scalable solutions for today’s societal and climate challenges” (Ang and Tan 2022). Moonshot philanthropists combine significant funding and a high-risk appetite with domain expertise and stakeholder collaborations to target highly ambitious goals over at least a decade (Breeze and Chen 2022).

Drawing from Kramer (2009), we develop and present a comparative framework, analysing and contrasting the two approaches based on their characteristic aims, resources, players, and methods. These characteristics have been identified through an extensive literature review, and will be supplemented by early case study insights. We argue that whilst moonshot and market-based philanthropy both target ‘systemic change’ over immediate relief (i.e. giant leaps over small steps), they target different systems leading to key differences in approach.

Market-based philanthropy targets the third sector, using market-based tools (e.g. due diligence, quantitative measurement) to transform the sector to be more business-like and therefore efficient (Bishop, 2006, 2013). Market-based expertise and experience are hence prioritised over others (Fejerskov & Rasmussen 2016), and emphasis is placed on evidence-based decision-making, targeting already proven interventions. Thus, contrary to claims that market-based approaches are risk-seeking (Bishop, 2013), the pressure to make evidence-based decisions and yield a measurable return may reduce risk-taking (de Souza Leão & Eyal, 2019). The prioritisation of market logics further amplifies the marketization and financialization of the third sector, entrenching social issues and neglecting causes/recipients deemed not amenable to market-based solutions (Eikenberry 2009; Haydon et al., 2021).

Moonshot philanthropy targets a cause/industry area, prioritising domain over market expertise and experience, and collaborations with state and non-state stakeholders (Breeze and Chen 2022). Emphasis is placed on building the evidence base from which future decisions can be made, targeting innovative, early-stage interventions (Chen, 2023). Key to the approach is the targeting of ‘moonshots’ - ambitious objectives that inherently involve a lot of risk (to be taken on by the philanthropist) - and focusing funding and efforts around this single objective. Case study insights will reveal the extent to which moonshot philanthropy avoids or falls ill to the same issues and criticisms of market-based philanthropy, or whether it offers an alternative approach to addressing social issues.

Our findings build conceptual understanding of both market-based and moonshot philanthropy, and the similarities and differences between them. Our comparative framework can be used to contrast and evaluate other philanthropic approaches.

References

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Authors

• Steph Haydon, Centre for Philanthropy, University of Kent

• Weinan Wang, Centre for Philanthropy, University of Kent