This piece is the result of a session at a recent colloquium on the future of philanthropy. There was enough interest that it seemed worth writing up. Thanks to everyone who participated in the discussion and Interact for hosting!
In 2026, more and more nonprofit efforts look like startups — small teams unaffiliated with existing institutions tackling ambitious problems through risky approaches that may end in failure.
But how we do philanthropy today was designed for a different world: one where philanthropy primarily supported things like education and university research, community organizations like churches or soup kitchens, and international aid. These are important things, but they primarily involve well-trodden patterns and existing institutions.
If you squint, philanthropy today resembles pre-VC finance in the middle of the 20th century; an institution tuned more for small manufacturers, restaurants, and general stores than high-growth, technology-based startups. People invested in weird ideas and new companies before VC existed, but it was ad hoc, opaque, and based largely on who you know.
Venture capital has systematized funding ambitious, risky work in a way that funnels billions of dollars a year towards it. (VC is, of course, not without flaws, which we won’t go into here; they’re part of the reason Speculative Technologies exists in the first place.)
I want to unpack the elements of the VC model that make it tick, with an eye towards “how could that be replicated in a philanthropic context?” Then, I’ll go through some structural differences between giving away money and investing that make adopting those elements hard. Finally, I’ll make some concrete suggestions for what those elements might look like in a philanthropic context.
A quick caveat to avoid putting qualifying language in almost every sentence: both venture capital and philanthropy are wide-ranging institutions; I’m aware that for almost every pattern I flag there are exceptions.
How (and why) VC systematizes supporting ambitious work
It’s worth starting with a quick and dirty overview of venture funding to highlight the pieces that make it good at coordinating funding towards high-risk ventures. Depending on your familiarity with VC funding, this overview will either seem esoteric or frustratingly incomplete.
A core piece of venture funding is the idea of investment rounds — that is, as an idea goes from a concept on the back of a napkin to a giant company with products and customers, it will raise increasingly large chunks of money. These chunks are your “pre-seed,” “seed,” “Series A,” “Series B,” etc. The goal of the funding in each round is to support the company to the next round (and eventually profitability or an “exit”). Under normal circumstances, each round is larger than the last as the company becomes derisked and its valuation grows.
Fundraising in rounds is a powerful system:
It acts as a coordination mechanism both to pool money of several investors, none of whom could support the company on their own, and to get them to pony up at a particular point in time. There’s a norm that a lead investor will do at least some of the legwork to wrangle the other investors into a single term sheet.
It creates a common language and set of expectations around what a company at a given stage should look like. If someone says “I’m raising a seed round” in 2026, one expects something slightly beyond a napkin sketch and something between $1 and $10M (although exceptions abound, especially in the AI world).
It enables firms and individual investors to specialize for specific rounds. The check size, diligence, and mindset you need for investing in a seed round are very different from those for a Series B. Rounds help make the amount of fundraising effort roughly commensurate with the amount of money.
It enables companies to spend a relatively short, concentrated amount of time fundraising every couple of years and end up with a pool of money they can spend from freely.
Philanthropy has none of this.
Coordinating philanthropic funding is incredibly hard. Each philanthropist has their own way of evaluating potential impact and diligencing opportunities. Unlike venture capitalists, who, despite different theses, are ultimately trying to turn one dollar into as many more dollars as they can, philanthropists have a fractal set of interest areas that they have little incentive to stray from. “Impact” or “good” is an infinite-dimensional vector. Even within broad areas like “climate” or even “greenhouse gas reduction,” funders will pass on great ideas because they don’t fall within the scope of a specific thesis like “methane removal methods that could remove N gigatons within the next 3 years.”
I’ve explicitly asked program officers at some high-status foundations “why don’t some sets of philanthropies just automatically fund a project when other orgs they trust decide that it’s worth funding?” The answer was “well, we have our own way of evaluating opportunities, which we think is the best. And so does everybody else.”
Philanthropic funding is almost always tied to a specific project or objective — run this fellowship, hire for this position, host this event. That approach creates a giant coordination problem where one needs to right-size chunks of work for the checks and interests of various funders. Heaven forbid a small, nimble organization realizes there is a better use of time and resources than what it planned six months ago. It also means that philanthropically funded orgs need to constantly fundraise, instead of going out occasionally, pulling together a war chest, and then getting back to work.
Instead of a smooth-ish continuum of checks and round sizes, philanthropy tends to be bimodal. Checks cluster at less than $1M (and because collaboration is hard, it is difficult to aggregate these into a larger sum for a single purpose) or more than $10M (what are known in the business as “major gifts”). Supporters may require just as much diligence for a $100k check as a $10M one.
There’s also a big difference between philanthropy and VC in how status flows, which has surprisingly large effects on risk appetite.
“Early investor in Uber” and the like can be a venture capitalist’s claim to fame -- it is high status to be early in identifying a breakout success. Philanthropy has the opposite norm -- it’s considered gauche to attach your name to the success of organizations you’ve funded. I know an incredible program director whose claim to fame (in my opinion) should be that he was one of the first supporters of the project that eventually became Jupyter notebooks, a critical piece of research infrastructure that has played no small part in discoveries from astronomy to AI. But he never mentions it and it certainly didn’t lead to him getting a raise or other professional opportunities. This norm came from a good place -- Gilded Age philanthropists like Rockefeller (and his right-hand man Warren Weaver) explicitly wanted to avoid dominating the limelight when their grantees succeeded. But it’s now counterproductive for supporting uncertain endeavors from new organizations. When there is no upside for principals or program officers to bet on early, risky work, there is every reason to just give money to consensus-good things and wait until a project already has momentum.
There are, of course, good reasons for many of these differences.
Because there’s no concept of shares in some value, there’s no straightforward way to reward supporters who get in early, create FOMO and competition, or encourage supporters to collaborate with others to hit a larger monetary goal than any of them could accomplish on their own in a specified time window.
The absence of profit makes alignment around governance hard, which in turn makes it hard to replicate VC’s large pooled unconstrained funding rounds. An investor can trust that as long as there are other investors on the board, there is governance that is looking out for their interest (making more money). The multi-variate nature of “impact” means that it’s hard for donors to trust that an organization will remain aligned with their interests, which is a big driver behind smaller, more constrained donations.
Philanthropy has no concept of an “exit” where an organization is either acquired or goes public, giving investors a chance to become liquid and to no longer worry about the organization raising further rounds. It’s much less attractive to give a big donation if the organization is just going to use it up and then pull a mouse-and-cookie and ask for more.
Nonprofits can technically acquire each other, but it rarely happens. As a company, being acquired can be lucrative for those being acquired and useful for the acquirers. But for nonprofits, there’s rarely upside on either side: the acquirers just take on additional fundraising burden and the acquirees lose independence.
Actionable Things!
That all being said, there are many things to be done to riff on the good pieces of VC. These potential moves are accessible to everybody who wants to use money to support less-than-maximally profitable good things, from individuals deploying small sums to huge foundations.
Create the equivalent of a “philanthropic SAFE” — that is, a standard, easy legal tool for small organizations to pull together funding without needing to jump through a ton of hoops. The philanthropic SAFE would need slightly more creativity than just a standard contract because the bottleneck in philanthropy is more around diligence, not contracting as it is in startups. One possibility is a lightweight agreement where a supporter agrees to match other support either at some ratio or via quadratic funding.
Create more consistent “diligence objects” that, once created by a trusted party (perhaps a high-status foundation or dedicated firm), enabled a nonprofit to pass it around and say “you in?” in a way similar to a term sheet. One could imagine a standardized report that scores an opportunity on focus area relevance, risks, timescales, and many other attributes. Making these useful will be an uphill battle: there are many things that are hard to put a number on and the aforementioned hesitation to trust external diligence.
Glory! Opportunities! Friends and Popularity! should be afforded to funders who support impactful efforts early. This could look like awards: -- nobody has yet created the Medici (or {insert your name here}) prizes for philanthropy. You could even have different categories, the way the Nobel does -- science, technology, policy, poverty, education, etc. This could look like individuals, whether they’re professional or not, keeping “impact portfolios” that could be a big part of a hiring and promotional process for professionals and bragging rights for the rest of us. Don’t you want to be the guy or gal who gets to say “Well I was one of the first 10 supporters for that weird independent researcher who invented antigravity when they were just getting started?”
Someone could create the philanthropic equivalent of the Yale Endowment’s prospect fellowship, which gives promising early-career investors real money to manage. A similar philanthropic effort could give an opportunity to manage large amounts of money to junior program officers or individuals with impressive impact portfolios.
Create more norms around anchor funders who then rally other funders and syndicates who pool their capital for a single bigger deal. Talk about the cool efforts you’ve supported as much as the deals you’ve invested in. Pull your buddies into a syndicate where you all commit $N/year that gets pooled and deployed to support a bigger “round” than any of you could have done on your own.
Create philanthropic “exits.” In the past, I’ve proposed that long-term funding commitments from the government for high-performing nonprofits (especially in research) could fill the role of IPOs in the venture world. Funders could facilitate mergers by committing more funds to the combined entity than either one would be able to get on their own.
And beyond all of these econ-coded actions (institutions! incentives!), you (yes, you!) can get started before any of them exist. Waiting for the incentives to line up is for losers. Act with conviction! Rally your friends! Take the same risks in philanthropy that you would in investing!
By way of helping solve meta-coordination problems, we’re happy to connect people who want to collaborate with others to work on/are working on any of these actionable things!
Appendix: an example of what philanthropic stages might look like
(With a particular focus on research-heavy projects because that’s what I spend a lot of time thinking about.)
Idea Generation (Pre-seed)
This is the nascent phase where an idea goes from a hunch to a concrete plan.
The work at this stage involves a lot of talking to people, roadmapping, perhaps a few small experiments to get preliminary data, and a lot of iteration. Funds here go towards salaries for one or two people, travel to conferences or meet experts, and perhaps hosting workshops.
This is the stage where non-monetary help can be maximally useful: mentorship, connections, etc. (But even here, help is rarely a full substitute for cash that enables people to spend their full attention on a project, travel to meet people in person, and bring allies together in the same place.)
Idea generation can take anywhere from three months to several years depending on whether the project is full time or not, previous experience, and a host of other factors.
Some rough “quanta” of funding at this stage includes: ~$1500: a trip including flights and hotels. ~$50k: a workshop ~$100k: a fellowship for one person for a year
As a result, this stage takes roughly ~$100-500k.
Derisking/Proof of Concept (Seed)
The goal of this stage is to demonstrate a project’s feasibility: an experiment validating a key assumption, a simulation or model that suggests the idea will work, or a small field study showing an effect. The scale is small (often one researcher or a tiny team for a few months to a year). It often produces preliminary data or a prototype v0.1.
This stage generally costs $500k-$3M.
Prototyping/Development (Series A)
The goal of this stage is to create something that could “get out into the world” in one of many ways like publishing, an open source project, adoption as a standard or new field, or becoming a company or licensed IP. At this point it’s clear how funds on the order of $10M can be spent productively. The actual work can look incredibly different depending on the project: from an FRO to something like a DARPA program to a 20-year-long-slow-burning project.
Scaling and Deployment (Series B+)
This is the stage where the project gets out into the real world. In science, this might mean expanding a trial to many sites, or moving from a prototype instrument to deploying it for general use. In technology, it means manufacturing, distribution, market entry, or policy adoption. The work at this stage typically involves operations at significantly larger scale than previous stages: multiple teams, coordinated deployment across sites, production engineering, regulatory approval processes, and development of sustainable operational models. Funding needs increase dramatically, often requiring $50-200M+ depending on the domain and scale of deployment.\
This stage tests whether promising prototypes can function reliably in real-world environments and create intended impact. Success requires different skills than earlier stages - project management expertise, operational discipline, and ability to manage organizational complexity become as important as technical innovation.