Case studies in funding innovation: A few wild and crazy ideas How the Gates Foundation's Grand Challenges Explorations program finds and funds radical new approaches from across the globe

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Introduction to the case studies

Innovation has long been an essential part of philanthropy. But the process of searching for and supporting new approaches can be messy. The reality is that the path from idea to impact is often long, winding, and unpredictable, and there is no simple, step-by-step methodology for finding and funding new ideas.

That doesn’t mean, however, that philanthropic funders can’t be intentional about the approaches they use to seed and scale social innovation. In our 2014 Stanford Social Innovation Review (SSIR) article “The re-emerging art of funding innovation,”(1) we highlight the ways that the processes, strategies, and structures required to deliberately seek out and support early-stage, breakthrough ideas can be quite different from those used in more traditional grantmaking.

To further illustrate what it really takes to fund innovation in practice, we have developed five case studies that aim to capture the realities of the innovation funding process. Each looks at the process of supporting innovation from a different angle:

• Reverberating impact: How the Robert Wood Johnson Foundation’s Pioneer Portfolio helped seed and scale Project ECHO dives into how a foundation can help an early-stage idea blossom into something that may grow to be transformative.
• Can’t do it a-loan: How innovation funding helped Kiva launch and develop looks at the innovation process from the other side, starting with a high-profile innovation and looking back at how it was found and supported by philanthropy.
• A few wild and crazy ideas: How the Gates Foundation’s Grand Challenges Explorations program finds and funds radical new approaches from across the globe looks at the deliberate processes that one innovation funder has developed to find and select ideas with transformative potential.
• Keeping cool: How a coordinated ecosystem for innovation supported the growth of Promethean Power Systems explores how The Lemelson Foundation has created the infrastructure and support to help many new innovations develop over time.
• Diffusing innovation: How an ecosystem-based approach is helping social impact bonds to spread examines a different sort of ecosystem—one designed to help diffuse a potentially powerful innovation more rapidly.

None of these cases alone tells the whole story of what funding innovation looks like; they explore a range of approaches that emphasize very different aspects of the process. But we believe that the collective set of case studies begin to paint a well-rounded picture of many of the processes and approaches that innovation funders can use to nurture and scale new ideas with transformative potential.

It’s important to recognize that these stories are not about the innovations themselves. They don’t explore whether Kiva should actually be considered a truly game-changing financial innovation, or whether the Gates Foundation’s Grand Challenges program should have hit a “home run” already after 10 years of operation. Those are questions for another time and place.

But each of the examples described in the cases is showing important signs of promise, and because creative funders were willing to embrace a different way of working, the innovations have been able to grow from the seeds of ideas to full-fledged experiments. It’s still too early to answer whether they will ultimately prove to be transformative—but it’s clear that if the funders involved had been wedded to more traditional grantmaking approaches, we might not even be able to ask the question.

The innovation processes described in the cases here are inherently complex, full of stops and starts, iterations, and failures. And one of the clearest takeaways looking across the stories is that there is simply no straightforward recipe for funding breakthrough ideas. But the cases do help to illustrate an emerging set of “innovation funding principles” that can allow funders to better identify and support early-stage, high-risk, high-reward projects:

• Seek out ideas from new places. Finding ideas with the potential to create lasting transformation means reaching beyond the usual suspects to find promising new solutions.(2)
• Select ideas to support based on their potential for transformation. As Eric Toone, vice-provost and director of the Duke University Innovation and Entrepreneurship Initiative, explains, “When you’re doing innovation, the first question is not ‘Is this going to work?’ but rather, ‘If it works, would it matter?’”(3)
• Provide risk capital. Many nonprofits and social activists operate with limited resources and are so focused on accomplishing their goals that they have little time and money available to experiment with new ideas. Providing flexible, unrestricted financing that can be used to try new approaches can be critical to promoting innovation.
• Support innovations with more than money. Virtually all funders try to support the work of their grantees, but early-stage innovations often require an especially hands-on approach to help mold emergent strategies, prototype new concepts, and build necessary systems and networks.
• Build ecosystems for innovation. Because foundations are rarely positioned or staffed to provide all of the different supports required to help an innovation grow and spread, it is often important to put infrastructure in place that can provide the necessary assistance required to move innovations ahead.
• Allow for iteration and failure. As Van Jones, a senior fellow at the Center for American Progress, has explained, funders need to “stop giving grants and instead start to fund experiments.”(4) This means building an appreciation for iteration, failure, and learning—it’s not necessary to know all of the answers and outcomes right from the outset.
• Focus on learning and improving. Funders need to be careful not to mistake wrong turns for roadblocks. Innovations often follow a long and circuitous path, and funders need to balance the tension between “failing fast” and allowing enough time for ideas to iterate and develop.
• Think about scale and spread of innovation from the start. Innovation funders need to start thinking about scale and diffusion early by recruiting other funders to support later-stage innovation, exploring how to connect innovations to markets, soliciting support from government, and disseminating information and building capacity to help promote widespread adoption of new ideas.

Perhaps unsurprisingly, these principles mirror many of the key elements that were discussed in our 2014 SSIR article related to the sourcing, selecting, supporting, measuring, and scaling of innovation. As we explained in that piece, innovation funding shouldn’t be seen as an alternative to, or replacement for, strategic philanthropy; funding innovation is actually an integral part of good, strategic philanthropy. And we believe that embracing these innovation funding principles can help with virtually all aspects of a funder’s grantmaking.

For many funders though, taking risks on high-potential projects won’t be necessary or appropriate for all of their work. Instead, the principles are better applied to just a subset of their giving activities. And much as financial investors try to build a diversified portfolio—placing the majority of their assets in investments with safe and steady returns, but using a smaller percentage for higher-risk opportunities with the potential to produce outsized rewards—funders, too, should consider using a portion of their resources to support innovation alongside their investments in more consistent and proven approaches.

Eric Schmidt, the former CEO of Google, used to describe what he referred to as his 70/20/10 rule: 70 percent of management’s effort should be dedicated to core business tasks, 20 percent should be focused on projects related to or adjacent to that core, and 10 percent should be dedicated to unrelated but high-potential new businesses.(5) Using this type of portfolio approach allowed Google to focus the majority of its resources on proven strategies that formed the heart of its business while ensuring that it wasn’t missing out on important new opportunities and impact.

For funders, 70/20/10 may not be the right ratio. Each foundation and donor will need to think about its own unique risk-reward profile. But imagine the potential impact if all funders dedicated 10 percent of their giving to experiments that may have a high likelihood of failure but that, if they succeed, could transform a critical system. With so many more ideas being supported, if 1 in 10, or even 1 in 100, of the innovations could succeed, it could change the world.

We hope you enjoy the story of innovation funding that follows, and we hope that it illuminates some of the ways that your organization might embrace supporting breakthrough ideas as part of your funding portfolio in the future.

Endnotes:

(1.) Gabriel Kasper and Justin Marcoux, “The re-emerging art of funding innovation,” Stanford Social Innovation Review, spring 2014, http://www.ssireview.org/articles/entry/the_re_emerging_art_of_funding_innovation.

(2.) For more information on this topic, see Gabriel Kasper and Justin Marcoux, “How to find breakthrough ideas,” forthcoming as a blog post in Stanford Social Innovation Review.

(3.) Kasper and Marcoux, “The re-emerging art of funding innovation.”

(4.) Ibid.

(5.) CNN Money, “The 70 percent solution,” December 1, 2005, http://money.cnn.com/magazines/business2/business2_archive/2005/12/01/8364616.

Introduction

Philanthropists talk a lot about taking risks.

But what does it really mean for a funder to take a chance in the pursuit of outsized rewards? And how can a funder make sure it is taking smart risks rather than just gambling on every crazy and exciting-sounding idea that comes its way?

There is no single correct answer to these questions. But for about a decade now, the Bill and Melinda Gates Foundation’s Grand Challenges in Global Health Initiative—and in particular, its Grand Challenges Explorations (GCE) program—has grappled with these issues. While many parts of the foundation pursue more proven approaches, such as bed nets to fight malaria or traditional family planning to improve maternal health, the GCE program specifically seeks out and supports high-risk, high-reward approaches, such as an effort to genetically modify mosquitos so that they can’t transfer the malaria virus, or a project to fundamentally reimagine the condom.

A number of years in, the program has yet to hit its first innovation “home run,” although it has numerous promising ideas in the pipeline. It’s not clear whether the GCE model will ultimately produce a steady stream of the types of breakthroughs that it aspires to create, but understanding the process that has been developed and capturing the lessons that the program has learned can nevertheless offer important guidance for any funder interested in finding ideas from new places, taking smart risks, and investing in breakthrough innovation.

The Grand Challenges model

When Bill Gates first announced the Grand Challenges in Global Health initiative at the 2003 World Economic Forum in Davos, Switzerland, he was using a model inspired by mathematician David Hilbert’s grand challenge nearly a century ago. Hilbert’s list of important unsolved problems spurred innovation in mathematics for generations. The goal for the Gates Foundation and its partners was to open up innovative thinking from across disciplines and fields—including many that historically have not been involved in health work—to develop new solutions that could lead to radical improvements in health in the developing world.

To encourage even broader participation and even less conventional approaches, the foundation then launched the Grand Challenges Explorations program in 2008. The GCE program identifies health and social challenges and allows anyone in the world to submit a two-page application with an idea for addressing that challenge: The first page describes the idea and why it is important, and the second page lays out what the applicant will do to make it happen. The program provides those with the most promising new ideas $100,000 in phase I funding to prove their concept, and up to $1 million more in phase II funding to continue successful explorations.¹

To date, the foundation and its partners have received more than 50,000 applications from 182 countries around the world, and they have awarded more than 1,000 initial exploration grants in 61 countries, with 97 promising projects receiving phase II support.²

The sheer magnitude of challenges, applications, and awards managed by the GCE team over the last seven years has helped the program identify its own “formula” for surfacing global innovations. That formula consists of three distinct elements—topic generation, challenge design and launch, and selection—each of which offers important lessons for other funders interested in finding and funding breakthrough ideas.

Crafting the challenge

Crafting a good challenge is at the heart of the GCE and Grand Challenge model. Successful challenges attract new problem solvers with different perspectives and expertise to focus on a particular problem in global health. Issues that can’t be well defined, that don’t benefit from global reach, or that already have well-defined solutions typically don’t make for the best challenges.

The program has also tended to focus on issues where a new invention or technology could make a meaningful impact. One of the first explorations, for example, in 2008, focused on how to “create new ways to prevent or cure HIV infection,” and responses to the challenge included ideas for new vaccines, drugs, and delivery methods.³ But while scientific discovery remains the dominant type of exploration, challenges can have a nontechnical focus as well. In 2012, the GCE team partnered with the Cannes Lions International Festival of Creativity to communicate the effectiveness of international aid in a challenge called “Aid is working. Tell the world.”⁴ Submissions ranged from e-books to mass branding and engagement strategies.

To choose which challenge the GCE will put forward, the team works closely with leaders of the Gates Foundation’s other program areas. Together they identify a potential challenge and quickly conduct initial research to understand basic feasibility, ensuring that the challenge is on strategy for the foundation, that meaningful progress can be made with the initial $100,000 grant, that the teams can clearly articulate the challenge, and that the challenge would benefit from the creativity of a global and diverse set of solvers.

When the teams agree that a challenge make sense, a unique financial agreement with the program area ensures that funds are available for both the phase I and phase II experiments. The GCE project team generally funds most of the phase I explorations through its own dedicated budget, but it requires that the partnering program team set funds aside for phase II funding for projects that prove successful. This system encourages program teams to use phase I GCE challenges as a low-cost way to surface a number of new ideas, monitor their progress over time, and commit major resources once more information is available. A well-constructed system for funding innovation like the GCE program can “derisk” early-stage ideas for other foundation program areas. Equally important, though, is that other program leaders are bought into the process and are ready to continue funding for ideas that show particular promise.

For instance, under the challenge to “explore nutrition for healthy growth of infants and children,” one project applied a new brain imaging technology—using harmless infrared light and a cap-like device—to determine the impact of under-nutrition on the developing brain in Gambian and British infants. Subsequently, the nutrition team at the foundation funded the project’s GCE phase II award to continue the progress. In addition, another Gates unit—the Family Health Discovery team—also integrated the new developments into a separate project focused on links between under-nutrition and the poor performance of oral vaccines.

Designing and launching the challenge

Once a general challenge concept is agreed upon, the GCE team and a topical leader from the relevant program area begin to craft the call for proposals. This process remains more of an art than a science. Calls start with a clear description of the problem that someone unfamiliar with the content could readily understand and, hopefully, be inspired to act on. Calls also provide some framing to the applicants, including attributes of the solution that the foundation is looking for and types of projects that it will not fund (either because they are currently being funded, have been tried before, or are otherwise unfeasible). The team works to balance brevity, clarity, and inspiration, all while providing enough guidance to elicit proposals that are on track, but not so much guidance that the team inadvertently prescribes a particular solution.

However, no matter how much work goes into crafting the call, it can never be perfect. So the GCE team builds into its launch process an opportunity to adjust the call if needed. After a call has been open for two to three months, the program records the submissions and reviews them for any relevant patterns. Then, six months later, after tweaking the challenge call, the GCE team reopens it for another two to three months. By maintaining flexibility and iterating quickly, the GCE team can help ensure that it receives a broad enough range of solutions. The team notes that, while it receives fewer submissions from revised calls, the new proposals are often more aligned to the challenge.

Launching a challenge in a way that generates thousands of applications itself is a massive effort.

Beyond the ideas that are funded, there are additional benefits to the thousands of applications that are generated. Looking across all the applications and creating a synthesized view of the breadth and scope of submissions gives the foundation an interesting map of the landscape of possible solutions. In 2013, for example, the GCE program launched a challenge to “develop the next generation of the condom,” asking potential solvers to rethink the condom in a way that would increase usage. The call suggested that designs could incorporate new materials, take new shapes, or apply knowledge from fields such as neuro- or vascular-biology to improve user experience and thus condom desirability.⁵ When the GCE team received the applications and recorded the data, they had also essentially mapped the current state of innovation in condoms. And when an important condom manufacturer heard about the challenge, it reached out to the foundation to share notes about innovation and explore potential partnerships.⁶

Launching a challenge in a way that generates thousands of applications itself is a massive effort. The team has a 200,000-person email list, about half of which is generated through organic sign-ups, and half through purchases from marketing firms, which serve as the primary channel of communication. The call is published in five languages: English, Spanish, French, Portuguese, and Chinese. And the team bolsters its email campaign by writing on the foundation blog, The Impatient Optimist, as well as on partners’ websites to further spread the word. Occasionally when applications from a certain country or region are under-represented, the GCE team will travel to that region and meet with local community leaders and researchers to explain the particular challenge as well as the GCE model more broadly. Outside the United States, the team also works to address potential cultural barriers to the challenge model. For instance, in some countries, junior researchers may not apply out of deference to more senior researchers, so the GCE team would connect with the head of universities and research groups to communicate explicit “permission” for everyone at the organization to consider applying. In total, the GCE team receives about 3,000 applications for each challenge and selects about 100 for phase I awards.⁷

For some challenges, the foundation also finds that mass media can play a critical role in publicizing the calls. The GCE team has formal media arrangements that help it publicize calls, especially in country-specific publications targeted at scientists. But sometimes the foundation’s challenges go viral. When the program ran its Next Generation Condom Challenge, one gentleman made a YouTube video explaining his idea—a modified slingshot that could apply a condom in less than a second—which garnered more than 5 million page views.⁸ Web traffic for the challenge jumped by a factor of 40, phase I applications more than doubled, and visitors from virtually every country in the world viewed the challenge’s website.⁹ More importantly, the media message also provided important visibility and brought the general public into the conversation about reproductive health in the developing world.

The GCE team is also diligent about tracking the attention that each challenge generates. The team follows Web traffic, response rates, media mentions, and the focus areas of the submitted applications. The GCE team can then use that information to track the pattern of response and further adjust the call if needed. For example, if the team notices that it is getting a proportionally greater amount of submissions for male condoms versus female condoms, it might consider revising the outreach strategy or the call language in the second submission six months later.

Selecting recipients

Once the calls are closed, the Gates Foundation begins the rigorous phase 1 selection process. The first step is to screen out the applications that do not actually respond appropriately to the call. Because the program offers a $100,000 grant and has such low barriers to entry, the foundation receives many applications that are either frivolous or otherwise do not meet the criteria in the challenge. (With the Next Generation Condom Challenge, for example, the GCE team received an application from an American college fraternity offering to test the newly designed condoms.) Other nonresponsive applications are more nuanced. Because the GCE team was looking for a technical solution to the condom challenge, it noted that it would not fund projects that were solely focused on educating people about condom use. While the GCE team is careful not to eliminate proposals unnecessarily by reading each application at least twice and regularly consulting with the topical lead, it also wants to ensure that reviewers’ time is well used.

The GCE program then utilizes two separate review panels to decide which projects to fund: an innovation panel and a topic expert panel. Members of the innovation panel are not necessarily experts in the subject matter of the challenge, but rather are serial innovators with a track record of creating important new products or approaches. Expert panel members, on the other hand, are chosen by the foundation’s program area topical lead in consultation with the GCE team.

As a first step, each innovation panel member receives a subset of the applications that does not contain any information that would help to identify the applicants; the submissions are to be judged solely on the quality of the ideas. Each innovation panel reviewer rank-orders the six most innovative proposals. The top-ranked project for each member receives a gold award and is automatically funded (barring any administrative or legal hurdles). The remaining five receive a silver award and garner further consideration.

It is important to note that the foundation does not ask the innovation panel to meet, discuss the proposals, and reach some sort of consensus, as is common with many grant processes. Too often, the program finds that consensus kills risk. So the GCE team trusts the individual intuition and judgment of each panel member by funding each member’s gold award choice, regardless of whether other reviewers or even the GCE team agrees with the assessment.

Running parallel to this process, the panel of topic experts also reviews the applications. This panel augments the innovation panel and focuses on which approaches seem most promising and feasible. Then the GCE staff and topical leader take the input of the topic expert panel, the innovation panel’s silver awards, and their own judgment to complete the list of awardees.

At this stage as well, the GCE doesn’t require consensus. In fact, the GCE often looks for proposals that have “bimodal” support—they are loved by some reviewers and hated by others. The GCE team has found that supporting such ideas often leads to more learning and more innovative outcomes than selecting ones that are generally agreed upon, but have lukewarm support.

After a legal and administrative check, the grants are processed, and teams receive 18 months and $100,000 to test their ideas. During the phase I period, the foundation remains at arm’s length, allowing researchers the space to test their ideas. It doesn’t require detailed reporting or evaluation, just a final grant narrative that focuses on what the researcher learned. In addition, the grant recipients can claim any intellectual property discovered, though they must agree that discoveries are “created and managed so that they are available and affordable to people most in need in the developing world.”¹⁰

This freedom is largely welcomed by grantees. “They essentially give you the money and let you work with it,” noted one recipient, which he said contrasted with other, more burdensome foundation grants that he had previously received.¹¹

After the 18-month exploration window, grantees have the option to apply for additional, larger phase II funding of up to $1 million. During this phase, the program team at the foundation plays a more central role by helping to shape the project and hone in on what metrics will be important to track. Ultimately, the program area reviews the phase II application and decides whether to move forward with the project.

Funds to explore a crazy idea

“I had this crazy idea,” explains Miguel Prudêncio, a Portuguese researcher who received a GCE grant to explore a new approach to preventing malaria.

“Rats and mice get malaria—not just humans,” he explains, “but it is a slightly different form of the parasite.” He goes on to describe his idea of injecting humans with the safe, rodent form of the parasite in hopes of eliciting an immune response. Could the human immune system’s response against the rodent form of malaria ward off the deadly human version? That question remained in the back of Prudêncio’s mind for years as he worked as a researcher at Instituto de Medicina Molecular in Portugal. He notes, “I knew it was a high-risk, high-reward idea, and I wasn’t sure that anyone would fund it. If it weren’t for the GCE program, it would still be an idea.”¹²

Prudêncio’s idea proved to be promising during phase I of the GCE program and was awarded phase II funding. He continues to explore this discovery with hopes of creating a truly effective vaccine against malaria.

Applying the GCE model outside of Gates

One of the key successes of the GCE model is how it has been adapted to fit a range of needs. For instance, the Canadian Institute of Health Research partners with the GCE program to cofund phase II Canadian researchers, allowing the institute to benefit from the program’s robust sourcing and selection processes while also narrowing its scope to the work of Canadians.

Grand Challenges Canada, a separate organization that is funded by the Canadian government, furthers Canada’s global aid interests by cofunding phase II researchers from select low- and middle- income countries. More recently, Grand Challenges Canada created the Stars in Global Health program, which is modeled on the GCE challenge model, though with several important tweaks. To further Canadian interests, only applicants from certain countries are invited to submit applications, ideas must be more market-based, and typically the program looks for ideas that are slightly further along in their development.¹³

In New Delhi, India, the nonprofit research park IKP also runs a modified version of the GCE program. In a new pilot, IKP partners with the GCE program to run an independent application and review process for applicants in India. Recognizing that some Indian researchers need more support after they have been selected, IKP augments the GCE funding with mentorship, access to technical consulting, networking opportunities, and access to lab facilities.¹⁴ In addition to providing funding, GCE’s partnership with IKP also highlights how it is possible to create a community of researchers and mentors around a key challenge area.

At its core, the GCE model is a way to draw diverse and nontraditional problem solvers into an underserved area of global health and development. But the model’s use in places such as India, Canada, Brazil, and parts of the US government (such as USAID) shows that it can be adapted to fit a wide range of needs. For funders that can clearly identify an area of need in an issue they care about, create a challenge that will inspire diverse problem solvers to respond, and help successful ideas continue onward, the GCE model can be a promising way to reach beyond the usual suspects to find radical new ideas.

Lessons for funders

There are a great many advantages to using a challenge model like GCE’s. The approach can clearly help funders identify solutions from beyond their normal circles, bringing in unusual players and wildcard ideas from outside traditional grantmaking channels. And the broad visibility of an open call can draw much needed attention to critical issues and catalyze new activity.

In addition, the GCE team is able to collect a wealth of data about the topics, including the overall level of interest, the geographical spread of the applications, and detailed information on how the applications propose tackling the challenge. With these data, the GCE team can map an emerging field, deduce where pockets of innovation may lie, and use this knowledge to shape future efforts.

Despite these benefits, the challenge model isn't right for all funders or all circumstances.

Another benefit of the GCE approach is cross-pollination—bringing in problem solvers with diverse backgrounds to work on a problem with which they might have otherwise never engaged. In some cases, the challenges have served as the impetus for these problem solvers to develop their ideas and seek funding from addition sources even if they weren’t selected.

Despite these benefits, the challenge model isn’t right for all funders or all circumstances.

For example, challenges seem to be best suited to specific types of problems—most often those with clear, known causes or those in search of more technical or scientific solutions. Clearly and crisply defining a challenge for more complex social issues such as educational underperformance and entrenched poverty can be difficult. And even on issues that are well suited for a challenge, it can take a significant amount of work to structure a good call, requiring deep thinking and effort to define the problem in a way that produces the right types of solutions.

Others question whether challenges are as efficient an approach for surfacing new ideas as other sourcing strategies, such as creating deliberate networks to identify new ideas, hosting generative convenings, or supporting social innovation labs. While they can attract a great many submissions, there is no guarantee that the ideas that come in will necessarily be innovative or have the potential to create real breakthroughs.

Another concern for funders is whether the challenge approaches used by large, global, established foundation like Gates will translate well for a smaller funder with more limited visibility and capacity. These funders may not have the global reach to solicit applications from hundreds of countries, the staff to manage the “idea flow” from a competition, or the resources to fund several six-figure experiments while also providing follow-on funding for successful efforts. However, several key partnerships in countries such as Canada, India, and Brazil suggest that the model can be adapted to suit different needs.

Regardless of whether a funder wishes to adopt a challenge model, the GCE program can offer several important lessons for funders interested in pursuing breakthrough innovation:

Understand benefits beyond the breakthroughs. For funders considering innovation in a structured way, it’s often not enough to commit large amounts of money and then just hope for a breakthrough. Instead, funders may want to consider the interim or ancillary benefits that accrue not only to the funder, but also to others in the system. For the GCE program, such benefits include being able to map an emerging field using the data contained in applications, bringing in new problem solvers for an under-studied issue, and raising global awareness around key social issues. In the end, these ancillary benefits can add up and may ultimately be as valuable as any individual breakthrough itself.

See innovation as part of a portfolio. It can often be difficult for funders to balance a focus on innovation with support for more proven approaches that make incremental progress on key issues and problems. At the Gates Foundation, the GCE program is only one part of the foundation’s broader portfolio of work, and working with the other components of that portfolio is crucial to GCE’s success. The GCE model fosters this collaboration by bringing other program areas into the process very early on to help design the calls, select the grantees, and monitor progress. The GCE team also establishes clear funding arrangements that shifts the responsibility of follow-on funding for promising projects to the larger programs so that GCE can continue to focus on early-stage experiments. Without a clear plan for how different parts of an organization find and support innovations and the transitions between those parts, innovation efforts may not live up to their full potential.

Recognize that breakthroughs don’t happen overnight. Innovations that create fundamental change can often take years, if not decades. For some funders, this time frame is simply too long, so they instead focus on scaling ideas that have already demonstrated promise. But those funders that choose to provide early-stage capital should do so with a realistic set of expectations about the time it will take to test and scale an innovation. The GCE program itself has existed for about 10 years and, in the estimation of the Gates Foundation, has yet to hit a “home run” with any of the 1,500 projects that it has funded (to the tune of nearly a billion dollars spent)—although many promising ideas are still developing. These are sobering figures for would-be innovation funders, and it will be important for any foundation interested in innovation to think carefully about its (and its board’s) patience and tolerance for failure along the path to transformative change.

CLICK HERE TO READ ALL FIVE CASE STUDIES IN FUNDING INNOVATION