# Philanthropists want things to become sustainable [[People like funding winners]]. If a philanthropic program doesn’t have a clear success criterion (e.g. eliminating malaria) it by default “wants” to live forever. [^1][^2] In order for an organization with that long or infinite time horizon to “win” it needs to be able to sustain operations for that whole time. However, it is (by definition?) much harder for a philanthropic program to be self-sustaining than either a self-organizing entity that doesn’t need any money (like a club) or a profit-seeking business. The moves available to them are to fund operations out of a foundation, continuously raise charity ([[Charities raise money on a yearly or sub-yearly basis]]), be absorbed into the government, or to act in some ways like a profit-seeking business. Each of these is tricky and usually orthogonal to the organization’s purpose. Even if a philanthropic venture is wildly successful, there’s no guarantee that success will translate into sustainability. Contrast this to a for-profit business, where almost by definition, success and sustainability are coupled because [[Profit makes organizations auto-catalyzing]].[^3] The tension between many philanthropic program’s long time horizons and their difficulty becoming auto-catalyzing makes it hard to believe that they will be winners! Andrew Carnegie explicitly required that organizations he funded have a plan to become self-sustainable: an agreement from a government to support a library, a university getting to a point where tuition could cover costs, etc. ([[Andrew Carnegie only funded libraries if a city agreed to fund them long term]].) Modern philanthropists are less explicit, but express the same concerns and exhibit hesitancy giving to things that don’t have a path to sustainability. This hesitance feels especially pronounced among “tech-adjacent” philanthropists because there is a cultural assumption that mission-focused [[Grahamian Startup]]s not only can fix most of the world’s problems, but are in fact the best mechanism to do that. (Of course, that perception is based in part on the fact that nominally startups will become auto-catalyzing if they are successful.) Why give money away to something with an unclear path to sustainability when you could both grow the money *and* have more impact instead? “But a philanthropist could solve this problem by setting up a foundation that would fund the organization into perpetuity.” Even the wealthiest philanthropists don’t have infinite money: setting up a foundation is generally a once-in-a-lifetime thing and takes a good chunk of their assets. The one-shot nature of foundation creation has number of consequences. Younger philanthropists will be hesitant to endow a foundation because they reasonably still want to be able to use their money as they see fit, including the option to invest and grow it. Philanthropists usually see a foundation as their legacy — they naturally want to prescribe its actions and generally start it themselves in order to maximize confidence that it is what they want. These inclinations make foundations an unreliable path to self-sustenance for most organizations. [[Philanthropists desire for funding to not be wasted explains the mismatch between the amount of money out there and new institutions ability to raise money]] While it’s frustrating for institution-builders, funders’ desire for eventual-sustainability is entirely reasonable. Figuring out better mechanisms for public-good-generating organizations to become self-sustaining ([[What if there was a clean philanthropy-to-government policy pipeline?]]) might be an important piece of solving [[§Misalignment between funders and nonprofits in research]]. ### Related * [[Most people give money to philanthropy to make themselves look and feel good]] * [[The traditional non-profit structure is a bad idea for an organization that requires a significant chunk of capital and produces uncertain results on a long timescale]] * [[Catalytic funding needs to launch into an existing ecosystem to be effective]] [^1]:[[Michael Levine concept of agency and Alex Dancos concept of purpose might both be describing systems with loops]] [^2]: Even entities that have basically done the thing they set out to do usually refuse to die. [[What if all entities had expiration dates?]], [[Most institutions have become cancerous]]. [^3]: The subtle difference I would draw between “auto-catalyzing” and “self-sustaining” is that in the former the resources to sustain the system come from the same activities that support the system’s purpose, while in the latter, the system generates the resources to sustain itself but through a “side” process that doesn’t contribute to the system’s purpose. [Web URL for this note](http://notes.benjaminreinhardt.com/Philanthropists+want+things+to+become+sustainable) [Comment on this note](http://via.hypothes.is/http://notes.benjaminreinhardt.com/Philanthropists+want+things+to+become+sustainable)