Large philanthropic money moves to organizations that can take large philanthropic money. Everything else about grant making is downstream of that.
In August, I wrote on ICTworks that the new AI philanthropies had not yet learned our habits and could still be persuaded to fund differently. The OpenAI Foundation sounds persuadable. On August 13, Anna Makanju wrote that organizations providing critical local services have historically been among the last to benefit from new technology, and that “we should not allow that pattern to repeat with AI.”
I had the mechanism wrong. Advocacy is not the binding constraint. Absorption is.
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First AI Grants Went to Capacitated Organizations
On September 10, the OpenAI Foundation committed $60 million to AI weather and crop-disease forecasting for 100 million smallholder farmers across South and Southeast Asia and East Africa over three years. Six organizations share it:
- University of Chicago,
- Precision Development,
- UC Berkeley,
- AIM for Scale (via University of Notre Dame),
- Digital Green,
- CIMMYT.
Three of the six agreements sit with American universities. Precision Development was co-founded by Michael Kremer, who also directs the University of Chicago’s Development Innovation Lab.
Every one of those six can take a multimillion-dollar wire this quarter. They hold the tax status, the audited financials, the indirect cost rates, the insurance, and the grants office that a funder’s legal team requires before money moves.
The health commitments show the same selection.
- In April, the Foundation committed more than $100 million across six US research institutions for Alzheimer’s.
- In August, it gave $100 million to the Common Health Coalition for AI that helps care teams reconnect hepatitis C patients who fell out of care, starting in Alabama, Illinois, Louisiana, and Massachusetts.
- In September, it launched Public Data for Health with more than $125 million.
Of roughly $435 million in OpenAI Foundation program commitments this year, $60 million targets low- and middle-income countries, and no named health grantee is based outside the United States.
The hepatitis C work is a community health workflow. Finding patients lost to follow-up and directing scarce staff time is what frontline programs in Kenya and Nepal have done on phones for decades. Those programs did not lose a competition. They were never in the pool, because the money needed a US counterparty.
The Pipe Is Older Than the AI Money
None of this started with OpenAI.
The Council on Foundations and Candid analyzed US foundation grants from 2016 to 2019 and found 39% of global grant dollars reached non-US recipients, with about 13% of dollars intended for international causes going to organizations registered where the work happens.
By my subtraction, about 61% stayed with US-based recipients.
Anyone who watched the last technology fortune enter global agriculture saw the same shape. When the advocacy group GRAIN analyzed that foundation’s food and agriculture grants from 2003 to 2020, it found almost half went to CGIAR, AGRA, the African Agricultural Technology Foundation, and large international bodies.
Of the money reaching hundreds of other recipients, 82% went to groups based in North America and Europe, and under 10% to groups based in Africa. GRAIN opposes that foundation’s approach, and the categories are theirs, so weigh it accordingly.
Two decades, two fortunes, one result. The constant is the receiving infrastructure.
Absorption Is a Capability, Not a Virtue
On August 20, the OpenAI Foundation said much of the organization is still left to build.
That means a program officer with $1 billion to move and a small team has a brutal arithmetic problem. A team in that position writes $10 million checks, because 100 checks of $100,000 need 100 due diligence files, 100 audits, and 100 reporting relationships.
Absorption means a grantee can take $10 million without breaking:
- legal standing the funder’s counsel recognizes,
- financials in a format the funder’s auditors read,
- the hiring pipeline to triple a team in 18 months,
- the governance to survive the scrutiny that follows.
A Nairobi-registered NGO running on $2 million a year may do better work and still fail that test on every line. That is a gap in sector infrastructure, and infrastructure can be built.
Coefficient Giving Is Building Capacity on Purpose
Coefficient Giving named the problem and is funding the answer.
On September 8, Otis Reid and James Snowden wrote that the organization is accelerating its global health spending to build capacity for a much larger future wave, because the best opportunities cannot scale overnight and organizations need time to hire, expand, and build infrastructure.
The instrument is Launchpad Funds, a request for proposals that offers $200,000 to $10 million in pre-seed money to develop a new fund, and $10 million to $50 million or more to launch one at scale. Coefficient says it weights each proposal by its potential to absorb $100 million or more from other funders over the next several years.
That is a grantmaker paying to create organizations that can receive money it has not yet raised.
The same logic runs through the $165 million Health Aid Transition Fund, announced September 18, which builds on about $18 million in earlier grants. One stated aim is helping governments select local partners to take over from international contractors, alongside work on budget absorption, where the fund’s own materials note that low- and middle-income countries underspend health budgets by an average of 13%.
The open question is who ends up leading the funds this seeds. The RFP sets no geographic limit I could find, and the pre-seed track is small enough for an organization outside the US to pursue. If the general managers all turn out to be in Boston and London, the capacity gets built in the same place it already sits.
What the Sector Should Build Now
I would like to see three things:
- Pooled funders capitalize regional receiving funds, registered and governed in Nairobi, Delhi, Dakar, or Jakarta, each run by a manager accountable for an outcome and sized to absorb $100 million. Coefficient’s pre-seed track pays for exactly this kind of design work, and nobody has to invent the vehicle from scratch.
- Intermediaries already holding large grants publishing the share of each grant that reaches locally registered organizations and the date it arrived. That number is the sector’s only honest measure of whether the pipe is changing.
- Funders writing new AI eligibility rules stating plainly whether equivalency determination is available and what it costs an applicant, so an organization in Kathmandu learns in two minutes whether applying is worth two weeks.
The next wave of AI money will go wherever it can be absorbed in 90 days. Build the thing that can take it.
