Delaware Valley Grantmakers (DVG) is Greater Philadelphia’s regional association of funders. As a membership organization DVG is dedicated to advancing the most effective practice of philanthropy in the region. Founded in 1988 and 150 members strong, DVG represents a wide variety of grantmakers, giving interests, and funding approaches. Because of this reach, the Journal asked Debra Kahn, Executive Director of DVG, to share her views on the topic of impact. High on the list of concerns of its members, Debra reminds us, is a focus on impact that is hardly new; foundations and donors of all types have increasingly embraced a focus on more strategic, outcome-oriented philanthropy. To this end, Debra shares with us some critical takeaways when undertaking the process of assessing and achieving social impact. She also provides some worthwhile resources to use in exploring and better understanding initiatives concerned with impact in our region and across the nation.
It’s All About Impact
Leaders of local foundations and other grantmaking organizations of every type and size have one major question on their minds: ”Are we making an impact with our philanthropic dollars?” In a recent survey of the nearly 150 members of Delaware Valley Grantmakers (DVG), funders named as top concerns evaluating the impact of their grantmaking and the performance and outcomes of grantees (see Figure 1).
Figure 1: Top Interests for DVG Members*
This focus is hardly limited to philanthropists in our region. Even the responders to the Giving Pledge, the initiative spearheaded by Bill Gates and Warren Buffett to recruit billionaires to commit at least half of their fortunes to charitable causes, are now holding meetings to explore ways to collaborate and make sure their philanthropy represents not only big dollars, but big impact. (www.thegivingpledge.org) National philanthropic consultants and support organizations produce scores of books and blogs, studies and workshops, targeted at achieving impact through philanthropy.
The focus on “making a difference” is not new. Spurred by the enormous wealth creation of the 1990s, a new generation of “venture philanthropists”—many of whom were young high-tech entrepreneurs—began applying an investment mindset to their giving, looking for social “returns.” Throughout the past decade, this focus on more strategic, outcome-oriented philanthropy continued to gain traction and has been increasingly embraced by foundations and donors of all types. In recent years, the emphasis on impact has been heightened by a shortage of both public and private funds in the face of stubborn problems that plague a complex region, nation, and world. So we should consider it good news that grantmakers want to zero in on the practices and actions that are likely to lead to the best results. The path forward, however, is rarely straight, and it can be bumpy, too.
One obstacle is that “impact” likely has different meanings for different funders. For the purposes of this article, philanthropic “impact” is either accomplishing the positive social effect intended by a grant, or realizing an unintended but favorable result for the targeted issue. Too often, however, impact is in the eye of the beholder, with no identification of precise, shared objectives against which to measure. Another difficulty, even if the aims are crystal clear, is assigning contribution “credit” to a single grant when nonprofit organizations and projects typically have multiple backers. Moreover, funders and grantees rarely control all of the variables that determine whether or not a grant has the desired effect, and teasing those out can be tricky. Finally, funders typically have broad portfolios, investing in a wide range of subjects through different types of grants and other supports, so assessing impact with precision can be complicated and time-consuming.
Fortunately, none of these factors are complete barriers to achieving real impact. This edition (and all others) of the Philadelphia Social Innovations Journal is chock-full of stories and examples of philanthropy investing in nonprofits and other organizations to make real progress in designing and implementing solutions to social issues. A growing body of literature from individuals and organizations informs and advises foundations and other philanthropies about practices to achieve more impact. At the risk of over-simplifying, here are some critical takeaways from the experience of undertaking the difficult process of assessing and achieving social impact through philanthropy:
- Impact starts at the beginning. It requires intentionality, strategy, focus, and an upfront commitment to defining a desired outcome and figuring out ways to measure it.
- Impact is not a solo enterprise. Individual leadership is essential, but it takes many operators from all sectors working and contributing together to get significant results. One aspect of working together involves seeing the situation from another point of view. For example, a nonprofit might think that it could have more impact with a different type of funding than it is currently receiving (e.g., general operating rather than project support, better capitalization). Sharing the effort and perspective is a winning combination.
- Impact is about learning and action. Every experience is a learning opportunity, and in the case of pursuing impact, the learning is best shared to broaden the progress toward impact. This learning is not purely academic, but needs to be continuously applied for maximum effect.
- Impact will be preceded by failure. In the face of big societal challenges, it is neither practical nor fair to expect that funders or nonprofit leaders always will get it right the first time. The key is to have some risk tolerance, learn from experience, and try again.
- Impact takes time. The bigger and bolder the dream, the longer it will take to realize. Progress benchmarks can be noted along the route, but patience, realism, flexibility, and a sustained attention span are all required.
- Impact requires practice changes. Different changes will be needed by different organizations, but chances are pretty good that every organization needs to change something about how and what it does. Otherwise, we forfeit our right to complain when the “other guy” doesn’t realize the big results we want to see.
- Impact is its own reward. Achieving a goal that creates opportunity and improves quality of life feels great. It is why people work professionally and personally in philanthropy. That alone is reason enough to pursue impact with intelligence and energy.
Here are some useful current resources, many containing “on the ground” stories about achieving impact:
- Grantmakers for Effective Organizations—Evaluation in Philanthropy: Perspectives from the Field (2009) and the brand new Four Essentials for Evaluation (June 2012) offer practical guidance and numerous examples of real funders engaging in evaluation in order to improve the effectiveness of their grantmaking. GEO also offers members access to an online “Impact Archives.” www.geofunders.org
Social Impact Exchange—The Exchange advocates taking successful innovations to scale as a means of realizing impact. Its goal is to build an efficient and reliable capital marketplace to enable scaling of high-impact nonprofit initiatives. An annual conference in New York City explores the financial, policy, and practice aspects of scaling for impact and incorporates a scaling competition. www.socialimpactexchange.org
- Social Innovation Fund—The Obama administration initiative is also premised on scaling effective community solutions to achieve impact. The SIF awards competitive federal funding (matched with local philanthropic dollars) for “promising programs” across the country. The SIF has partnered with GEO to launch Scaling What Works, a multi-year learning initiative to document and disseminate the experiences of the SIF and to build capacity and interest among grantmakers to participate in the Fund and otherwise work together with public agencies on problem-solving. http://www.nationalservice.gov/about/programs/innovation.asp and www.scalingwhatworks.org
“Collective Impact”—An article by consulting firm FSG’s John Kania and Mark Kramer published in the Winter 2011 edition of Stanford Social Innovation Review has spurred extensive conversation about the idea that no organization acting alone can solve large-scale problems. More than collaboration, collective impact is a rigorous approach requiring five conditions that together can leverage tangible social change. FSG continues to conduct research on this strategy and has created an online knowledge exchange to share tools and stories of collective impact in action. Related to the FSG work is a recent report, Needle-Moving Collaboratives: A Promising Approach to Addressing America’s Biggest Challenges, produced by the Bridgespan Group for the White House Council on Community Solutions. Philadelphia’s Project U-Turn is one of the featured collaboratives. http://www.fsg.org/tabid/191/ArticleId/211/Default.aspx?srpush=true and http://www.bridgespan.org/needle-moving-community-collaboratives.aspx
- Mission Investors Exchange—A recent merger of two related organizations (big news in itself!), More for Mission and PRI Makers Network, has produced Mission Investors Exchange as the place for foundations and other philanthropic and investment organizations to turn for information about practices, tools, and experiences for making the most of their capital beyond traditional grantmaking. These approaches may take on increasing importance with the rise of for-profit social entrepreneurism as a vehicle for ameliorating social conditions. www.missioninvestors.org
Center for High Impact Philanthropy—Located at the University of Pennsylvania, CHIP is all about collection and dissemination of information to donors who want to maximize the social impact of their funds. CHIP’s issue-based donor guides on both domestic and international topics may be especially instructive. www.impact.upenn.edu
- Books galore—Many volumes have been written to explore philanthropic impact and related topics in more depth. Some of the hottest titles now are Impact Investing: Transforming How We Make Money While Making a Difference by Antony Bugg-Levine; Leap of Reason: Managing to Outcomes in an Era of Scarcity by Mario Morino; and Give Smart: Philanthropy That Gets Results by Thomas Tierney.
These resources represent only a small slice of output from the “philanthropic infrastructure” that on a daily basis offers advice, information, techniques, and encouragement to funders and nonprofits looking to achieve the most impact. Add to this mix dozens of research reports from individual foundations and nonprofits about particular grantmaking initiatives and projects, and keeping up with it all can be daunting.
In our region, DVG plays a pivotal role in bringing this knowledge home. We share the resources, highlight the practices, present the issues, and convene the cross-sector conversations to help educate and support funders in a local context. Look for DVG to do even more that is solution-oriented and collaborative, as we focus on the needs of our community and our members’ top concern: achieving impact.