What does it mean to have IMPACT?

Published on LinkedIn Influencers on September 23, 2013

Statistics reveal that in 2012 over $316 billion was donated to charity in the United States alone. There were 120,810 private foundations in 2010 with assets of $582 billion. Philanthropy is both something we do every day in choosing to help and serve others, and it is a huge business. The business of trying to do good. With non-profit companies continuing to provide increasingly vital services, they rely mostly on the generosity of individual donors, foundations, and other grants, but with over 1.5 million non-profit organizations registered in the United States, simply donating money can be a daunting task filled with overwhelming options. That is why many foundations are increasingly hiring professional staff members to help them be effective. Staffed or not, when we asked many women who are giving at the million dollar level what they were hoping to achieve with their giving the most common answer was this. They wanted IMPACT!

This word has gained so much prominence in the world of philanthropy that Women Moving Millions decided to make it the theme of this year’s Annual Summit in New York City. I have just returned from this Summit, and a three-day journey through The Story of Impact + The Impact of Story, and I literally can’t sleep because my brain cannot stop thinking about everything that was discussed this past week. In particular, participants of the Summit looked at the concept of impact in regards to philanthropy, looking at why people give their time, treasure and talent to help others, and what they hope to achieve through this giving. We were challenged to think about how individually we might be having impact, but also how we might as a collective. Our summit opener was no other than Gloria Steinem who asked us the question “what can we together than cannot be done separately?” Then thankfully she left us with a ‘to do’ list.

When curating this unique summit we did some of our own research on what leaders in philanthropy had to saw about IMPACT but quickly recognized we needed to pull in some outside expertise. We approached the Center For High Impact Philanthropy to see if they could find a definitive definition for the term impact, and whether or not impact could be measured in terms of philanthropy. The result is a report titled What Are We Talking About When We Talk About Impact?, a summary of which can be found here, and this report served as the launching pad for our discussions this past week in New York. Almost 100 leaders in private, corporate and institutional philanthropy were present.

Drawing its information from research, expert opinion, and field experience, this report sets out to examine the many different views of impact in philanthropy, and not surprisingly, the resulting findings reveal that there are currently many different conflicting definitions of impact, as well as the actions and change needed to achieve it. While this report yielded many insights as it studied the many misunderstandings that surround the relationship between action and change, there are a couple that stand out.

One significant insight is the description of the difference between outcomes and impact, as this was the one area where the most commonality could be found among the many different opinions. By examining the publicly available materials of non-profit organizations and foundations, this report discovered that most of these mandates distinguish between the more short term and definitive outcomes, and the more long term and abstract impact when describing their philanthropy goals. Organizations often produce easily measurable outcomes, such as 100 meals served or 50 schools receiving educational materials, but the impact of these outcomes can sometimes take years to manifest. They pointed out how important it is to understand the difference between outcomes and impact, because while donors may want to achieve impact, it is an inherently human trait to respond to the more immediate outcomes. A clear example is the incredible giving that happens after natural disasters. Is responding to that need awesome and makes a huge difference? Yes of course, but what we are talking about here is a both/and. Therefore, when thinking in terms of giving, it is important to always keep the overall impact of the outcomes in mind when deciding where to donate.

Even more importantly, this report reminds us that some of the biggest social changes occur when nothing actually changes, and instead, the charitable works succeed in maintaining the status quo. This is particularly relevant today when considering the work of women’s rights advocates in fighting against the restrictive health care measures that have recently been enacted in many states. Furthermore, the report points out that when outcomes do turn out to be ineffective, this does not necessarily indicate that the action was ineffective, but rather it is often the case that the interests of donors do not necessarily fall in line with the goals of the organizations, thereby creating an unintended barrier to success.

Finally, the report describes how actions that are undertaken with the goal of positive change can sometimes produce negative change instead. Not all impact is positive! This often occurs when philanthropic organizations operate in what is described as a top down manner, meaning that the goals of the donors are pursued without any input from the intended audience or beneficiaries. Alarmingly, this has been found to be particularly true in the philanthropic area of advancing women and girls, where many organizations fail to include female voices in the conversation about how to enact positive change. The report proposes an alternative strategy, described as the bottom up approach to philanthropy (though maybe the better terms are human-rights based, respectful and inclusive, holistic and sustainable), where the designated recipients are included in all levels of planning for the intended action for change. This would result in a more efficient process of giving, and would ensure that all resources are being used to their full potential. People ask me this all the time – “Jacki, as the CEO of an community of 200 women ( and a few good men) that give at the $1 million plus level what is the common feature of their philanthropy or theory of change?” This would be it. Many give and invest with a deep and profound sensitivity to understanding the needs and wants of the people they are hoping to assist and serve. We believe that this approach is absolutely necessary for high IMPACT and is why we are creating a report that illuminates this approach and features the stories of people you are doing this to tremendous impact. (Please contact the Women Moving Millions office for more information on this.)

So what do we gain from these insights? We know that successful philanthropy is so much more than just writing a check, but have we made it too complicated? While it is important to have specific measurements to gauge whether or not our resources are being spent wisely, how do we quantify the long-term social change that we wish to enact? If anything, this report reveals that there will never be a definitive agreed upon definition of impact giving, but the report does leave us with some sound advice. It suggests that before embarking on your own personal journey of impact philanthropy, ask yourself the following three questions:

  1. What is the difference I want to make?
  2. Is this difference meaningful to the intended beneficiaries?
  3. How will I determine if I am moving in the right direction towards making that difference?

By asking yourself these questions, the report predicts that you will engage in a more meaningful and significant dialogue that will hopefully give you the tools needed to achieve your giving goals. Sounds good, right? Let’s take it one step further and allow me to make this personal.

This past week I couldn’t wait to meet Molly Melching, founder of the organization Tostan, who was coming to be speak on the last day of the WMM Summit, and one of the reason for my eagerness was due to a quote I had read from Melinda Gates, one of the most high profile philanthropists in the world. In describing the day she met Molly, Melinda says, “I have not thought the same way about the work I do at the Gates Foundation since that day.” I wondered what it was about Molly that could inspire such a reaction from Melinda Gates, and I couldn’t wait to find out. Molly’s session was this past Saturday and I now know what Melinda meant, as simply listening to this amazing woman and her theory of how to enact change has changed my life. Her theory of change is exactly what this report made reference to.

What they do is have programs that puts rural communities in Africa in charge for their own future. Their approach is human-rights based, respectful and inclusive, holistic and sustainable. The outcomes have been amazing and need to be read to be believed. What was the GAME CHANGER for me was that I so clearly saw how it is the process that is most important and leads to the outcomes. What also became additionally clear to me is how important the leadership of an organization is. In Molly’s case she is both the founder and the leader and thus I can be 100% sure that she is holding her team accountable to implementing that process. If I were to order what I think is important in choosing an organization I would list process or theory of change first, leadership and team second and indicators of success third.

So here are my revised list of questions that I am now going to use when I am in dialogue with organizations about a major gift. (And I define myself as a social change funder.) These questions are numerous, but some key ones for me are: What is the outcome this organization is hoping to achieve? How do they define success and over what time frame? What is their theory of change? Do I understand it? Does it make sense? Do I connect with and trust the leader of the organization to make it happen? Do I feel like they are trying to sell me something or have me buy into something? (hopefully the latter) I often ask them about their failures and what they have learned from them? What is your biggest challenge in doing the work that they do? After asking all of these questions, and absorbing the answers, am I excited to be jumping on board? When I ask them what I can do to help them advance their mission do they give me an honest and clear answer? Please notice that the question “what percentage of revenues go to operating expenses? is NOT ON THAT LIST AND NEVER WILL BE.” As for the gift to Molly I pledged on the spot – “She had me at hello.”

The term impact investing may have only been coined in 2007, but the idea of wanting to make a positive difference in the lives of others in this world is as old as time. Whether you are a multi-million dollar foundation, or a young child about to make your first charitable donation, everyone wants to know that their money will be put to good use. Last year, $316 billion was given in the US with the hope of creating a positive change in this world. I am not suggesting that every $1 you give should come with a million questions, but this does mean that organizations you give your money to should not have great answers to them and be held accountable for delivering against the metrics THEY THEMSELVES suggest are the right ones. Their websites and outreach materials should have clear messaging as it relates to their theories of change, their goals, their success measurement and one of the things we hope to do at Women Moving Millions over time is help to make best practices in capturing that impact available for organizations to learn from each other.

One of the long term IMPACTS of the Federal Reserve continuing to “print money” to feed economic growth is that each dollar will do less for us. Our money is being devalued. Now is the time to think deeply about how our limited resources that flow to incredible organizations doing incredible work might have the greatest impact. Though hard to define let’s trust ourselves to know it when we see it and feel it, and trust in the leadership of organizations with a thoughtful theory of change. Yes, measurement is important, but let’s not confuse what we can measure with an outcome of positive social change. At the end of day giving should give us joy and the science is now saying it does in fact do just that.

PS – I thought our summit was going to be about IMPACT but really it was all about connectedness. Connectedness is what leads to IMPACT. That will be one of my next pieces.

Join us for an ongoing conversation about impact at #WMMimpact and follow us on twitter for updates at @wommovmillions. Also and #impact.