High impact philanthropy
Encyclopedia
High impact philanthropy is the practice of making charitable contributions with the intention of maximizing social good. The aim is to make the biggest difference possible given the amount of capital invested. Philanthropists who give in this way are less interested that their dollars go to a particular organization and more concerned that what they invest yields a result in an area of particular interest to them.
Donors seeking to achieve a high impact with their dollars typically attempt to understand the context of the area in which they wish to give as well as the goals towards which they should be contributing. In addition, they ask how success will be measured and how much change costs. A number of organizations have sought to establish metrics for determining social impact:
High impact philanthropy differs from other types of philanthropy in that the outcome maximizes the social good of their philanthropy. Many philanthropists do not give in the attempt to maximize social good. Obligatory giving, reciprocal giving, and giving for notoriety may not be high impact because the emphasis is not consciously centered on social outcomes. “Good intentions and generosity are not sufficient in practice and they ought not to be in philanthropy,” according to Richard Gelles, Dean of the School of Social Policy & Practice at the University of Pennsylvania.
Current practice
High impact philanthropy begins with a philanthropist’s personal commitment to making a change in the world and caring enough about a particular issue to remain engaged in the long-term and focused on best practices that make a difference. The resources that a philanthropist then gives are directed towards efforts that bring the desired positive change to fruition. The result might be getting one more student to graduate from high school on time or ensuring that an additional child receives treatment for malaria in time to save their life.Donors seeking to achieve a high impact with their dollars typically attempt to understand the context of the area in which they wish to give as well as the goals towards which they should be contributing. In addition, they ask how success will be measured and how much change costs. A number of organizations have sought to establish metrics for determining social impact:
- Center for High Impact Philanthropy’s cost-per-impact, a “back of the envelope” estimate that links desired outcomes to costs of delivering a program
- Acumen FundAcumen FundAcumen Fund is a non-profit global venture fund that uses entrepreneurial approaches to solve the problems of global poverty. Its aim is to help build financially sustainable and scalable organizations that deliver affordable critical goods and services that improve the lives of the poor...
’s best available charitable options (BACO) analysis which compares net outputs over the time of an investment with the best charitable option - Robin Hood FoundationRobin Hood FoundationThe Robin Hood Foundation is a charitable organization, which attempts to alleviate problems caused by poverty in New York, United States.-History:Founded in 1988, Robin Hood was the brainchild of hedge fund manager Paul Tudor Jones...
’s monetization approach that converts impact into dollars - Back of the Envelope Guide to Philanthropy's Leverage Factor approach which is a rough monetization scheme.
- REDF’s Social Return on InvestmentSocial Return on InvestmentSocial Return on Investment is a principles-based method for measuring extra-financial value relative to resources invested...
(SROI)
High impact philanthropy differs from other types of philanthropy in that the outcome maximizes the social good of their philanthropy. Many philanthropists do not give in the attempt to maximize social good. Obligatory giving, reciprocal giving, and giving for notoriety may not be high impact because the emphasis is not consciously centered on social outcomes. “Good intentions and generosity are not sufficient in practice and they ought not to be in philanthropy,” according to Richard Gelles, Dean of the School of Social Policy & Practice at the University of Pennsylvania.
See also
- Effective givingEffective giving- Principles behind the effective giving movement :* Be confident that your donation will be used effectively. By relying on recommendations of where to give that are based on high-quality evidence about what works, you can be confident your donation will be well-used.* Change incentives for...
- Non-profit organizationNon-profit organizationNonprofit organization is neither a legal nor technical definition but generally refers to an organization that uses surplus revenues to achieve its goals, rather than distributing them as profit or dividends...
- PhilanthropyPhilanthropyPhilanthropy etymologically means "the love of humanity"—love in the sense of caring for, nourishing, developing, or enhancing; humanity in the sense of "what it is to be human," or "human potential." In modern practical terms, it is "private initiatives for public good, focusing on quality of...
- Social entrepreneurshipSocial entrepreneurshipSocial entrepreneurship is the work of social entrepreneurs. A social entrepreneur recognizes a social problem and uses entrepreneurial principles to organize, create and manage a venture to achieve social change . While a business entrepreneur typically measures performance in profit and return, a...
- Social impactSocial impactIn business and government policy, social impact refers to how the organization's actions affect the surrounding community.See also the psychological "Social impact theory". is also the name of a service provider to NGOs and international agencies....
- Venture philanthropyVenture philanthropyVenture philanthropy, also known as philanthrocapitalism, takes concepts and techniques from venture capital finance and high technology business management and applies them to achieving philanthropic goals.Venture philanthropy is characterized by:...
Further reading
- Grace, Kay Sprinkel. High Impact Philanthropy: How Donors, Boards, and Nonprofit Organizations Can Transform Communities. New York: John Wiley & Sons, 2001.
- Tuan, Melinda. "Measuring and/or Estimating Social Value Creation: Insights Into Eight Integrated Cost Approaches." Prepared for the Bill & Melinda Gates Foundation. 15 December 2008.