Living in the age of the ‘impact enlightenment’

 

Brian Walsh

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During the 18th century Enlightenment in Europe, scientific rigor – with evidenced-based explorations for how the world worked – challenged superstitious beliefs. Reason, not tradition, came to dominate as the primary source of authority and legitimacy. This caused an explosion in the production of knowledge, with incredible insights discovered across a wide range of fields.

Today, in these early decades of the 21st century, I believe we are in the midst of a new epoch generating new knowledge and insights, especially among those seeking to advance the common good.  From governments tying payment for services to evidenced-based policies and successful outcomes, to institutional investors incorporating environmental and social considerations into their analyses of the enterprises and projects in which they invest, to nonprofits conducting rigorous evaluations of their interventions, we are in era that I call the ‘Impact Enlightenment.’

The opportunity to generate, share, and use data to make informed decisions has never been greater. We are benefiting from an explosion of digital technologies, distributed networks, big data (along with small and medium data), and global communication tools which enable real-time collaboration. Combined with advances in behavioral economics – the understanding that we humans are not merely utility-maximizing rational actors, but rather multidimensional decision-makers who operate inside of complex systems – and it is no wonder we are seeing so much innovation in the social sector. We are in an era of pay for success contracts, inclusive capitalism, impact investing, social enterprise, effective philanthropy, and data-driven decision-making.

The Fund for Shared Insight is an example of this transformation. We created the Fund for Shared Insight—a funder collaborative with diverse support from 30 different funders—to increase foundation openness. The more than 80,000 foundations in the US have nearly $800 billion in endowment assets and deploy approximately $45 billion annually in the form of grants to nonprofit organizations. More than this financial capital, foundations have significant knowledge capital: information about the communities and issues they fund. We hope to tap into this knowledge capital in the hope of adding to our collective knowledge of how we might advance the common good.

We believe that if foundations are more open—which we define as how they share about their goals and strategies; share about how they make decisions and measure progress; listen and engage in dialogue with others; act on what they hear; and share what they themselves have learned—they will be more effective. We believe that in today’s complex, connected world, greater openness among foundations, the nonprofits that they support, and the people that both nonprofits and foundations want to help, will lead to better outcomes.

We currently have an open request for proposals (RFP) to fund up to $2 million in new or existing efforts to increase foundation openness among staffed foundations in the United States. The deadline is Friday May 20th, and full details can be found here and FAQ can be found here.

The outcomes we would like to see as a result of increasing and sustaining foundation openness in service of effectiveness include:

More foundations sharing out and engaging in dialogue with nonprofits, other foundations, and others about what has worked, what hasn’t worked, and/or how foundations assess their own work.

More foundations routinely engaging in high-quality feedback loops to better understand and consider the perspectives of the people they seek to help. By this we mean more foundations listening to feedback from grantees and the people they seek to help, as appropriate, acting on the feedback they hear, and, where practical, ‘closing the loop’ by engaging in dialogue with those who provided feedback and the grantees who may have been partners in collecting that feedback.

Bringing high quality feedback loops to institutional philanthropy and working to make foundations more open in sharing what they know will not solve all of the world’s problems, nor even all of philanthropy’s problems. But we are hopeful that we are building on positive momentum across the entire social sector. We believe that more data and information will lead to keener insights and deeper understandings. By tapping into the knowledge capital that sits within foundations, all of us will be equipped to make better decisions. I urge us all to reflect on the role we might each play to contribute to this new Impact Enlightenment, whereby we make progress based on evidence and not merely convention, and we are guided by reason and not just lore.

 

Brian Walsh is head of impact at Liquidnet.


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