Buying social change?

Venkat Krishnan

Why, asks Caroline Hartnell, do social justice organizations so often lose out on funding opportunities? Her hypothesis is that donor conservativeness and the difficulty of measuring social justice work contribute to this. But how about asking a different question: ‘Why do donors give in general, and why do they give less to social justice organizations in particular?’

A better understanding of the ‘philanthropy marketplace’, together with a willingness to start creating ‘interim milestones’ to measure progress, could help social justice organizations to access the funds they need.

Let’s answer the first part first. My hypothesis is that people give because they want their contribution to ‘make a difference’. If they give out of guilt, they still want their contribution to reduce the inequity that made them feel guilty in the first place. Almost never do people give for the sake of giving.

Now, if people give in order to ‘make a difference’ or, to put it in more economic terms, to ‘buy social change’, isn’t it natural that they will want to know how much difference or social change their money can buy? Let’s set aside for the moment the question ‘can this be done?’ Assuming it can (and we will come back to this later), wouldn’t any decent donor want to compare several donation options and see which one gives the greatest social returns? Indeed, shouldn’t we expect all donors to try to maximize the social returns on their donations?

The philanthropy marketplace

So what kind of donors are there in the philanthropy ‘marketplace’, and what are their key characteristics? I see three main types of donor:

  • The ‘low-risk’ donors, who want to invest in options that offer low-risk, assured returns. Typically, ‘retail’ donors (individuals giving small amounts), family foundations and some corporations[1] would fall into this category. They are most likely to support service delivery organizations (eg soup kitchens and orphanages). The ‘return’ on a dollar invested may not compare to that of, say, advocacy, but these donors are happy with that. Philanthropy exchanges (eg GiveIndia, GlobalGiving), being targeted at retail donors, will tend to largely meet these needs.
  • The ‘new philanthropy’ or ‘measurement’ donors, who are willing to take higher risks for higher returns. These include venture philanthropists and impatient individual donors, as well as some slightly bolder corporations. Innovative approaches like GlobalGiving’s recent ‘online competition’ also fall in this category.[2] These donors would like to ‘derisk’ their investment by defining interim milestones of progress and checking to see if they are being met. They will also want to estimate the ‘likely social return’ on their investment upfront.
  • The ‘balance sheet’ or ‘mature’ donors, who are willing to support an organization or a cause without intense tracking or involvement, because they believe that the organization or cause is the right one to back, and because they don’t believe that everything can be measured. Large foundations, aid agencies and bilateral/UN agencies tend to fall into this category. These organizations will often provide much-needed unrestricted funding. This can also come from fundraising from the class or group whose rights the organization is fighting for.

 

I would argue that social justice organizations would do well to look at their work, work out which class of donors might find which aspects of their work interesting, and then try to get themselves funded accordingly.

Let’s take the analogy of filling a jar with small rocks, pebbles and sand. If you want to pack the jar completely, you’d always put in the rocks first, the pebbles next (to fill in some of the gaps left by the rocks) and the sand last (to squeeze into and fill in all the gaps). For social justice organizations, ‘new philanthropy’ donors provide the rocks, because they’re willing to put in large sums under the right conditions (ie to support measurable projects). ‘Low-risk’ donors provide the pebbles, ‘pellets of funding’, if you will, for predefined activities with direct short-term outputs, and the ‘balance sheet’ donors provide the sand, which can be used to fill unmet funding gaps or to meet expenses that no one else is willing to cover.

Can’t these characteristics be changed? Can’t individuals be educated to understand the importance of advocacy? Of course they can. But it requires a huge advocacy effort of its own, and that is the subject of another article.

Can you measure social justice work?

But if the ‘new philanthropy’ donors are looking for ‘measurement’, we’re back to the question of whether social justice work can be measured.

Sure, one has to allow that it is particularly difficult to ‘measure’ the impact of this work. Because of the difficulty of correlating cause and effect (can a social change be attributed to the work of any one particular organization?), and because of the long lead time for impact to be ‘visible’, some aspects of social justice work require ‘mature’ funding, ie money from people or organizations who are not looking for quick results.

But it is wrong to assume that the impact can’t be measured at all. In fact, many good social justice organizations do measure and report the impact of their work in terms of changes in certain metrics (percentage of children getting access to public schooling, percentage representation of weaker sections in elected bodies, etc). But most don’t.

Yet, even for purposes of its own self-assessment, won’t a social justice organization need to use some objective, measurable metrics to check whether or not it’s on course? Going purely by the judgements of your own staff or hired ‘experts’ (all of whom can depend significantly on the organization’s continued existence for their own livelihood) is fraught with danger. It’s like being the judge, jury and advocate.

I would argue that social justice organizations need to start to create ‘interim milestones’ for their work, finding ways to share its short-term impact. They can then turn to the ‘new philanthropy’ vehicles to raise money. They might even be able to appeal to the ‘low-risk’ donors. For instance, I think a social justice organization would be able to raise money through a website like http://www.giveindia.org if it were to say, ‘Donate US$xx to support rights training for the women of one village’, and if this appeal were accompanied by:

  • case studies of how people claimed their rights in a particular village and what benefits accrued as a result;
  • a cost breakdown showing what effort is required to get people to understand and fight for their rights;
  • very rough ‘likelihood of success’ measures.

 

Likewise, an organization fighting to get a particular law passed could define interim milestones of ‘levels of support’ that it will aim to achieve at various stages. Such milestones will also help the organization itself track whether it is on course to make the difference it seeks to make.

Most ‘low risk’ philanthropy is targeted at expanding the market, ie creating a new class of givers out of non-givers. But by taking steps such as those outlined above, social justice organizations will be able to use ‘low-risk’ philanthropy vehicles such as internet marketplaces, whose mechanisms will be focused on meeting the needs of these new donors, to educate donors gradually and take them up the learning curve towards becoming ‘mature’ donors.

However, social justice organizations don’t seem to be willing to do this yet. Most of them find it easier to raise funds through approaches such as child sponsorship. Maybe it’s time they started reassessing their approach …

1 Corporations also face shareholder pressure to justify donations, and the corporate world thinks in terms of quarters, leave alone years and decades.

2 Several projects vied online in this event to attract $100,000 in funding, with projects being shortlisted by public votes.

Venkat Krishnan N is the Executive Director of GIVE Foundation. He can be contacted at venkat@givefoundation.org


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