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Earlier this fall, Spring Impact, in collaboration with Impact for Breakfast, hosted an event, ‘Deploying Funding for Scale: Lessons from Investors,’ alongside British International Investment and Epic Foundation.
The conversation was focused on how investors and funders can adopt practices and mindsets that truly drive and enable impactful solutions to scale. In this blog, we distill four key takeaways from this thought-provoking event.
1. Addressing problems at scale requires a tandem approach: scaling up solutions and changing the system.
A foundational concept that emerged during the event was a shared definition of scale, one that revolves around closing the gap between social or environmental problems and the existing solutions to address them. Achieving scale can be approached from two angles: changing the system to reduce the size of the problem or scaling up solutions to better match the magnitude of the problem. It was widely acknowledged that, in most cases, both strategies must work in tandem to effectively address complex challenges.
2. Donors and investors must create a safe space for vulnerability.
Whilst there is an interesting and well-documented debate about how successful and equitable co-creation between donors and grantees can be achieved within a truly trust-based relationship (as shared by Charityvest and Headwaters Foundation), it was agreed that trust-based funding is a delicate balancing act that requires a harmonious blend of trust and collaboration.
3. Collaboration between funders is crucial, but we must find ways to break down the barriers.
Whilst competition might be an advantage for impact investors, within the philanthropic world, collaboration is key. Most funders seem to know and acknowledge this. But too little is understood about the barriers to achieving effective collaboration.
Participants shared ideas on what is creating barriers: pressure for attribution of impact, funders needing to see their distinct contribution; funders having specific sectoral focuses based on their own mission, therefore not having the impetus to collaborate with funders working in an adjacent space.
4. Bilateral or multilateral aid, and government funding, may be the only long-term funding models available to sustain non-profitable solutions at scale.
Market-based funding is widely seen as the truly sustainable option for funding solutions at scale, with customers or clients paying for the solution. However, participants highlighted that some solutions for stubborn problems affecting the environment or the most disadvantaged communities may never find a private sector funding stream. Stubborn problems will also take a long time to address.
Read the full article about deploying funding at the Center for Effective Philanthropy.