What is Giving Compass?
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Giving Compass' Take:
• There are impact investing opportunities to help advance nonprofit organizations in the global health sector, specifically in research and development work, as well as product development partnerships.
• What are the potential opportunities for global health to flourish through these types of investments?
• Read about how you can make an impact on global health.
The fundraising climate for nonprofits is often challenging due to struggles like donor fatigue, growing competition for the same resources, and limited funding as government and philanthropic contributions stagnate or decline.
There may be more potential for investing in nonprofit organizations than meets the eye.
The convergence of these two trends has led many nonprofits to consider impact investing as a sustainable financing alternative—although in many cases, nonprofits do not make for natural or ready investment candidates.
Put simply, most are not structurally or culturally set up to receive return-seeking investment, nor do they have the resources or networks to pursue it.
And while not every organization or intervention will lend itself to pursuing return-seeking capital, our research shows that, under the right circumstances, a reliable source of revenue, thoughtful design, sufficient resources, and an organizational commitment to explore new funding strategies can make the unlikely possible.
Organizations need to sharpen the rationale for return-seeking capital, making a strong, clear case for investment to outside investors. In addition, it is important to pull together the data, research, and precedents that reveal the potential of the proposed deal.
It is essential to determine the necessary (and typically considerable) resources to support both the revenue-generating activities and the systems and processes for managing return-seeking capital, while ensuring that the organization’s other work can continue without disruption.
Consulting with internal and external stakeholders about concerns they may have, as well as potential risks or conflicts of interest, will streamline negotiations with investors.
Impact investing has already helped catalyze innovations and solutions in historically donor-funded sectors like microfinance and the social enterprise market in the United Kingdom.
Read the full article about impact investing in global health by Amy Bell & Mỹ Lệ Thi Goel at Stanford Social Innovation Review.