Philanthropy today is a powerful and essential contribution to the immense undertaking of development1, often bridging gaps left unaddressed by governments and multilateral agencies. Globally, philanthropists are also beginning to understand and embrace the critical role that they must play in realizing the 2030 Sustainable Development Agenda. Shouldering this responsibility means finding a way to maximize the impact of every dollar contributed. Based on The India Philanthropy Report 20182, listed below are four steps that you can take (in no particular order) to ensure that your philanthropic capital has the maximum impact, regardless of the quantum or areas of investment.
1. Gauge the Effectiveness of Your Current Giving
Determining your giving potential is a prerequisite to ensuring clarity and focus in your philanthropy. It entails an evaluation of current and projected wealth against personal requirements, savings and investments, to arrive at an understanding of the funds that you can commit to philanthropy in the years to come. For seasoned philanthropists, evaluating the performance of your philanthropy may seem like intuitive and routine steps. However, discerning how impactful or catalytic your philanthropy has been involves pointed questions: Did the grant play a pivotal role in helping the organization to scale and impact more lives? Did the grant achieve both medium and long term results?
An evaluation of philanthropic impact also mandates a closer look at the distribution of the portfolio. For instance, it is valuable to balance your portfolio between goodwill-led investments and evidence-based investments. Finally, for families in particular, reviewing the decision-making process and ensuring that it is as efficient as possible, is a good step to undertake before increasing philanthropic investment or diversifying the portfolio.
What donors say:
A portfolio review helped refine our philanthropic strategy. Specifically, it helped us recognize trends and insights into the performance of grantee organizations, the sector-wide mix of our portfolio, the number of beneficiaries reached and how our support has helped build the capacity of these organizations. Engaging a philanthropy adviser to conduct this portfolio review enhanced its rigor, professionalism and objectivity3. - Donald Lobo, CiviCRM
2. Define Your Vision for Change
An audacious vision for change is ideal, given the scale and urgency needed to address development issues. In practice, this means envisioning the most catalytic and sustainable change that can be affected through your philanthropic investments. However, the challenge then lies in balancing this audaciousness with a sharp focus on particular cause(s), geographies, types of institutions or demographic groups. An ambitious and actionable vision aims for sustainable impact in a focused area. It also broadly defines what success should look like in the short to long term, even if it does not identify specific metrics. Concluding this reflective process by clearly documenting a succinct vision statement can benefit you, your team and your partners. Research has shown that philanthropists tend to make the most sustained and successful contributions when their philanthropic vision aligns well with their motivations and convictions4. Therefore, regularly revisiting your vision for change and ensuring it is consistently guided by your inherent values, is essential to ensuring its effectiveness.
What donors say:
We don’t want to be seen as easy check writers. We would like to keep it focused. It also allows us to measure our outcomes, put goals on the tangibles and the intangibles. That’s why we have articulated what we want to do5. - Leena Dandekar, Raintree Foundation
3. Determine the Pathways to Change
With a vision for change firmly in place, a deep understanding of the problem and existing solutions is required before you can develop a well-informed strategy to achieve the vision. Immersive learning experiences, like visits to nonprofits and vulnerable communities, as well as interactions with other funders in the space, have proven helpful for philanthropists at this stage. Leveraging such insights can help you articulate a theory of change that outlines both the inputs required and the milestones that need to be achieved in order to have the desired impact on ground. Nonprofit grantees can then be selected on the basis of well thought through criteria, including but not limited to, the alignment of their program with your vision, and the quality of institutional systems and leadership. Once you have chosen your organizations, you can then determine your mode of play with each grantee, which includes decisions such as the type of grant, the period and depth of engagement, among others.
What donors say:
At the Harish & Bina Shah Foundation, we believe that conducting site visits is key to developing independent thinking, understanding the realities and needs on the ground and ultimately adopting a solution that is closely aligned with them. Our foundation team shares this view and sees these visits as transformative experiences that changed their approach to the work6. -Amira Shah Chhabra, Harish and Bina Shah Foundation
4. Amplify the Impact of Your Giving
Most givers have a restricted amount of philanthropic capital and yet increasing the quantum of your funds can only go so far in enhancing impact. Instead, philanthropists who offer nonprofits their time, skills, and experience with building institutions, make an invaluable contribution. Your relationship capital, which facilitates nonprofits’ access to your network of experts and peers, is also a valuable alternative or supplement to monetary giving7. Furthermore, sharing your philanthropic experiences can influence greater and smarter giving among your peers by helping them replicate effective practices and avoid duplication of efforts or mistakes. And finally, collaborating with other stakeholders such as state institutions, civil society or other funders can help you become a part of initiatives that are geared for greater impact and scale than those possible through individual investments alone. Each of the above will serve to deepen your engagement and trust in the sector, in addition to amplifying the overall impact of your giving.
What donors say:
As a serial entrepreneur, I have strategically mentored high-technology ventures in India through their inception, growth and eventual divestment. Over time, I began to consider how this expertise can help create catalytic growth for organizations in the nonprofit sector. With this goal in mind, I developed a Strategic Support Group (SSG), which brings together individuals who are willing to offer their time and their range of expertise, to build new capacities among nonprofits. Providing strategic support along with capital amplifies the impact of my philanthropy, enabling nonprofits to scale efficiently and effectively, and achieve better and faster outcomes8. -Dhruv Khaitan, NeoGrowth Credit
The journey of each philanthropist is unique. And the very act of giving is noble. Yet, at some stage, most philanthropists pause to question if and how their giving can go the farthest possible mile in truly impacting the lives they aspire to improve. These four steps can prove very valuable then- helping you take a step back to reflect, explore and (re-)define a form of giving that leverages your full potential to create impact at scale, in a powerful and sustainable manner.