The Center for Effective Philanthropy
January 1, 2020
This type of funding enables them to plan for the future, invest in their team, and focus on impactful work. In seeking an explanation for why it is not commonplace, (CEP) found that in many cases it simply had not been made a focus or priority by funders. For nonprofits, they saw it to mean funders did not trust the sector to deliver, and wanted to remain in control.
"It really does come down to not just the immediate impact of your operations, but how are you designed as a business to cope with change? What we're seeing is many businesses start to put in emissions management frameworks, and as much as anything that is a good hedge against future regular regulatory change, because your business is already ready.”
While a business committing to donate a portion of profits to achieving impact is noble, it is not a substitute or trade-off. How else can your business work for equality, and have a positive social and environmental impact through its core operations?
“We always try to authentically communicate what's worked and what hasn't. We wrote a 10 minute read about why we've switched our model on our blog, and have also taken questions on Q and A via social media. A lot of the questions were either resolved, or there was understanding on why we've done what we have.”
Providing customers with opportunities to interrogate your decision-making and understand your approach enables them to ‘identify with and feel ownership of’ the business’s purpose.
If you are changing the fundamentals of your existing giving model, be as transparent with your customers as possible. While there may be misunderstandings and criticisms, allow space for these conversations and be prepared to explain why your business is taking a different approach.
This may require further training and learning about impact evaluations and theory of change methodologies. Get to grips with what meaningful change would look like in this context. Allow room in the budget for the nonprofit to undertake reporting, and be clear on what they are measuring.