The index we really need
We've been measuring philanthropic giving for decades. There are several directories and annual tallies of American charitable giving.
For about the last decade, the impact investing movement has been trying to establish definitions, baselines, and annual measurements. It's a work in progress, but they're getting there.
All kinds of groups monitor and measure spending on political campaigns, including the money (expected to be in the billions of dollars for 2016 Presidential election) that flows through organizations registered in the nonprofit code (C4s, C5s, C6s).
We also spend a lot on consumer goods that make us feel good - buying things because we think the product manufacturers give back. Call it cause marketing or embedded giving - it's a significant practice. This is the least well-measured of all of the above practices.
And, now there's also crowdfunding - some percentage of which is people putting their money behind projects with a social or public purpose. This space is still emerging, as are those who want to measure it (and make sure the data are made publicly available)
For every dollar an individual chooses to donate to a social or public purpose, she has to make one of these choices: donate, invest, political support, shop, crowdfund. This the universe of choices we face for all the private resources we want to put to public benefit.
There's a lot of information about this behavior that would be helpful. What type of dollar allocation "works" best for what kind of change/outcome? Are these choices complementary or exclusionary? Are people shifting from one choice to another?
We can't get to any of those questions until we first recognize that this is the world we live in, and start counting the dollars in each of these buckets. This we can do. We have data - not great, but something to start with - in each bucket. We should come together and create a unified index that brings the different strands together. Mark the baseline now.
Then we can have a meaningful discussion for the 21st century over how people use their private money for public benefit.
Donors will be to see their choices better and make better decisions. Philanthropy advisers, like Jamie Forbes of Opus Advisors with whom I was discussing this idea, can better help the hundreds of thousands of families whose money makes up all this revenue make more meaningful choices.
The social economy that relies on this funding will be seen as the sum of its parts, not just the components. It, too, is not monolithic - it includes charitable nonprofits, social businesses, co-ops, networks, online alliances, and new enterprises that are just coming into being. It looks like this:
This framework of the social economy has been the basis of the Blueprint series for the last six years. Most people I talk to now see this world, all around them. It's time we came together and measured and reported on what's really happening. We need this new index. The data are out there - let's make it happen.
(Cup of coffee on me to whoever comes up with catchiest name for it....)
Personal wealth coach, philanthropic advisor to families and nonprofits. Start-up entrepreneur with Fortune 500 & non-profit experience. DAFs, Foundations, Family Office. CAP? AEP?
9 年Nice idea!
Founder & CEO, Altruist Partners
9 年Brilliant idea. Love it. If you need a name, just call it what it is: "Social Investment Performance Index." But before you hire a branding firm, how do you get around the monstrous methodological and technical difficulties in maintaining any semblance of accuracy? How do you account for the huge performance variance within each domain? Furthermore, what if there's a disruption in any one of these spaces? They happen all the time, and they would demand a full index reset. For example-- forgive me if I'm self-referential here-- my firm has a proven formula for leveraging charitable giving 20x over current methods. If we scale-- and we are trying our darndest-- it would magnify the power of charitable giving far past the other spaces, as it would ameliorate an entire set of financial and performance constraints on a $1.5 trillion dollar sector. Seems like this index would be in constant flux. Not to say it's not a worthwhile challenge. The folks at Tableau would probably love to help you start the dashboard...
CEO & NFP Income specialist with a focus on leadership and strategy to create change for good
9 年Effective Giving Index ... If you see my company name you may think this self serving but my naming of the company was to try to reflect some similar (not exactly) thinking
CEO at M-Kojadi
9 年for the recycle waste production
Strategic Planning at Catapult CE and Owner, UPS
9 年Hello Lucy, this quote from your post; "What type of dollar allocation "works" best for what kind of change/outcome?" is most intriguing (at least to me), it comes closest to defining an index that integrates/connects investor and beneficiary views of impact.