The Water in the Balloon

Written by Stacey Burns, CI4SI CoFounder & CIO, 5/13/20

?2020 Colorado Institute for Social Impact

I remember reading an article when the ALS Water Bucket Challenge came out. The article stated that this innovative way to raise to funds had not actually generated new donors. It had only shifted them. And that giving to other organizations would likely be down because we hadn’t created more money to non-profits overall—we had merely shifted where existing donors and amounts went.

A mentor of mine called this type of effect “shifting the water in the balloon”. If you put water in a water balloon that is built to expand and contract based on where the water is, the balloon will inflate in certain parts and deflate in others. The part with the water in it looks full and robust, but the part without water looks a little sickly and sad. So then you change where the water is and the look of it changes too. But at the end of the day, you aren’t changing the amount of water in the balloon. It is a closed system. All you are doing is moving the water around.

In reading some follow up articles about the ALS Water Bucket Challenge, they received a tremendous influx of donations, and even funded a breakthrough on identifying a gene associated with the disease. This is great! But critics argued that this didn’t do much at all to raise awareness about ALS—that all it did was create an internet sensation. Others asked, does that really matter if it increased giving and led to additional solutions for this horrible disease?

In times of COVID, and perhaps back in 2015 as well, I think it does matter. Right now, if we are not creating new donors in the relief efforts of COVID, but rather just shifting the water in the balloon—this could have some very real and long-lasting effects on charitable organizations. Personally, I have spent extra money on supporting local businesses during this time. I have donated to COVID relief funds. I have donated to new charity options popping up. I am grateful that the IRS will give me more benefit on my 2020 taxes for making these donations but I, like others I am guessing, am starting to settle into what the next six months will look like for my personal budget. The next year. I may not have the money to give to the organizations I usually support each year, because it went elsewhere, or I may need to save it for my family’s own security. Big picture-what about the millions of people each week who are losing their jobs in addition to their expendable income and will now need the services of the safety net organizations which they used to support? And how will major funders select their projects in the months and years to come? Will they support the same organizations but at a different level—because their money is on the same stock market ours is? Will they shift their support to safety net organizations because there will be such a tremendous amount of need? And how do we plan for any of this? 

At the Colorado Institute for Social Impact (CI4SI) we would like to offer you two suggestions at this time:

• The first suggestion—talk with your funders. Have open conversations about your concerns and ask them about theirs. Hopefully you have done this already, but if not, develop a relationship with them that goes beyond them sending you a check and you sending them a report. This includes donors, investors, foundations, etc. Transparency is key right now, and we don’t see that ending anytime soon.
• The second suggestion—gather your leadership team (even if it’s a party of one) and seriously consider what a business model would like integrated with a mission or purpose. It doesn’t matter if you are a for-profit or non-profit entity. In 2008, during the Great Recession, Social Impact businesses popped up everywhere because people were tired of buying from companies that were only focused on money, and there wasn’t a lot of extra money floating around to donate. Consumers figured out that if they could get a product or service that they needed—and that product or service also financially supported solving a social or environmental issue—then they were more likely to buy.

As we crawl out from the COVID impacts, we anticipate we will see the same trend, but with even more fervor. Consumers of today, especially the younger ones, are savvy about sniffing out the authenticity of an organization and how they treat their employees, their stakeholders, and the communities in which they exist. Therefore, it must be genuine mission or purpose. But if done well, organizations that have tenets of Social Enterprise, Conscious Capitalism, or anything in between, are already doing better financially with consumers and investors alike. Social Impact businesses will be an important step for our economy moving forward and could make all the difference in how quickly we stabilize our nation.

For more information on Colorado Institute for Social Impact and the services we offer, please go to our website at CI4SI.org or email [email protected]