US postage stamp

Letter from America

My colleagues and I have recently returned from a whirlwind programme of seminars and meetings in Washington D.C ., New York and San Francisco. Our subject: are we doing enough to create lasting social change by focusing on impact?

We explored this difficult question with some of the leading lights of the impact movement in the US, sharing our research on charities and funders, and learning from the experience of others.

It seems we are more like our transatlantic friends than not.

There is a burning platform in the US and the UK for organisations to redouble their efforts and focus on how to drive lasting impact. Despite encouraging economic signals, there is an acceptance of a new normal in the diminished funding of the social sector by the state. And while the economy is improving, there is little or no sign of this feeding down to those most marginalised and vulnerable in society. Inequality is a growing, rather than a shrinking, problem.

Our message that we need to take a systemic approach and invest in field-level strategies, like shared measurement and data labs, was well received. Within this, we need to acknowledge nonprofits as both fund-raising and activity-delivering organisations, and address the impact focus of both of these facets. It’s not enough to focus, for example, on how to build the evidence base across the social sector; we need also to understand how evidence can be built into fundraising in a way that works, so that money increasingly follows impact. If we can’t do this, we’ll always be swimming against the tide.

And we need to acknowledge the role of organisations as well as the role of evidence. We can learn from those with experience of trying to fund what works—the FB Heron Foundation and the Edna McConnell Clark Foundation, for example. Rodney Christopher, Senior Fellow at Heron recently asked ‘Are we focusing enough on enterprise when we seek to increase the impact of evidence-based programs?’ The evidence and my experience tell me we are not—both are essential, and neither are well-explored.

Ultimately, individual organisations cannot create lasting social change on their own. One seminar participant commented that while the tone of our discussion was pretty bleak, it was also reassuring, because he realised the problems he encounters are not evidence of ‘bad’ organisations avoiding a focus on impact, but rather a rational response to structural dysfunctions in the social sector. As Nancy Roob, President of the Edna McConnell Clark Foundation, said recently ‘It seems counterintuitive when we appear to be making so much progress, but our system and the logic on which it’s based is flawed.’

Funders increasingly ask charities for evidence of impact, and growing numbers of charities are doing it. But in the US and the UK we share a concern that this is driven more by funder expectations than by a desire to learn about and improve services. NPC’s research has shown this starkly—to understand behaviour we need to follow the money.

And we also suspect there is a real lack of decision-making among funders based on charities’ results. An organisation that shows great outcomes doesn’t necessarily attract more or better funding, nor does one without evidence automatically get precluded from funding. And funders asking for evidence aren’t always investing in the capacity to gather it.

In summary, while there’s a growing sense of urgency in both the US and UK around the need to invest in field-level strategies, we’re still standing very much before, rather than after, any kind of tipping point. It feels like we can see some of the structural problems, but we’re not really in the territory of solutions.

It’s not yet clear that the social sector wants to invest in its capacity to deliver impact at scale. But then, yet is an incredibly important word for an optimist like me.