What part does the growth of social impact investing play in effective non-profit fundraising strategies?
Skating Panda is often asked by charities to provide innovative strategies around their fundraising and income strategies. This isn’t a surprise given the challenges in the sector. From GDPR to the decline of traditional ‘supporters’ and the rise of event based giving, through to brand and reputational damage in the sector, it’s becoming harder and harder for charities to find the income they need to make their desired impact.
And just like the corporate sector, the non-profit sector is experiencing turmoil as a result of Brexit with loss of income from the EU, showing that the challenges each face are perhaps not so different anymore; corporates are having to focus on the impact they make, and non-profits are having to become more innovative – and commercial.
At Skating Panda, we have spent the last 18 months working on several projects in this area – helping non-profits innovate around fundraising and become more commercial and enabling corporates to align profit with purpose.
Projects on the charity side have included scoping and business planning for a charity-owned social enterprise and visioning and concept testing for Social Impact Investing (SII). These projects are not just about innovative fundraising activities, but a wholesale reinvention of the funding model for charitable organisations, big and small.
Last year we worked on the first summit that looked specifically at investing with a gender lens. Whilst there is an enormous ecosystem of people working in this area and NGOs were present at the summit looking for investment, there are few examples of them owning the SII space. For a long time, donors have enthusiastically given money to beneficiaries to help them start new social enterprises in order to help break the cycle of poverty. But when it comes to rewriting this dynamic and asking donors for investment instead of donations and offering a return, there is little precedent of charities maximising this opportunity.
This leads to the bigger question of whether there is something fundamentally wrong with looking at SII in this light rather than simply focusing on donation innovation for charities. Some of the challenges are obvious. The potential restriction by funders will always be challenging from a programmatic point of view. With investment, the focus is inherently more about return than impact.
Is this really the role of the charity? If an organisation is promising return already, then is it the role of the charity to participate in SII or should they be dealing with the investor directly? Should the charities be the ones facilitating the investment? Or should there be an agreement that % of the return goes to the charity?
And the questions keep coming…should trusts and foundations be using social impact investment as a tool for impact and also for their own growth or should they maintain a separation? Which ultimately begs the final question, should impact and income always be separate?
Tough questions, and there’s little data available to date to help inform a consensus. However, change is inevitable, and organisations must consider how this impacts them and how they respond.
My last blog spoke about changing the narrative around the white saviour complex and social impact investing offers us a chance to stand side by side and enable growth as opposed to offering donations.
It is empowering, it is uplifting and fundamentally makes a lot of sense. Of course, this will never replace all income for charities, but it is exciting, and we have to embrace it. Skating Panda’s work enabling charities to innovate around SII and helping the most progressive charities answer these tough questions over the last 18 months has helped them plot the course forward.
By Gemma Cropper