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Impact multipliers and budgeting for them.

What do you suppose happened, a handful of years ago, when the new evaluation director for the Norwegian aid agency examined all of the evaluation reports for the previous year? What she found was "what money" was being spent and "what activities" were being delivered. "But," she wrote, "critical questions about whether those services gave rise to real benefits for poor people and other target publications were" in a word, "elusive." Sound familiar?

As our final 2017 spreadsheets are being prepared and shared at my own organization, Independent Sector, budgeting for impact is an imperative that, more than most, keeps me up at night.

During my 25-year career, the nonprofit world has shifted more than once. One of the most dramatic and positive shifts has been from the pursuit of tidily designed programs to the frequently messy business of driving impact and solving problems. Whether by means of a business plan, theory of change, or other operational framework, too many organizations formerly were focused on implementation with an eye to achieving excellence in traditional program design and delivery. This has been equally true of infrastructure organizations.

At Independent Sector, historically we have aggregated value for our members first and then for the sector as a whole. We have thought in terms of programmatic excellence and member value. We engaged in sets of year-to-year activities to monitor internal performance and profit centers versus societal impact in the world at large over a relevant period of years. Now we are looking at how the charitable sector can be more effective, and, more fundamentally, at what the very notion of "effective" looks like.

The focus is to a much greater degree on prioritizing impact to tackle problems and innovate. And collaborate. Take climate change, for example. No one organization can successfully mount a program to meet this global challenge; it requires a set of solutions. From scientific research and the adaptation of new technologies to communications and policy advocacy, each organization generates a different aspect of the solution to make a material difference in our planet.

In keeping our eyes on the prize, we are learning that clear measures of societal level change must be made in partnership, depending on teams of actors to monitor and control for these activities. These partners include beneficiaries for whom impact is the most immediate and personal. To be successful these activities require human resources and capacity building and collective learning from and with local partners, focused on impact.

This shift in viewpoint is far from complete, however, including in the funding community. Whether the donor is an individual, government, corporation, or philanthropy, we recognize that all of our stakeholders are in different places on this spectrum of programmatic excellence versus problem solving. There is a cognitive dissonance that results and this noise gets in the way of setting priorities and working together.

Solving this problem is especially critical where the goal is to scale benefits for people and places in need. For example, you might be tackling graduation rates, poverty rates, childhood obesity rates, the health of our democracy, or enabling the natural world to flourish. In every case, we must evaluate problems quickly to address challenges, ensure there are adequate resources and feedback loops, and work with partners to spread road-tested solutions across a critical mass of communities.

Looking back to my years with Communities In Schools, it was certainly the case that $1 million could have a big impact on a high poverty school. To share that investment across 10 to 20 schools, budget planners would have to be hyper clear about what they were doing and what contribution they would make. This is a much harder task but one with the potential of yielding 10 times to 20 times in impact.

Our bottom line: With limited financial and human resources, IS is looking for impact multipliers that can accelerate the sector and advance the common good. We seek to do so in deep partnership with members, funders and partner infrastructure organizations alike. The impact we seek might, as in Norad's case, be "elusive"--but it will not be for lack of trying.

Daniel Cardinali is president and chief executive officer at Independent Sector in Washington, D.C.
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Title Annotation:SPECIAL REPORT
Author:Cardinali, Daniel
Publication:The Non-profit Times
Date:Dec 1, 2016
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