As we approach the final few months of 2019, many of these institutions are re-evaluating their goals, recognizing that while change has occurred, we are still on a path towards the true seismic shift we all expected. We are running out of time, though. 2020 is just around the corner and there is still quite a lot of work to be done.
In 2015, the United Nations created the Sustainable Development Goals, (“SDGs”), a set of 17 critical priorities that businesses, governments and civil society must work around together to create a healthy, resilient and thriving planet for all people, nature and animal life that live here. The release of the SDGs gave these actors an opportunity to reframe their 2020 goals, and look towards 2030, the year the SDGs are targeting for their finish line. As 2020 approaches, 2030 becomes the new beacon for many of the same goals that were set back in 2000.
Has your business examined the SDGs? Have you considered what role you play?
We cannot deny, nor should we, that businesses need to make money as a first priority. At the end of the day, businesses exist to provide customers with goods and services. That said, businesses of all sizes have a role to play in society, too. The SDGs allow businesses a roadmap, of sorts, or even a menu of options to consider, as they evaluate this role. To play even a small part in advancing the SDGs, businesses will need to prioritize what's possible. It won't be easy to land on a solution for no poverty, or clean water and sanitation for all, or zero hunger in isolation. Collaboration will be essential. Now is the time to take a look within, however, to consider what role your business does play, and how your goals can align with the SDGs.
So where does one begin?
Working through these steps should give you a good sense of what elements within the SDGs are feasible for your company to commit or contribute to. It will take all of us working together to address the SDGs. Change is possible if we focus and act with intention. Let's make the next ten years count.
I can’t stop thinking about the immigrants at the southern border of the United States. Images from the news haunt me. Stories of neglect and utter deference for people’s humanity disgust me. Feeling powerless to the enormity of the situation, from the violence prompting families to leave their homes in Central and South America, to the sheer lack of civility portrayed by the American people, let alone our inept leadership, I do what I know how to do best – I figure out ways to encourage economic support in the places where these people are fleeing.
I tweet and retweet news that the U.S. Agency for International Development (USAID) is turning to the private sector to help build sustainable markets in places like Honduras, Nicaragua and Guatemala (despite funding cuts on the public side). I share ideas with corporate executives who are considering new and innovative ways to source products or services from different parts of the world where labor is needed and costs are lower. I help create partnerships for companies that do, still, provide them with profit but also provide a sense of long-term investment for communities where poverty has taken such a strong hold that the only solution is to migrate and face our borders.
I imagine the families I’ve met, not just in South and Central America, but in East Africa, in SE Asia, in the Middle East, in the Pacific, and think creatively about how market-based solutions could provide some semblance of economic advancement such that not only is migration held at bay, but violence too.
I am an idealist, no doubt. I am someone who believes in the power of Purposeful Profits and the ways businesses can use their purchasing power for good (consumers, too, by the way!) I am also someone who reads between the lines when USAID releases their strategy calling for ‘self-reliance.’ This means that as the U.S. Government retreats from its position of aiding those communities that cannot support themselves, and focuses investments on humanitarian and emergency assistance, funding to match private sector investment that helps propel ‘self-reliance’ in places where USAID operates is of crucial importance. Matched funding from the private sector will allow a dollar spent by U.S. taxpayers buoying local communities in places in economic turmoil to be matched by a dollar (or more) of private sector market building, with the hope that these two dollars will provide a return of three, or four or five or ten dollars into the future.
I believe it’s possible. I am seeing it happening. It’s one of the bright lights of this Administration and it means that if the private sector continues to come to USAID with a dollar in hand, USAID will match that dollar and help countries find the self-reliance that encourages fewer families to face the horrible decision of staying or leaving their homes.
If you are working in the private sector, or WITH the private sector in any way, consider how to pair your investment with that of the U.S. Government. It does not have to be through USAID. MCC, State, USDA and others are keen to work with the private sector to advance economic scenarios in developing economies. The results will benefit these communities in the end if we all work together towards this common goal.
As published via LinkedIn
It wasn't the first time I heard this, and I know it's not the last. During a standard prospecting call with a well-known impact fund (i.e. nonprofit) based in Europe, a potential client emphasized his need for investors, not just donors. "We are trying to transform lives here, not just put a bandaid on them" he indicated, ensuring I got the point. Not only did I get the point, but this notion of transformation, investment, impact and long-term change is rearing its head in virtually every call I have with potential and existing clients.
"We are not a nonprofit, we are an impact fund." "We don't just implement projects, we change lives."
He continued to share with me the rationale for investment, why a rate of return on this fund's projects is better than putting money into a similar European government fund, and why the projects this fund is leading are poised to systemically transform communities in several parts of East Africa. He sent me prospectuses, investor profiles and testimonials.
I kept thinking, but you are a nonprofit, not a stock or debt instrument.
He repeated one more time, before we ended our call, why corporate donors in particular would want to invest in his fund. "We offer a higher ROI than most impact funds in our area of expertise. We can guarantee measurable impact within 5-years."
Guarantee impact? Definitely music to a corporate social impact investor's ears.
Catch the drift here?
The .org is effectively dead. What is growing in its place is the impact fund.
Whether it's due to declining donor engagement, mission creep, donor fatigue or something else, the role of the nonprofit is slowly declining. Nonprofits are rebranding themselves, or coming up with new models to engage more innovative sources of funding and longer-term investment. Donors want a return, they want to show shareholders that valuable dollars go towards true impact, not just into another nonprofit-led, 3-year project. Gone are the days of bilateral philanthropic money handovers by corporate philanthropists to special causes or charities. Employee engagement is the new volunteerism, and you better believe that this engagement program deliver on business aims at the same time. Impact, purpose, mission, cause. The words are all jumbling together but the aim is the same. Organizations want to make a difference and they want to see their money spent wisely.
What does this mean for nonprofits? It means funds are harder to come by. It means being more direct with messaging and prospecting. It means figuring out how partnerships with companies, governments and foundations can be game-changing and not just about a tax write-off.
We have seen an insurgence of social enterprises popping up in developing communities, identifying ways to create lasting change and market-led programming. My company is getting inundated with requests from small social entrepreneurs in every corner of the world, wondering how to tap into the evolving funding pools from USAID, MCC, OPIC, corporates or foundations that are keen to turn a dollar into two. Economics are driving a sea change whereby "market-led" is a priority. Traditional .orgs that simply provide handouts must evolve.
Harsh? Maybe. But it's true.
To my .org friends out there, don't lose sight of what your work is doing to change the world. Figure out how to shift gears and focus on the long-term gains. Make sure your messaging is resonant with the changing winds of donors and keep in mind that these donors also want to be investors.
They want to see a changing world... One where they make money too.
No. This is not a political statement. Instead, it is a story about a billionaire who has established a corporate vision for our generation that could single handedly save us from ourselves. I am not speaking about Michael Bloomberg, although some may argue that this description fits him too.
Laurence Douglas Fink was born in 1952 in California, a son of an English professor and shoe store proprietor. A successful business student and eventual MBA, Fink started in the bond business in the 1970s when bond business was just starting to hit its stride. Laurence (or Larry for short) weaved in and out of the financial markets until the late 1980s when he founded BlackRock, an asset management firm that has since grown to be the world’s biggest, with $6.5 TRILLION under its auspices. One may think that Larry Fink, the billionaire who he is, and with the success he’s achieved, would be pleased amassing wealth and prestige, not thinking about much else. Perhaps in the older days of his asset management career that was the case. Nowadays Larry is most known for setting the high bar for corporate executives to lead with purpose and intent, and to make the world a better place.
Every year Larry sends out a letter to the companies in which BlackRock invests as part of the company’s Corporate Governance program. In 2017, Fink recalibrated on his 2016 letter where he suggested companies needed to start thinking longer term for greater value to shareholders, by suggesting that going forward, BlackRock will make determinants on investments based on the key ingredients that support long-term value, which include environmental, social and governance functions. Sustainability was mentioned several times in the 2017 letter as a key determinant of how companies are looking at growth. That growth isn’t just about shareholder returns and short-term gains, but about how a company can invest in global improvements.
By 2018, Fink’s letter took on a more urgent tone, requesting that recipients of investment dollars think strongly about the way the public is depending on companies to make a positive contribution to society given the pressing issues of our time. Fink says “without a sense of purpose, no company, either public or private, can achieve its full potential. It will ultimately lose license to operate from key stakeholders.” Fink’s letter goes on to question the role companies indeed play in society, and whether companies want to be known for being stewards of the environment and communities in which they operate.
When we live in a time when politics, business, philanthropy and technology seem to swarm with billionaires, and when society begins to doubt the audacity of said billionaires to give back in a way that is impactful and can effect change, it’s hard to give credence to these moves by Fink to inspire companies to do the right thing. That said, the waves Fink made by writing his imploring letters, and subsequently the changes we’ve seen in big companies wanting to play a bigger hand in the space of sustainability, are monumental. Whether you take these actions at face value, or like some, see them as a pure money making ploy, that’s your choice. My perspective is that leading companies are figuring out how to represent their business interest in a way that has positive humanistic and societal implications. Stakeholders and shareholders are responding well, and that will only continue as investors, partners, governments and ultimately consumers support those companies doing the right thing, without question and without hesitation.
Do you ever think about how to improve the challenges our world faces when we can control so little outside of our own actions? Have you considered how the efforts you put into making a change jive (or not) with those of others? Whether you are a business owner, nonprofit executive, leader at a large company, entrepreneur or any individual trying to make a positive impact, it seems near impossible sometimes that we will be able to make a dent in our greatest challenges if we don’t do so by working together.
I’ve spent my career trying to solve problems that seem near insolvable. Anyone who knows me knows that I am a stalwart champion for effective collaboration to address these challenges given their complexity and scope. Ensuring every person on this planet has access to basic necessities, for example, like water, food, shelter and education may seem like a moonshot project, but it doesn’t have to be. Effective collaboration can truly make a difference.
It may be easy for someone like me to talk incessantly about partnership for problem solving, though, when that’s what I do every day. For others not used to working with partners to find solutions to challenges big or small, collaboration may not come naturally. I’m often asked how organizations can begin finding the right partners to work with if collaboration is a need or of interest. It’s a really important question actually. To put it simply, I often look at partnership through the lens of comparative advantage.
What is comparative advantage? Comparative advantage is a way of measuring degree of skill and strengths. For example, if one nonprofit is skilled at fundraising, and another nonprofit is able to do fundraising well, but isn’t as skilled as the first nonprofit, than the first nonprofit has the comparative advantage. This means that as the two nonprofits enter into partnership, the first nonprofit should really be the one managing fundraising, and the second should be working on a skillset where they have the comparative advantage (maybe M&E).
Comparative advantage helps you think about the types of skills that you bring to a partnership, versus where skills are needed to advance a certain mutual goal or deliverable.
Through comparative advantage, collaboration can be more structured, and thus roles, responsibilities and deliverables are easy to agree to. This makes goal delivery more effective and efficient, and helps us get out of our silos as well.
If this notion of partnership with a focus on comparative advantage, is interesting to you and yet you still are quite sure where to begin, start by thinking about what skills you bring to a partnership and what skills you still need. Helping you think through some of this is what we spend a lot of time doing at Connective Impact. We’ve also created an online set of tools to help too. Once you get started focusing on collaboration, whether using comparative advantage of your own set of tools, hopefully you will land on a solid approach to find your own set of moonshot goals to address and overcome.