When individual philanthropists and institutional funders think about impact, they think about innovative approaches to problem-solving — a new method for mentoring teenage gang members, a unique research strategy for curing Parkinson’s disease, or a groundbreaking way to foster entrepreneurship in developing communities. There is a focus now at many foundations on evidence-based grant-making, which is designed to identify the programs that are having the greatest impact. Once donors or foundations feels they have found such programs, they direct their giving toward them. All the big players do it, from Skoll to Gates. They typically want as much of their donation as possible to go to that specific program or idea at the charity in question. Why? Because they want their giving and their grant-making to have the maximum impact.
Makes sense if you don’t think about it too hard. But if you do, the logic collapses.
That is Dan Palotta in his HBR blog. His basic point is that better to work on impactful funding mechanisms than impactful fundees.
Impactful funding mechanisms are a wonderful thing, but is this logic any sounder? Presumably the effectiveness of what is funded feeds back into the funding mechanism?
In any case, it’s not clear to me that a lack of funds has been the binding constraint in aid. I suspect there is more to Palotta’s argument but I don’t see it.
Hat tip to @pj_blue.