Measuring Giving vs. Measuring Impact
On the heels of a wonderful Fluxxcon 2024, some thoughts and impressions on the critical difference between measuring giving and measuring impact, why are foundations often so much more comfortable with the former than the latter, and how that can (and needs to) change.
Last week, the Sowen team attended its first FluxxCon—and it was brilliant. While the rise of technology may feel imminent, the importance of human engagement remains undiminished, and it was lovely to see old friends while making new ones. Attendees included program managers, directors, C-level executives, IT leaders, and many others, all united by a common goal: discovering better, faster, and more effective ways to convert funding into impact. The inspiration was abundant, along with the swag bags and breakfast burritos.
Naturally, much of the conversation, presentations, and panel discussions revolved around the ubiquitous yet vague notion of impact. Some dismissed it as a fleeting buzzword. Others sat quietly, perhaps more focused on their breakfast burritos than the content of the conversation. Perhaps flummoxed by altitude. No judgment either way.
What was undeniably clear, (at least to me) is that the social impact sector is only beginning to engage with the idea of impact in a meaningful, tangible, and sustainable way. And that the current state ain’t great. And that the path ahead is a long and winding road.
Let’s Get Real?
The challenges we face are vast, varied, and often overwhelming. They include economic structures, questions of inequity, lack of resources, and more. Smart, dedicated people (even us here @Sowen) work tirelessly to solve these and other pressing challenges. We will need help. We will need collaboration. We will need courage, innovation, and funding.
We’ll also need to engage in honest reflection and call out inefficiencies and missteps when necessary. So, let’s start with with some numbers to show where we actually are.
The Numbers Game
Throughout the conference, I heard numerous organizations proudly share how much money they’ve been able to "move through their systems." Whether through individual donations or other mechanisms, the larger institutions boasted astronomical figures, while smaller ones seemed almost apologetic about their comparatively modest nine-digit endowments. Good people, sharing good information, about good work that is being done, every single day.
But that’s not impact. And as these figures were tossed around, ostensibly to signify merit, I found myself wondering—and perhaps even saying aloud—“Who cares?”
Now, before you ready the pitchforks, hear me out. I understand the system. I respect these organizations and the individuals behind them immensely. Most people I know in this space could be earning more and working less in the private sector. But when we equate dollars distributed with impact generated, we're not just missing the point – we're actively avoiding it.
While this is not a full analytical overview of the use of measurable impact amongst foundations, we did do a quick and (rather) dirty overview of the top 20 U.S.-based foundations (by the scale of annual giving) and their representation of impact.
The findings are telling:
Hey, Foundations…You Are Better Than This.
Yes, funding is important. In fact, it’s critical. But it’s still just a means to an end. The ultimate goal is social impact—improving lives, environments, and well-being. Throwing around big numbers feels good, and it is good. It means more funding is being allocated to develop programs, reach communities, train people, hire talent, and innovate. But it’s still a means. These activities are inputs, and if we can’t measure the outputs, outcomes, and ultimate impact, we’re avoiding the real issue.
Instead of treating the allocation of money as the solution, we should focus on measuring the change it creates—the actual end goal of social impact.
What Does Better Look Like?
So, where do we go from here? How can foundations evolve from being number-crunchers to true catalysts for change? Here are a few thought-starters:
1. Redefine Success: Shift the narrative from "How much did we give?" to "What change did we enable?" Focus on outputs, outcomes, and impact, not just inputs and activities.
2. Invest in Measurement: Allocate resources to develop robust impact measurement and evaluation systems. Understanding what works (and what doesn’t) is the key to scaling meaningful change.
3. Embrace Failure: Create a culture where learning from failed initiatives is valued as much as celebrating success. Failure isn’t the enemy—stagnation is.
4. Collaborate, Don’t Compete: Foster partnerships that leverage diverse strengths and resources for greater collective impact. Social issues don’t exist in silos, and neither should solutions.
5. Listen to Beneficiaries: Center the voices and experiences of those you aim to serve in your decision-making processes. After all, they are the ultimate measure of whether your efforts are working.