The first factor to consider in determining whether to fund a particular social project is whether the change agent involved has the authority and power to make things happen, said Don Laackman, principal at the Civic Consulting Alliance. “You want there to be positive outcomes based on our work,” he said.
Laackman was among panelists from such organizations as the MacArthur Foundation and Boeing who explored models for giving during the 2009 Net Impact Conference, held at Harper Center on February 23 and sponsored by the student-led Chicago Booth Net Impact group.
Laackman said the Chicago-based alliance also attempts to quantify the value it can deliver to the change agent and project, makes sure the project matches the alliance’s expertise, and looks for a partner to provide pro bono assistance. “As much as possible, we try to put numbers around the value we provide to our clients and focus our efforts toward the highest-returning projects for the city and the area,” he said.
Depending on their size and resources, philanthropic institutions utilize very different dynamics in seeking and choosing projects, said Allison Clark, program officer at the MacArthur Foundation. “There’s a tension because there are always human needs that need to be met and can only be met through government or contributions from corporate or community foundations,” Clark said.
Sometimes opportunities arise to fundamentally change the political landscape by getting people to think differently about an issue, she said. “This requires a lot of strategy, capital, and relationships,” Clark said. “These are things large foundations have the opportunity to do in a very different way than smaller institutions. From MacArthur’s standpoint, that has really governed the way we have created the opportunities we have chosen to pursue.”
By starting with a very clear goal for a project, investors can then measure whether the project has succeeded, said Angel Ysaguirre, director of global community investing at The Boeing Company. “It sounds really simply, but for some reason most people don’t do it,” Ysaguirre said. “For us, the most important or central thing is to be able to state the goal of the project very clearly and how it is we’ll know, before it even begins, whether or not it’s successful.”
Because Boeing only funds projects in which it is deeply engaged, the company naturally monitors their implementation, he said. “In terms of putting people on boards, we see that less as a way of monitoring our investment and more as a way to both strengthen the skills of our employees and to lend more resources to an organization,” Ysaguirre said. “We try to place board members in organizations that become incredibly important to us over time.”
The two things ROI* Ventures offers that are of the most value to its clients are intellectual capital and risk mitigation, said Suzanne Muchin, founder and lead strategist for the firm, who said the acronym stands for “return on inspiration.” She said, “We have a deep team of people who’ve been in this space for a long time. We joke that our value decreases after the first meeting. When we’re fresh, clean, and coming in without any biases, we usually provide an insight that is game-changing.”
Many social impact organizations face risk of financial capital, social capital, and personal capital, she said. “Having a firm like ours running interference, especially for foundations, gives us the chance to have a real leverage,” Muchin said.
Read views on funding underserved markets by Net Impact keynote speaker Edward Powers, ’95.