Bridge between needs and expectations
There is a tension emerging between desire to set (realistic) expectations for returns of investments made, but also to design and implement solutions that answer a true need for communities. It calls for a new (eco) system to be built in order to find a way to foster both sides.
“The key in impact is not to try to boil things down to one number. Instead, have an honest dialogue between investors, their LPs, and their target companies so that everyone understands what they are driving to accomplish.”
— Justin Stevens / Founder & CEO, Overlap Holdings
“Let's define what "impact" means and what realistic returns actually are. It's difficult to obtain data on this and analyze it. We have a field with tremendous potential to change lives, but incorrect expectations can also cause harm.”
— Rob Zochowski / President & CEO, The International Foundation for Valuing Impact
“There is one thing: everyone makes investments, everyone, as you say, whatever it may be. When I came to you, you took the time, made the coffee - everything is an investment. In my opinion, the time you spend with people is an investment.”
— Isabelle Andrieu / Founder and Investor, Translated
“There has been an evolution in thinking; before, the idea was to build, but now the idea is to look at what is necessary for the building to happen, so your kids can go to school. Sometimes we discover that adding things that seem obvious, like the possibility for kids to stay overnight, makes it possible.”
— Stefania Bazzoni / Chief of Staff at the Council of Europe Development Bank
“We believe that if we can manifest impact transparency, then we can move to impact accountability. And if we can move to impact accountability, we'll have a system that will hopefully manifest more equity.”
— Fran Seegull / Executive Director, U.S. Impact Investing Alliance
“If I had my magic wand, you would have perfect information flow and transparency and identification of these (impact) projects. And then a way of basically tokenizing them and creating investment amongst a broad range of retail investors and others. So that would effectively end up with a marketplace for a broad range of impact strategies with verified and vetted transparent impact management, where you can then allocate your capital to it with low transaction costs.”
— Gabriel Wilson-Otto / Head of Sustainable Investing Strategy, Fidelity International
“We don’t know what’s going to happen because we’re doing it. But if we feel it and we’re responding, and we’re connected, and we’re vulnerable, and all those things, it might make a difference. And I’d rather see that 10-year-old light up because she’s got a place where she feels safe. Because then I know I’ve done something that’s really real.”
— Peter Buffett / Co-chair of the NoVo Foundation
‘We started to build up donors who are giving us cooking oil, rice, and so forth. Our staff said, "Why are we doing this?" It's for the child. The father has lost his job, and then obviously there are issues with how they sustain themselves.”
— Manoj Dhar / Founder, IBEL (Grassroot education NGO)
Insights
Realistic expectations for returns
Clear communication and realistic expectations for both financial and non-financial returns are crucial amongst stakeholders to avoid causing harm to communities that are being designed for.
Long-term support, commitment, and capacity building are essential for sustainable community growth. It is necessary to address the problem of unrealistic expectations for returns on investments and hidden costs of externalities.
Understanding the needs of today and tomorrow
When designing for impact, the lens and focus needs to take into account both the now and immediate but also extend the focus to the future and what may be needed.
The balance between both opens up a “sweet spot” for true impact to be made.
Transparency is crucial for accountability and equity
Creating positive impact requires transparency, accountability, proper governance, and collective action. Investors must consider social and environmental implications, while bridging roles are essential for continuity of work.
Models of collective management, such as incorporated cooperatives, can facilitate impact creation and empower stakeholders. A holistic approach is necessary, considering social, environmental, and economic implications.
Individual wellbeing is the cornerstone for meeting communal needs
Nurturing the wellbeing of everyone involved in the journey is crucial for achieving positive impact to address communal needs. This includes everyone involved in the planning and implementation stages of the process – therefore not only limited to the people on the receiving side.
Organizations and communities should foster an understanding of individual experiences and contexts, invest in individual wellbeing, respect individual agency, and collaborate and partner to create more resilient and sustainable solutions.
Design challenge
How might we run small experiments in the current ecosystem to improve?
Transparency
Equity
Individual wellbeing
Design challenge