This article originally appeared in Philanthropy Impact Magazine in winter 2022

By Sonal Sachdev Patel - CEO of GMSP Foundation

Let’s get this out of the way: I hate the word impact.

At first, it’s a word that seems rather uncomplicated and wholly desirable — who wouldn’t want to ‘make an impact’ at work and in the world, right?

But dig a little deeper, and you’ll soon find that this six- letter word contains, and conceals, a great deal more. When you really interrogate what ‘impact’ means to donors and, more importantly, to our frontline partners, its definition is far less fixed. And exactly how (or whether) to pursue and measure it becomes far less clear.

I lead a family foundation whose frontline partners
are tackling deep and intractable social challenges in
the UK and in India. In the UK, that includes domestic violence, homelessness and chronic hunger. In India, our partners advance the health, human rights and economic empowerment of historically marginalised communities, including adolescent girls and migrant workers.

How do you measure hope?

In all cases, the leaders and teams of these organisations approach their work with commitment and creativity every day. And every day, they make a profound impact on the lives of the people they serve. I know, because I’ve seen it.

But many of the social challenges they face involve issues that are notoriously hard to measure and are generally not suited to impact investing models that would generate financial returns. After all, how do you demonstrate progress on building hope? How do you plot a graph of human dignity?

Because of this, more and more of our partners feel as though the word ‘impact’ has lost its meaning. And, with the buzzword taking up so much energy and interest among donors, nonprofits that cannot easily demonstrate measurable impact or generate capital returns worry that a loss of funding will come next.

It’s important to say that our partners and others aren’t advocating for the end of impact measurement. But they are feeling pressure to allocate time, staff and training to measure irrelevant things that end up oversimplifying their work and underselling the positive changes they make in people’s lives.

Meaningful approaches

What they want instead is for donors
to collaborate with them to find more meaningful approaches to organisational learning and accountability that do not leave anyone behind.

There are promising places to look for alternatives. The ACT (assets, capacities and trust) and similar asset-based
indicator frameworks used by community foundations and practitioners can provide a more holistic, adaptable and human-centred style of assessment. Storytelling, outcome mapping and outcome harvesting are thoughtful methods for impact evaluation and insight generation, too.

But whatever the approach to measurement, it should be genuinely useful (for partners and funders), as well as adaptable, accountable and empowering. Measuring impact should be a tool for inspiration and progress, as opposed to a blunt instrument of control or punishment.

At GMSP Foundation, our philanthropic practice is informed by our family values of love, trust and humility. At the start of any new relationship, we always ask our partners how they define impact (or ‘change’ or ‘results’ or ‘success’), and we use their definition to assess whether and how our support is helping them to achieve it.

Freedom to be flexible

We put less emphasis on impact measurement and reporting for a number of reasons. And that is a privilege. The comparative advantages of individual and family philanthropies include significant freedom and flexibility
in both relationship accountability structures and timescales.

This freedom comes with a sacred responsibility to use it in the most generative and supportive ways for our partners. That means filling gaps left by institutional funders, including funding the types of work that are difficult to measure, or impossible to monetise. It can also mean being far less rigid and demanding about measurement in the first place.

That’s because we know change is hard to achieve. It can be even harder to measure — and attribution is often near impossible, especially with multiple funders and other variables all working together in a given intervention to address social need.

Of course, I’m a pragmatist. I see that there are useful cases in which private capital could be deployed to solve global challenges through market-based solutions (particularly in sectors like agriculture, the development of clean energy and microfinance). I see, too, that there’s a role for impact investing as part of some larger foundations’ overall strategy, thus saving philanthropic capital for where it is most needed.

And it is still very much needed by frontline organisations and nonprofits everywhere.

It’s here where I want to consider the definition of another word: philanthropy.

Love of humankind

The word is derived from Greek and translates as something close to ‘love of humankind’. The purest purpose of philanthropy is in the giving (or input) rather than the outcome (or impact).

Efficient and intelligent use of resources is obviously important, especially as
it allows us all to help more people.
But many nonprofit organisations we work with warn that philanthropy is becoming too much like a business. And an obsession with impact measurement, and a growing inclination toward impact investing, are cited as some of the reasons why.

I want to disrupt the uncomfortable conflation of ‘impact’ (and therefore ‘success’) with reductive metrics. Our understanding and celebration of impact and success must be decoupled from these metrics if we are to be true partners to frontline organisations, and allies to the communities they serve.

That’s not so easily done, but it is vital if we are to maintain the humanity of our sector and live up to the original, generous promise of the philanthropic project.

In philanthropy and the wider social sector, ‘impact’ is a complicated word. It isn’t objective, and its meaning isn’t fixed. It is a word that can reflect our own organisations’ politics and priorities. It can incentivise or paralyse. It can centre people, or it can abandon them.

However we choose to define or measure impact, we cannot allow it to distract or disconnect us from what really matters. The sustainability of some of society’s most needed organisations — and the wellbeing of people in their care — depends on it.