The One Acre Fund's Approach to Impact
It is a familiar situation: Every year as December approaches, we sit down with our families to think about where to direct our charitable giving for the year. Together, we know that we need to make tough trade-offs between great causes. But how can you compare the worthiness of your alma mater, the local theater that is part of what makes your community a great place to live, and an organization working to eradicate hunger in the homes of African farm families? How do you evaluate where your limited personal resources can do the most good? How can you make a choice between organizations working on causes you care about?
In our dual roles as both leaders at a fast-growing nonprofit and as donors ourselves, we spend a lot of time thinking about what kind of evidence is useful in making these choices. Given limited philanthropic resources in the world, we want to fund and scale the interventions that are creating the most social good for every dollar invested. Unfortunately, few donors make giving decisions based on relative performance. In fact, only 6% of donors report comparing organizations when making giving decisions, with donors who give through donor-advised funds reporting a much higher 17.1%.
So why aren’t more donors looking at organizations comparatively when making charitable giving decisions? We know from our experience that it is not because donors aren’t interested in how organizations compare, it seems that it is just difficult to find data that are easily comparable between organizations. Unlike for-profit companies that have the common metric of “profit,” nonprofits all define impact differently.
At One Acre Fund, a 10-year-old organization working in six countries across east and southern Africa to make smallholder farmers more prosperous, we try to make it clear for our supporters how their donations generate impact on the ground. Each year, we share our key impact measurement—increased profit per farmer—as well as the cost to the donor for serving that farmer. In 2015, we required approximately $29 of donor support to generate $137 in increased profit per farmer. Our peer review suggests this 5:1 “bang for the donor buck” is among the strongest for programs working at scale in our sector.
For those organizations where impact cannot be easily calculated in dollars, we think donors can and should think about what prospective donations will achieve. The next time you sit down to consider a meaningful gift, here are some questions you might ask to learn more about an organization’s approach to impact:
- How does the organization measure success?
- What data have the organization collected to suggest it is achieving that success?
- How long does it take to see success?
- How much does each additional project/unit/client cost?
- How does this compare with peer organizations?
No matter what type of organization you are considering, these questions will help you put impact at the center of the giving conversation. And while a wildlife conservation organization may have a very different way of measuring success than a medical research institution, when we clarify what an organization is likely to achieve and how much it will cost, we are able to commit our own donor dollars where they have the best chance of achieving the goals that motivated us to give in the first place.
Matt Forti, Managing Director, One Acre Fund U.S., T. Rowe Price Program for Charitable Giving Client
Briehan Lynch, Director, Business Development, One Acre Fund