We define philanthropy as the giving of resources in an engaged and strategic way for maximum impact and in a tax efficient manner. It can include the giving of money, assets, time, talent, voice and one’s social capital. We believe in the power of philanthropy as a great social connector and the source of many great opportunities.

City Philanthropy

A Wealth of Opportunity

4 golden principles to consider when embarking on a philanthropic journey

Feb 24th 2015

How can we ensure our philanthropic activities have a positive impact? Katelyn Cioffi outlines the '4 golden principles' to making your altruism 'high-impact'.

The biggest concern all philanthropists face is whether their contributions make a positive impact or not. It can sometimes be taken for granted that all outwardly philanthropic activities are ‘good’ by default. However, conscientious philanthropists will understand that actions can fall short of achieving their aims and, in the worst case, can actually do more harm than good.

At the same time, charitable organisations face rapidly evolving problems. Resources are becoming increasingly scarce and even with the best will and the greatest effort, the current way of working will simply not be enough. Paradoxically, as the challenges that philanthropists seek to address have increased in number and complexity, more and more of them are turning to the ‘tried and tested’ ways of working.

Making altruism ‘high-impact’

In order for the UK philanthropy model to become more effective and to better address these evolving needs, there needs to be a conscious movement away from the traditional methods of giving towards what we call ‘high-impact altruism’. What differentiates high-impact altruists from  conventional philanthropists is the way in which they adapt ways of working to achieve sustainable results in the most efficient and effective way possible.

A high-impact altruist can be anyone – an individ­ual donor, an impact investor, or a corporate foundation – with a sincere desire to support the creation of social value. Below are a set of principles that, rather than being part of a rigid framework, should be evolved and tailored to specific needs. Although elements of high-impact altruism already exist throughout the sector, the uptake of these best practices needs to be much more rapid in order to accelerate the pace of social change.

1. Having a clear purpose

A clear purpose is more than just the will­ingness to do good – it is a way of channelling that willingness into a focused and specific mission that will guide all altruistic activities. Defining altruistic purpose can be challenging as there are so many worthwhile causes to support and ways of supporting. Altruistic purpose is composed of three core com­ponents: motivation, commitment, and ambition. In other words – what is my motivation for giving? How much am I willing to commit (time, money, resources)? And what is my overall ambition?

A clarified understanding of altruistic purpose should be integrated into all actions – from high-level strategies to day-to-day operations. As philanthropists can often lack the intense scrutiny and competitive pressures that drive businesses to improve efficiency, it is critical that they take ownership of their results.

2. Building an understanding of the issue

Without an understanding of the issues at stake, a philanthropist cannot make vital decisions about where to allocate scarce resources. Although few will be experts in the fields they hope to influence, being complete­ly dependent on others to understand and design the best solutions can be both risky and ineffective.

True high-impact altruists ask themselves a series of questions about the problem at hand, such as: ‘What issue am I trying to solve? What are its root causes? What information is already available?’ As most social and environmental issues exist in a complex system with multiple actors and external factors, high-impact altruists seek to understand the most relevant parts of the ecosystem in which they work.

3. Providing a proactive and supportive response

High-impact altruists also need to sup­port the development of sustainable business models for the projects they support, ensur­ing that solutions will be sustainable and scalable over time. To start with, this involves requires choosing a response model and excelling at it – will I deliver impact as a delegator; work in collaboration as an associate; or lead change as an activist?

Another way of encouraging sustainability is supporting capacity building, which enables organisations to do more with the money they receive. Through it, organisations build the skills, knowledge, and capacity to innovate and the infra­structure required to be more effective and efficient. This creates the ability to deliver more predictable, scalable, and sustainable social and environmental impact, and is a central part of what the high-impact altruist can offer.

4. Embracing learning and data-based decision-making

The final mark of high-impact altruists is that they use all the evidence and information available to make informed decisions and encourage continuous improvement.

There are three steps to facilitate on-going improvement: smart performance management, sharing learning from successes and failures, and fostering peer-to-peer learning. Firstly, performance management across the sector needs to be more rigorous, more realistic, and more open. Secondly, all experiences (successful or not) need to be used to learn and continuously improve to help philanthropists understand what to embed, scrap, or refine. Finally, better learning needs to be facilitated amongst peers. Philanthropists can help achieve this by fos­tering relationships between similar or related initiatives within their own portfolio.

Whether the altruist is an individual with a small amount of money to give, or a large corporate foundation with millions at its disposal, applying these principles can be transformational – both for the effectiveness and efficiency of operations, as well as the ultimate impact that one can deliver.

Katelyn Cioffi is a Principal at Aleron. Katelyn leads Aleron engagements, from project work to research, developing ways of improving social impact and efficiency.

To read Aleron's full report 'Principles of high-impact altruism click here

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