During recent times, grant-making programs have started to witness gradual but noticeable changes in terms of giving funds to NGOs for developmental work. The conventional method of giving short-term grants for quick implementation is getting replaced by the introduction of creative partnerships between donors and NGOs to create a long-term, meaningful impact in an innovative manner.
According to Claire Merchlinksky for Quartz, “Amid growing inequality and scepticism about the motives of billionaires, a new philanthropy is taking shape. Evidence-based and results-driven, donors are rethinking where and how they give.”
This new trend was started by billionaires, who have recently created a vast array of wealth through their entrepreneurial prowess around the world, now seek to hone their skills for bringing about a positive social and environmental change. According to the UBS report, ‘The Billionaire Effect: Billionaires Insights 2019‘, “Because after 30 years of success, ultrawealthy entrepreneurs have accumulated considerable assets; they have proven problem-solving and organizational skills; they are in positions of influence. Further, they can risk new approaches that might only see results over the long term.
The Conventional Grant-making Methods
The conventional method of grant-making involves processes where grant announcements were made, project proposals were requested (or unsolicited proposals were received) and grants were sanctioned with little or no participation in bringing about the desired social impact.
There are many faults in this method, which is partly responsible for the poor capacities of NGO grantees in developing countries despite spending billions of dollars in grants. The grants were given to NGOs that had poor skills in effective grant management – which resulted in other real issues related to corruption, unaccountability and lack of transparency.
Besides, grant-making foundations are mostly overwhelmed in this type of scenario. They are overburdened with grant requests from NGOs all around the world, which makes them spend most of their time in responding to unsolicited proposal queries rather than building upon the quality and effectiveness of the programs.
According to Bradford K. Smith, a former employee of the Ford Foundation, “When I worked at the Ford Foundation in the 1990s, I remember counting more than 144,000 requests in a year in which we made fewer than 2,000 grants. That pattern is repeated throughout the sector: Nonprofits and foundations invest enormous effort in preparing and reviewing proposals through time-consuming processes in which most of the data, analysis, and insights generated in the process are simply discarded.”
The New Trends of Social Impact Investment
Social impact investment programs seek to provide investment for achieving positive social change and, in some cases, financial benefits as well. Investments can be made into companies, NGOs, prizes or funds with the intention to generate social and environmental impact alongside a financial return (The Global Impact Investing Network).
According to Den Sociale Kapitalfond, “A social impact investment is a partnership between a provider, a supplier and an investor, who all agree to solve a social challenge. This could be: Prevention and reduction of stress, Prevention of diabetes or other illnesses related to life style, Employment for vulnerable people, Education and employment for marginalised youth and Better employment in vulnerable neighbourhoods.”
Social impact investment is steadily increasing as investors look for social enterprises and innovative NGOs to undertake projects that lead to lasting solutions. The Social Impact Investment Taskforce says that “impact investment in international development may turn out to be one of the fastest growing segments of a global impact investment market”
According to JP Morgan & The GIIN (2014), investors spent $10.6 billion in impact investment in 2013 and committed to spend more for the following years. A great part of these resources is expected to be invested in the Sub-Saharan Africa.
Who are the New Type of Billionaire Philanthropists?
According to the Global Impact Investing Network, billionaire philanthropists have set side at least $228 billion for impact investment initiatives. The Forbes lists some of these billionaires who are making impact investments in various areas of social and environmental development.
- Bill Gates: Healthcare and Poverty
- Mark Zuckerberg and Priscilla Chan: Education
- Steve Ballmer: Poverty
- Michael Dell: Education and Health
- Laurence Powell Jobs: Education, Climate Change and Accountability
- Paul Allen: Global Development
- Ray Dalio: Education, Health and Financial Inclusion
- Pierre Omidya: Education and Climate Change
- Dustin Moskovitz: Climate Change
- John Doerr: education, healthcare, energy and climate, poverty and leadership
- Dan Gilbert: Urban Renewal
- Diane Hendricks: Urban Renewal
- Scott Cook: Education
- JB Pritzker: Education
- Job Breyer: Healthcare
- Jeff Rothschild: Social Entrepreneurship
- Stewart Rahr: Education
- James Coulter: Social Entrepreneurship
- Reid Hoffman: Civic Engagement
- Evan Williams: Environment and Healthcare
- Bill Ackman: Education
From the above list of billionaires and the areas of their investment, it can be deduced that healthcare, education and climate change issues are the top issues for which impact investments have been made.
Social Impact Investment Programs: Opportunities for NGOs
Social Impact Investment programs led by these billionaires and other philanthropists through prizes, institutions and foundations announce opportunities from time to time for NGOs to apply and win grants. To build partnership and win grants from these investment programs is by responding to the announcements made by them. Below is a list of open Social Impact Investment programs for NGOs and individuals to apply (as on November 2019).
Rockefeller Foundation’s $2 Million Food System Vision Prize
The Food System Vision Prize is an invitation for organizations across the globe to develop a Vision of the regenerative and nourishing food system that they aspire to create by the year 2050…[more]
UK’s DFID Impact Programme Call for Concept Notes
In this first Call for Concept Notes, the UK’s Department for International Development (DFID) IMPACT Programme is currently inviting innovative ideas for specific impact investing products, tools and services that address system level market barriers and that aim to increase the flow and distribution of capital aligned to the Global Goals to Sub-Saharan Africa and South Asia…[more]
TFF Challenge to create Successful, Socially Responsible Food and Agriculture Startups
Applicants are invited to submit their applications for Thought For Food (TFF) Challenge 2019-2020 which is an annual collaborative prize competition that creates successful, socially responsible food and agriculture startups in all parts of the world…[more]
Cisco Global Problem Solver Challenge 2020 to Receive $350,000
Applications are now open for the fourth annual Cisco Global Problem Solver Challenge 2020 in order to recognize new business ideas that leverage technology for social impact from student entrepreneurs around the world…[more]
Vodacom Digital Accelerator Program to support Early and Growth Stage Technology Startups
Applications are now open for Vodacom Digital Accelerator Program that will support early- stage and growth-stage technology startups with disruptive products & services that have potential to be brought into the market and scale into profitable, revenue-generating businesses…[more]
British Council’s Global Innovation Challenge- #IdeasChangeLives (Receive £20,000)
Do you have a great digital idea that has the potential to create a better world? If yes, this challenge gives you a genuine chance to change the world and improve the lives of some of the world’s most disadvantaged people – what’s your idea? #Ideas ChangeLives is looking for people with a fresh, entrepreneurial spirit and a big idea that has the potential to make a positive impact for communities across the globe…[more]
Invitation for Projects delivering Climate Resilience benefits in Low- and Middle-income Countries
The Private Financing Advisory Network (PFAN) has launched a special Call for proposals for projects that deliver adaptation-related and climate resilience benefits in low- and middle-income countries…[more]
SUEZ-Institut de France Award: Calling Innovative Solutions for Access to Water, Sanitation and Waste Management
The SUEZ-Institut de France Award follows the principles and organisation of the “Water for All” competition, which it replaced in 2011. It rewards projects and innovations that contribute to the development of water services, sanitation and waste management in developing countries…[more]
USAID-RAN Household Solar Workforce Development Challenge awarding Up to $350,000 Grant for Sub-Saharan Africa
The United States Agency for International Development (USAID) and the ResilientAfrica Network (RAN) have launched a call for proposals under the Household Solar Workforce Development Challenge, as part of the Scaling Off-Grid Energy Grand Challenge for Development (SOGE)…[more]
USADF-Nithio Off-Grid Energy Challenge for Kenyans
United States African Development Foundation (USADF) and Nithio Holdings Limited (Nithio) are accepting proposals for the USADF-Nithio Off-Grid Energy Challenge…[more]
Innovation Fund to promote Social Innovation in the Resilience-Building Sector in Ethiopia
Applicants are invited to apply for the RESET Plus Innovation Fund which is financed by EU- Horn of Africa trust fund and managed by ICCO Cooperation in collaboration with the affiliated partner Fair and Sustainable (F&S)…[more]