Submi&ed by Daniel Blumberg, Dave Goodman, and Anna Hurley, Zicklin School of Business, Net Impact Chapter
In our society we guard against all sorts of risks—car accidents, illness, ﬂoods, job loss—so why not guard against the misuse of our charitable donaGons? By oﬀering Impact Insurance, we acknowledge the reality that giving money away is risky, just as its risky to invest in the stock market. Stock market investors demand a return on their investment. However, many charitable donors do not. Guaranteed Impact would change that mindset.
• Decision: Jesse wants to donate $10,000 to ﬁght poverty. He is choosing between “ Tried & True OrganizaGon” and “Game Changer New OrganizaGon.” • Dilemma: Jesse is excited about Game Changer’s potenGal, but is afraid of wasGng money on an unproven organizaGon. • Solu-on: Game Changer is a “Guaranteed Impact” organizaGon. Jesse is oﬀered “Social Impact or Your Money Back.”
• Jesse pays 5% ($500) to Guaranteed Impact. (The percentage is based on the charity’s expected impact. Higher premiums will be paid for unproven organizaGons.) • A^er 1 year, Guaranteed Impact (or a respected 3rd party) will determine whether Jesse’s money has been spent wisely. – If Jesse’s money IS spent wisely: Guaranteed Impact will donate half of Jesse’s $500 to Game Changer and keep the remaining half to cover administraGve costs, payouts on other policies, and to make a small proﬁt. – If Jesse’s money is NOT spent wisely: Jesse gets his $10,000 back, courtesy of Guaranteed Impact.
• Enables more risk-‐taking: Guaranteed Impact encourages donors to give to innovaGve, but less well known, organizaGons. • Carrot & S-ck: (Carrot) If an organizaGon performs well, it receives half of the insurance premium paid by the donor. (SGck) If an organizaGon does not perform well, its insurance premium will increase or the organizaGon could be removed from the Guaranteed Impact program. • Guarantees are impressive: The markeGng value of a guarantee is very strong. Even people who do not elect to pay for impact insurance will be impressed by the “Social Impact or Your Money Back” guarantee. • Raise awareness of impact metrics: Guaranteed Impact will use the latest social impact evaluaGon metrics. We are guaranteeing social impact. We are not necessarily promising low overhead.
1.) Partner with a major insurance company to acquire appraisal & actuarial experGse needed to run Guaranteed Impact. Beneﬁts for the insurance company: • Corporate Social Responsibility – Guaranteed Impact will enhance the insurer’s image • PotenGal proﬁts – Guaranteed Impact is designed to be economically viable • New customers – Customers who purchase “Impact Insurance” will be more likely to purchase auto or home insurance from the same company 2.) Pilot the program by inviGng 50 innovaGve social organizaGons (in need of fundraising help) to be a part of Guaranteed Impact’s test phase.
3.) Launch MarkeGng Campaign • The campaign will encourage more risk-‐taking in giving, feature some of the innovaGve organizaGons, and promise “Social Impact or Your Money Back” • Guaranteed Impact Seal. The organizaGons will display the “Social Impact or Your Money Back” pledge on their websites. 4.) Evaluate and Expand. Once Guaranteed Impact is shown to be viable, double the number of organizaGons. Then double it again…
• Student-‐organized eﬀort will encourage universiGes to place at least 2 % of their endowments into Social Investments • Dual goals of educaGng future leaders (the students) as well as shi^ing dollars from passive to acGve • UniversiGes are implicit donors by accepGng lower returns for socially-‐screened pornolios • The "screening" tool is archaic, ineﬀecGve and ﬁscally irresponsible. • > $400 Billion in University endowments in 2008
• Social Investor Rewards is a program oﬀered through credit cards • ParGcipants use their credit cards to donate to organizaGons they expect to have high social impact • The lending insGtuGon promises to match a predetermined sum in donaGons to the highest performing social impact organizaGons
• The “Why We Don’t Just Give” campaign features prominent impact investors telling their stories of how accountability and measurement transforms lives • CelebriGes featured in short video vigne&es might include: – Brad Pi&: Make it Right – Christy Turlington: Global Fund – John Legend: Show Me Campaign • Vigne&es will be widely distributed on the web, radio, and tv and conclude with: “Learn more at MarketsForGood.com”