Susan Raymond is the Founding Director of the Alliance’s Innovation Fund, which made its inaugural grants in the fall of 2012. These are her observations on the Fund’s receiving second quarter reports from its grantees:
The Alliance for Global Good gave birth to the Innovation Fund from a concern that nonprofits working in deeply complex areas of global development need diverse revenue streams to ensure their stability. Problem solving will take significant time, and therefore time must be anchored, in part, by the ability to continue to pursue mission with stable resources. While reliance on traditional charity will likely remain an important source of funding, new approaches to social finance and “market” based revenue generation consistent with mission could complement those sources and contribute to stability and mission achievement.
It was, to some extent, a hypothesis. True, careful due diligence was conducted to verify the accuracy of the problem statement and vet the utility of the approach with international nonprofit and development leadership. Still, such an effort to focus on enabling medium-sized nonprofits to “go to market” with revenue diversification strategies had not been undertaken previously.
Round I of the Innovation Fund investments brings news that the hypothesis does indeed have merit. After 6 months of effort, three of the four grantees have made marked progress toward revenue generation, from the jungles of the Congo to the mountains of Morocco to the crowded streets of Vietnam. In the fourth case, real but unanticipated (one might even say, unimagined) barriers have been overcome and a path forward is now clear. Moreover, in all cases the nonprofits have generated or attracted the matching resources required by the Innovation Fund, and hence begun to introduce their mastery of innovation into their traditional fundraising. The Innovation Fund’s leverage, therefore, is not simply against financial diversification, but also against deepened and broadened traditional donor commitment.
Much has been learned. There is still much, much more to be learned. Not everything has worked completely as anticipated. But this is the way of markets. And it reveals an additional benefit that the Innovation Fund is helping nonprofits to master, the benefit of nimbleness and flexibility in strategy implementation.
In a world where a new generation of philanthropists and a new cohort of social leaders are joining together to develop ever new ways to flow resources to social problem solving, there are increased opportunities for nonprofits to creatively match mission to markets in ways that strengthen and stabilize their work and funding. The Innovation Fund of the Alliance for Global Good is on the cutting edge of demonstrating how to invest in such capacity to produce concrete results.