How can you safely invest in innovative solutions for social problems?

You want to make a positive impact on the world, but you also want to be smart about how you invest your money. You don't want to waste your resources on ineffective or harmful solutions, but you also don't want to miss out on the potential of innovative and scalable approaches. How can you safely invest in innovative solutions for social problems? Here are some tips to help you navigate the complex and dynamic field of philanthropy and innovation.

1 Understand the problem

Before you invest in any solution, you need to understand the problem you are trying to solve. What are the root causes, the context, the stakeholders, and the existing gaps and opportunities? You can use tools like problem trees, systems maps, and stakeholder analysis to help you define and frame the problem. You can also consult with experts, beneficiaries, and other funders to get different perspectives and insights.

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Jenny Kleintop

Fractional Philanthropy Ops for Leaders and Collaborative Teams • Getting Nonprofit Data, Database & Operations Unstuck, Aligned to Frontline Strategies, and Thriving • Believer in Positivity, Uplifting & Community
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Another way to approach it to understand the pain points (this leads to understanding the problem.) - What keeps leaders up at night? - What keeps team members from meeting their goals? - What do you hear often.. "If only..."?

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2 Explore the landscape

Once you have a clear problem statement, you need to explore the landscape of potential solutions. What are the current and emerging trends, best practices, and evidence-based interventions in your field of interest? You can use tools like landscape analysis, horizon scanning, and benchmarking to help you identify and compare different options. You can also network with peers, innovators, and intermediaries to get access to relevant information and opportunities.

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3 Assess the impact

After you have narrowed down your options, you need to assess the impact of each solution. How effective, efficient, and sustainable is each solution in addressing the problem? How do they compare to each other and to the status quo? You can use tools like impact evaluation, cost-benefit analysis, and theory of change to help you measure and compare the outcomes and impacts of different solutions. You can also seek feedback from beneficiaries, implementers, and evaluators to validate and improve your assessment.

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4 Manage the risk

Before you make a final decision, you need to manage the risk of each solution. What are the potential pitfalls, challenges, and uncertainties of each solution? How can you mitigate or prevent them? You can use tools like risk analysis, scenario planning, and contingency planning to help you identify and address the risks of different solutions. You can also engage with partners, mentors, and advisors to get support and guidance.

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Jenny Kleintop

Fractional Philanthropy Ops for Leaders and Collaborative Teams • Getting Nonprofit Data, Database & Operations Unstuck, Aligned to Frontline Strategies, and Thriving • Believer in Positivity, Uplifting & Community
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Innovation by definition is "new" methods, which means they will not necessarily be completely tried and tested. - Getting on board earlier typically means lower cost as once it gains popularity, it likely will go up in price. - However if you go too soon, you run the risk of it not being tried and tested. But you likely will get results sooner. - And if you wait too long, you may miss an opporutnity to get onboard at all. It all just means, you want to assess how much risk you are willing to take and do what's right for you and your organization.

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5 Choose the strategy

After you have done your due diligence, you need to choose the strategy that best suits your goals, values, and resources. How much money, time, and expertise are you willing to invest in each solution? How do you balance your financial returns and social impact? You can use tools like portfolio analysis, decision matrix, and logic model to help you select and prioritize your investments. You can also communicate your strategy to your stakeholders, beneficiaries, and the public.

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6 Monitor and learn

After you have made your investment, you need to monitor and learn from the results. How well is each solution performing, adapting, and scaling? How are they contributing to the problem and the field? You can use tools like monitoring and evaluation, feedback loops, and learning agendas to help you track and analyze the progress and impact of your investments. You can also share your learning with others, celebrate your successes, and learn from your failures.

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7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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Jon Rolls

Head of Developing Communities 🤝 Founder🧑✈️ Social Impact Adviser💥 BLeader 🐝Carbon Literate 🌳
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Safely…what does that mean? No investors money is ever 100% safe in any walk of life so why should social impact organisations have any greater degree of ‘safety’ placed upon them…particularly when what they are doing is often where the market has failed. Investing in social impact requires bravery, alignment, long-term horizons, strong relationships and trust. We need to stop polarising social impact with this ‘corporate view’ of how an investment should perform…it’s an outdated model that doesn’t work for the benefit of people and planet!

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Paul Tatro

Development Officer - Grants at Saint Mary's Health Clinics & Sisters of St. Joseph Ministries Foundation
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Simple. Do the research, then just give. This question presupposes that the vast world of mission-based, service-based and/or advocacy organizations collectively has no competence or any ideas. "Innovative Solutions" can often be a euphemism for "Shiny New Object", but more to the point, completely ignores decades of underfunding existing well-established efforts, with demonstrated records of impact across decades. For instance, a horrific level of homelessness exists in the United States not because the United Way, YMCA, Salvation Army and Catholic Charities bungled the job of finding "innovative solutions" but more logically because of terribly unfair and dehumanizing economic and cultural practices deeply ingrained in everyday life.

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How can you safely invest in innovative solutions for social problems?

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4

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1 Understand the problem

2 Explore the landscape

3 Assess the impact

4 Manage the risk

5 Choose the strategy

6 Monitor and learn

7 Here’s what else to consider

Philanthropy

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How can you safely invest in innovative solutions for social problems?

1

2

3

4

5

6

7

1 Understand the problem

2 Explore the landscape

3 Assess the impact

4 Manage the risk

5 Choose the strategy

6 Monitor and learn

7 Here’s what else to consider

Philanthropy

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