Who Pays for Impact?

Apr 19, 2023

Grace Castillo

Making an impact is often an aspiration, it’s a compelling purpose. But somebody needs to fund it to make impact, real. The Social Finance Programme at Said Business School, University of Oxford introduced me to a new field. Blended finance and catalytic capital were fresh concepts but they all made sense to me. It fulfilled my long standing discomfort funding social purpose pursuits primarily with donations and grant funding. I believe in value equity or value pricing. Impact has tremendous value.

Our new environment calls for multi-stakeholder mindset and behaviour shifts when it comes to building businesses that now go beyond CSRs and ESG Frameworks. We’re called to move forward to genuinely make an impact to society. It starts with a Theory of Change (ToC) that is baked in an organization’s culture, infrastructure and processes. A concept most familiar to non-profits, NGOs, social enterprises, social institutions but almost unheard of among corporations, private or public. Wicked problems + ToC = Impact Solutions is a compelling endeavour to pursue.

Who’s willing to fund and pay for Impact ? In Financial Statements, line items are either revenues, costs, expenses, cash, taxes, inventory, various assets and forms of liabilities. Impact delivers value; no doubt, but is it usually funded as an investment or a cost item that is ultimately priced with meaningful, measurable value or both. When we tease apart social impact, it is multi-dimensional, thematic, sector and region driven. It’s possible that Impact could be considered an investment or even cost in the Global North but embraced as a revenue in the Global South. Impact, therefore is valued either as an investment transaction or value solution, that carries a price tag.

This theory bears pursuing if we are to price and value impact; follow the decision - making processes of of the investors, funders, industry partners, investees and beneficiaries to uncover and discover who will ultimately invest or pay for IMPACT.

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