Australian social enterprise Thankyou has made a dramatic pivot to its funding model to join a growing movement of unconventional philanthropists seeking a new way to effectively help achieve the end of extreme poverty, rather than perpetuate it. Thankyou says that for 12 years, they believe their approach to giving contributed to a ‘broken’ system – a system built upon ‘donor dysfunction’.
This ‘donor dysfunction’ affecting the NFP space is driven by the desire from donors, like you and I, to support projects that they can tangibly see and understand. We like cheap, simple, tangible solutions that make it easier for us to ‘claim’ and ‘market’ to our supporters, under the illusion of accountability. And we like to ask these kinds of questions: How much goes to admin? How much are executives paid? But how much did they spend on marketing? What did they physically do with the exact money I sent them?
After listening and learning from their partners in the field, and studying existing research on this matter, Thankyou believes this way of ‘thinking’ has caused significant issues. The first-ever study released in 2018 to review ‘what goes wrong’ in impact-focused projects demonstrated that funder-created obstacles made up 46% of issues threatening the success of projects. Fraud and theft accounted for 4%, while violence and conflict accounted for another 4%.
Imagine giving a heart surgeon money and then directing them on how you want that surgery done because it’s your money? As bizarre as that sounds, this is a good picture to illustrate the current state of play in the global development sector that Thankyou is seeking to flip. And it has led to organisations treating the symptoms, but not the root causes. It’s resulted in temporary fixes and broken solutions, and unsustainable solutions which in some cases, caused harm to communities.
What’s the solution? After giving ‘the wrong way’ for 12 years, Thankyou is seeking a new way forward – a direction that they feel is mission-critical in this post-pandemic world to help sustainably alleviate poverty that exists in communities globally. To work with organisations who aren’t afraid to solve complex, root cause issues, organisations who focus on true impact outcomes instead of just activity, fund them and then give them the power to decide where that funding goes.
This is a method called trust-based philanthropy. Thankyou says this approach means taking your hands off controlling every detail of a project and letting the heart surgeon do the life-saving work. Thankyou has recently given $10m within its new trust-based philanthropy model, and its new approach will be continually monitored, tested and refined over the course of the coming years.