Letter from the Trustees

Words by The Trustees
29 September, 2020

The giving system is broken, and we helped break it.

To the growing Thankyou community,

On the 29th of September 2020, we launched a bold campaign: No Small Plan. It aims, in time, to raise hundreds of millions of dollars (and beyond) over the next decade for the end of extreme poverty.

As bold as the launch was, we wonder if the boldest part wasn’t found in the launch video, but in what you are about to read. Because raising money alone won’t end extreme poverty. There are plenty of examples of causes, campaigns and concerts that raised incredible amounts of money that equated to very little impact. It turns out, raising and giving money isn’t enough. How we give it - well, that will determine if we truly help or hurt the world we all want to see changed.

While we still don’t know the true effects of the pandemic on the world, we do know that the world’s poorest have been hit the hardest. The latest report estimates 500 million people were pushed or sent further into extreme poverty undoing two decades worth of development work and progress.(1) Both global & local charities, who form a big part of working with people on their journey out of poverty, are facing bankruptcy(2) as governments and individuals hit by the economic impacts of COVID-19 are anticipated to decrease their funding commitments to these organisations.(3) We are already seeing charities pulling back on the work they can do, leaving countries, and making staff redundant.(4) For maybe the first time in our generation, we’ve woken up to the real reality that we should all have six months to a year’s wages in our bank account, in case the world just stops with no warning. All of these events will dramatically impact the face of giving to charity for the next decade.

The world is in a very tough spot. Now more than ever every single dollar counts and so, we must make every single dollar count.

Like all good stories of those working to help end extreme poverty, we wanted to be part of the solution.

However, after almost a decade of our journey, we took a look in the mirror and the reflection wasn’t what we’d set out to create.

In fact, we had become part of the problem.

We are not the first to realise what you are about to read; we are not the first to this table and we are grateful to have learned from those who’ve been sitting at it for some time. The challenge is once you see what you are about to see, it’s hard to unsee. But the good news is there’s a lot of room at the table and this is an invitation addressed to you to join it. As you read, know this: we haven’t made it. We are still on this learning journey and as a result, we commit to continue listening and challenging our assumptions. Because when that stops — so should we.

When helping hurts

On one of our early trips to the field, we noticed something was very wrong.

We were walking through a village in Cambodia where we’d funded a well and some water filters. As we walked, we noticed three other wells already existed in that village. It was a very uncomfortable feeling. We thought we were here to bring clean water to a community that didn’t have any. When we approached our partner, to be honest, we thought we were about to call them out for misleading us. What followed shocked us.

Minutes after asking the question, we were given a tour of the other three wells, all of which had big charity logos placed on them. It was explained that one was dug during the wet season, so when the community needed water in the dry season, there was none. Another well had hit a bed of arsenic leading to the community drinking from it suffering from arsenic poisoning, and the final well had a mechanical device that to repair would cost more than building a new, sustainable well from locally sourced parts. We walked away from this community shocked. Shocked because it was likely the three other groups thought they had ‘helped’, yet each project had set the community back further.

It turns out the more you open your eyes within the development sector, the more you see.

The broken handpump wells

A 2009 study showed 40% of handpump wells in Sub-Saharan Africa are broken at any given time.(5) This statistic has not improved a great deal since then with a 2016 study showing that 40% of water points installed have failed within 4 years.(6) The World Bank estimates the cumulative effect of rural water supply failure in Africa over the past 20 years represents a lost investment of more than of $1.2 billion.(7) That’s a hard stat to unsee, especially when you consider the huge amount of time and effort put in by well-meaning people to both raise the funds and implement the projects.

Used-clothing donations

For a long time, the idea of donating clothes to people who don’t have much has been considered a noble idea and a seemingly harmless act. But, in 2008, a study was conducted which found used-clothing imports were having a severe and negative impact on apparel production in Africa. It turns out that these donated clothes contributed to approximately 40% of the decline in the local production of clothes and 50% of the decline in employment over the period 1981–2000.(8) It’s unlikely that anyone donating clothes to Africa over almost two decades realised they were going to contribute to such an economic disaster, further trapping people in extreme poverty.

Playpumps case study

We also remember when we first heard about Playpumps. At first, we thought it looked like a really cool idea. Each Playpump system consisted of a merry-go-round like wheel, where children could play - usually built near a community center such as a school, which was attached to an underground water pump. The more it spun around, the more water it could extract from the ground.(9) Created by a UK-born advertising professional and an inventor, each system also had a rainwater tank installed above the Playpump, which was surrounded by 4 billboards so local companies could advertise, thus creating income for the community. A safe water solution that provided hours of fun for children, and a sustainable funding stream - surely was a win-win situation. It turns out we weren’t the only people to like the idea. They were backed by some of the biggest aid and donor agencies in the world.(10) This led to a huge fanfare and rapid expansion of the technology.

But on deeper inspection, everything did not quite stack up. Playpumps were expensive — they cost four times what a regular water pump did. Aid workers reported that they were fragile and difficult to repair.(11) A report from the Guardian found that children would have to “play” for 27 hours a day to meet the target of delivering water to 2,500 people per pump.(12) Unfortunately, the idea was scaled up really quickly without in-depth research and of the more than 1,500 pumps that had been installed with the initial burst of grant money in Zambia, one-quarter already needed repairing within two years. Women reported feeling degraded and embarrassed every time they had to get water for their families and the list of challenges went on.(13) There are many confronting reports on Playpumps and other ideas that haven’t fared too well.

The more you open your eyes, the more you see.

At Thankyou, we love innovation and we know that failure is one of the prerequisites of success, if you learn from it. This is not a ‘point at Playpumps or people who donated clothes out of the goodness of their heart’ moment to highlight their flaws. There was no ill intention. But an idea on its own isn’t worth much; its value is found in the execution and herein lines the challenge the world was, and is still, facing.

Back to that eye-opening moment in Cambodia. When we returned, we began reading case studies and hearing stories that confirmed that we did what many others did, funding solutions that didn’t last. So, we made a decision to only fund ‘sustainable development’. Solutions that stand the test of time.

Unsustainable solutions became the enemy. But something still wasn’t adding up. Even though the developing world was littered with poorly implemented projects, every funder we met talked about only funding ‘sustainable solutions’ and every charity said they only implemented them too. But the issues of the past were still sector-wide and repeating themselves. Little did we realise that in our mission to fight the ‘unsustainable development enemy’ we missed seeing one of the greatest factors contributing to unsustainable development. It was the core issue with Playpumps, the clothing drops and the three broken wells in Cambodia.

This issue was in every meeting we had had with every single impact partner we’d ever worked with. ‘It’, the issue, was us; the donor.
These examples of failure are not new. In fact, they are a small sample representing many other examples throughout development history. The common theme with almost all of the stories is when many well-meaning organisations and their funders intervene in implementing a solution, they do so without taking the time to learn, listen, understand and then work in partnership with the people they are trying to serve. When we, the donor, think we know the solutions that are needed to solve an issue (sometimes without even realising it), it can lead to disastrous consequences both for the partner organisations and the communities they serve.

Image: Thankyou and one of our impact partners, meeting with the national department of public health and engineering, to review a Thankyou-funded water, sanitation and hygiene program.

Money is power

Why are we, the donor’s, allowed to dictate what happens ‘in the field’?

Because we have the money.

And where there is money, there is power.

When you have the money, you find yourself with a seat at the ‘better table’ at the gala dinner. When you have the money, lots of people nod and smile at your ideas. When you have the money, especially a lot of it, you can find yourself in the driver’s seat. But, 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 the best picture we can paint to describe where much of the global development sector is at.

Our mirror moment

If you took a survey of donors and asked them a simple question “What is the greatest contributor to obstacles which threaten the success of a program?” You’d likely hear answers such as theft, conflict, etc. Our guess is that only a few could have picked the answers at the top of the list.

Open Road Alliance is a non-for-profit funder that helps charities when they encounter unforeseen roadblocks.

Through data collected over a period of 5 years, they found that fraud & theft accounted for 4% of the financial challenges organisations face. Wait for it. Violence & Conflict 4%. Funder created obstacles 46%.14


Source: “Roadblock Analysis Report” By Open Road Alliance, 10 April 2018, https://openroadalliance.org/resource/ora-roadblock-analysis-report

We didn’t want to believe it at first.

But when we held up a mirror to our own journey, we ticked every single blue box in the chart. This is just one of the many pieces of research that once you see, you can’t unsee.

In our relentless pursuit of being part of the solution we became one of the biggest obstacles.

If we are going to see the end of extreme poverty, we, the government donors, corporate donors, philanthropists and hundreds of millions of individual donors, have to not just give, but give differently.

Life and death literally hang in the balance.

There are many layers to donor dysfunction at both an individual level and at an institutional level. Here are some of the key issues we’ve seen as we held the mirror up to ourselves over the last few years:

We love simplicity

As donors we like funding stuff that we, and those who support us, can see and understand. We love funding in boxes, but to end extreme poverty, we have to be very comfortable getting outside of those boxes.

This is a famous slide presented to a U.S. General during the war in Afghanistan. Achieving stability was not as simple as tackling insurgent forces, but it needed to involve a response addressing interconnected, complex, and systemic root causes.(15)

Source: “Afghan Spaghetti”, PA Consulting, 30 May 2010.

Trustee commentary (Feb 2022): When we wrote this piece in early 2020, we could have not have predicted the events in Afghanistan to have transpired in 2021. Unfortunately, the withdrawal of coalition forces leading to a swift re-takeover of the country by the Taliban is an example of the inability to understand root causes and therefore, create sustainable and systemic solutions.

Or take the UN Sustainable Goals as another example. These 17 ambitious goals aim to eradicate extreme poverty in a sustainable manner.

Source: “Sustainable Development Goals (SDGs)”, United Nations.

Looks relatively straight forward. But, here are the same goals mapped out showing how one area links to another.16 The point is, these aren’t boxes that can be separated and tackled one by one, these are inextricably linked. It’s a system of interconnected and interrelated parts.

Source: “A Guide to SDG Interactions: from Science to Implementation”, International Council for Science, 2017.

As donors, traditionally we like the idea of funding the simple solutions like a AUD $20 water filter, or AUD $1 million dollars worth of wells or a AUD $500k rural hospital. But funding a half million-dollar research paper determining the effectiveness of those wells and hospitals, to take the learnings to help them refine the implementation and pivot to more effective outcomes, and then scale them to thousands of communities sustainably - that doesn’t feel tangible enough. Historically, donors don’t like funding ‘research’.

Or what about funding capacity strengthening work with the government to ensure the health sector can stand on its own two feet once external development support finishes? For many donors, it feels like ‘wasted money’. Some may choose to fund these needs, but on the condition that the majority of their money goes to tangible things they can see.

We know that without good evidence and research, you can’t progress. Modern medicine, business, political campaigns, scientific discoveries all use research to inform almost every strategic decision. But the development sector has fallen far behind because donors, broadly speaking, don’t like funding pieces of paper. Without deeply engaging and involving those who govern a region to find solutions to the challenges faced, society fails - every society. Everyone wants charities and NGOs to do sustainable work, but very few are up for funding what it really takes to do it. When we started out, we liked the idea of expensive pieces of paper, we liked to hear about government engagement, but we thought we had better things to invest in — like wells.

For too long we’ve put our focus on funding simple solutions to a vast and complex problem. Poverty is complex and it must be solved with solutions that address that complexity.

We like claiming big numbers

As donors, and even as humans, we like to feel that the impact we make is big and significant. And society has fed the idea that big numbers equals significant impact. So, projects that have a lower ‘cost per person’ to implement become really attractive because it sounds better to be ‘helping more people’. Especially if you’re marketing to consumers. For example, investing AUD $400,000 to provide 200,000 mums with a low-quality, maternity kits at AUD $2 each sounds bigger, and therefore better, than investing the same amount of money on a well-studied, holistic, integrated public health program that works with local and existing health systems to identify gaps in the system that cause maternal and newborn deaths, but only serves a population of 10,000 communities members.

The latter example may result in less-tangible solutions like strengthening supply chains for the procurement and delivery of vital medicine, OR performing life-saving refresher courses for health workers, OR even ensuring a rural maternity clinic has a reliable source of power.

Comparing both approaches, if the evidence clearly shows that the second approach is more effective at reducing maternal and infant deaths, isn’t it a no-brainer to fund the second option? Put more simply, shouldn’t we fund solutions with the community’s best interest as the priority vs our own marketing claims?

This choice exists in almost every development sector, with the cheaper, seemingly bigger projects being funded, and the more impactful, complex, sustainable work underfunded. We started funding the more expensive development projects (like the holistic health program in Nepal) and watched many competitors make big claims about helping more people with birthing kits. What are we here to do? Sell more products by claiming bigger numbers, or are we working to end an injustice that shouldn’t exist.

If consumers are involved, we like making marketing based impact decisions

Social businesses (like Thankyou), or corporates who make an impact, often need to communicate the difference they are making. This has led to an idea that the more people who like and understand the impact being made, the bigger the impact we can have. They say the consumer is king. This has led to many social businesses and corporations giving only to countries that their consumers resonate with or funding solutions that make sense and are tangible to consumers.

An easily understandable and tangible concept employed by many brands is the ‘one for one’ concept. Buy this and we give, or do, that. It is the holy grail of ‘micro impact marketing’. We originally valued this too. We started out with the claim that for every water bottle purchased, we gave one month drinking water to someone in need. We had videos showing the 500ml of water purchased helping give someone over 600 litres of water! It was amazing! Our food products gave ‘a week’s access to food’. Pretty good for a box of granola. But, this became really restrictive. We couldn’t fund certain water and food projects because they were too expensive and didn’t meet our ‘one month’ and ‘one week’ claims. Could a community be restricted access to basic human needs because they were too remote and too expensive to reach?

We held onto our ‘one month’ and ‘one week’ claim for years too long until we walked away from them and any form of tangibility to a person’s purchase decision. It felt like a part of us died. It did, but we exist to help provide sustainable solutions, not cheap ones. We are here for impact, not winning more consumers to sell more products.

In the social business and corporate space, micro impacts and decisions to help your own backyard win every time over sustainable development and global issues. The filter applied isn’t how do we win in ending an injustice, but how do we win more consumers.

We don’t like ‘wasted money’

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? These are all things that we, donors around the world, so often ask.

We heard a friend of Thankyou put it this way one day. Let’s go back to that picture of a heart surgeon. Imagine for a moment you or your partner needed life or death heart surgery. Do you call around heart surgeons looking for who has the lowest overheads? Or do you call around asking for who had the highest success rate of that surgery? For too long we’ve obsessed over the wrong number. Research conducted by Bridgespan, Indiana University, and Urban Institute has shown that there is no relationship between the percentage of overheads an organisation has and effectiveness.(17) Yep! No relationship. Reading this research and watching Dan Pallota’s TED talk on ‘The way we think about charity is dead wrong’ were moments that made our jaws drop with realisation and recognition.

The charity sector has fallen under intense scrutiny, and you could say has been punished as a whole with our cynicism as a result of some charities doing the wrong thing with funds given to them. Yet despite some corporates doing the wrong thing with their money, the same bias is not created nor the same expectation placed on the for-profit companies. If we invest in Amazon, Facebook or Tesla we don’t get to invest that money and say, “Hey Mark, I want a list of all the things you are going to specifically spend my money on,” or “Jeff, you can’t lose any of this money on ideas that might not work,” or “Elon, we won’t fund any of your staff costs”. Instead, the investor approach is ‘I’ve reviewed your plan and how you define success. I’ve seen the team you have and I’m going to trust my money with you to meet those success measures. I will hold you very accountable, not to how you spend this money, but if you meet those measures of success or not.”

Jeff will stand up in front of investors and talk about losing USD $170m on the smartphone that didn’t work;(18) Mark celebrates the appointment of the former Google executive Sheryl Sandberg at a reported 7 figure remuneration package,(19) and Elon can talk about a delay of many of his amazing ideas.(20) Failure is expected to a reasonable level, investing in remarkable people is expected, and delays are acknowledged as part of life, because these are trademarks of innovative and successful organisations. Investors look for proof that these companies are learning, that they are ultimately progressing on achieving their mission. These are three of the most valuable companies on the planet right now.

There are no non-profit organisations at the scale of any of these companies, nor any innovating at anywhere near the same rate.

We have paralysed an entire sector from failure and have them obsessing over how much they spend on admin instead of how they are meeting their ultimate impact success measures.

If non-profits stop losing good talent to higher paying tech companies, invest in ideas that might not work (like Edison’s lightbulb prototypes failing 10,000 times(21) and do not have to meet magical, made up admin ratio rates, we might have a chance of solving some of humanity’s greatest challenges.

We say we like impact reports, but we really like activity reports

Impact reports are really hard. You have to rigorously measure outcomes like reduction of a disease or deaths, which are attributed directly to your solution you have implemented. To do that you have to take expensive and time consuming baseline information in the community before the program starts, then you implement the program, and then you measure the effects of the program on these outcomes. Finally, to truly understand if you’ve made an impact, you need to measure your findings against a comparable group of people to see whether the change was greater or less during the same time period, to see whether it was changed as a result of the program you implemented. You also have to make sure the baseline and endline participants are large enough to ensure that you have enough confidence in your findings. If your study shows that you have succeeded in positively impacting on the issue you originally set out on influencing, you have made a true impact.

This can take years and the hard reality is that sometimes the change we want to see isn’t always there. Which means further pivots and measurement. But what one thing do donors love more than all of the above?

The picture of a piece of hardware and even better, a photo of a child or family in front of it.

The entire global charity & NGO sector has built a ‘marketing machine’ around this, and we, Thankyou for the better part of 12 years, helped make it worse. We gave consumers tracker codes to see the GPS coordinates of the projects they funded and then photo proof with field reports years later. It all sounded good – we called it Track Your Impact, and everyone loved it. We were applauded on stages around the world for it. But it should have been called ‘Track Your Activity’.

Did we ever design it to track activity?

No. But we made the same assumption many people do; that impact and activity were the same thing. Track Your Impact did exactly what it said it would do - show you the project your product was assigned to fund. But that’s just attribution of activity, the well built, the filter installed, the birthing clinic constructed; not proof of actual impact, i.e. the reduction of maternal and infant deaths, the reduction of disease, the increase of children in schools due to not having waterborne disease, the increase of family income on not spending on medical expenses. Side note: this is why Track Your Impact as we know it won’t be something we continue in our new era of funding. Instead, we’re looking at new ways of connecting our audience with the impact we’re making together. Ways that genuinely measure impact, and empower (not bog down) our impact partners in the process.

We don’t like to think we have bias

In our experience, partners who have close proximity to the challenges they’re trying to solve, provides opportunities for solutions which are contextually tailored and have the best chance of getting local buy-in, and addressing root cause issues and finding sustainable solutions.

However, studies show that donors (while they may believe in this concept) rarely fund local organisations directly. In 2019, local and national organisations directly received just 2.1% of all international humanitarian assistance.(22)

Analysis conducted by Bridgespan on promising early stage organisations showed “the unrestricted net assets of the black-led organizations are 76 percent smaller than their white-led counterparts. The stark disparity in unrestricted assets is particularly startling as such funding often represents a proxy for trust.”(23)

In our experience, if a local leader does not share the same social networks with us, or is able to talk in the donor-speak that we are used to, we are uncomfortable in pursuing a partnership with them.

They are put in the ‘too-hard’ basket, where they are judged negatively on who they are, their cultural background and where they currently live, rather than the impact they are having in their local communities.(23)

We like giving short term grants

Often under the guise of ‘accountability’ we only like to commit to a project for 12 months.

Change takes time. Impact takes time. However, funders often expect change to occur in 12 months, and if not, they then take their money elsewhere. This creates a perpetual state of anxiety for our charity partners who are constantly not only worrying about solving issues the world hasn’t even found a solution, but whether they can continue to employ staff or keep the program running because funding will run out after 12 months.

Mutli-year grants are critical.(24) If change is complex not simple, if the work takes time not moments and it takes relentless dedication of those doing the work to see it succeed, how can we expect organisations to succeed if they are not given the time they are needed to do it?

Many donors have the luxury of making year long grant decisions in comfortable air conditioned rooms while the heroes of the story, those on the ground and in the field, commit years and decades of their life (and their families lives) far from the comfort of air conditioning even if they don’t know if their next year will be funded or not. We’ve made many of these air conditioned decisions.

Why is this all important to talk about?

Why is this important? Well to solve the issues the last 10% of people living in extreme poverty are experiencing will require unprecedented levels of innovation, creativity, highly talented individuals and never-seen-before solutions/strategies which may not make sense to the average person.

Donors can create obstacles for partners which equate to poor development practices, wasted time, energy and resources which results in replicating conventional, one-size-fits-all approaches, a lack of focus on learning and long-term impact collection, and poor-quality solutions to tackle systemic and complex change.

Don’t get us wrong; accountability, transparency and connection to the work a donor is part of are not wrong. But are we holding our partners accountable to outputs or impact? Are we requiring tangibility rather than transparency? Are we wanting to fund projects that make sense and connect us to the field, rather than taking time to listen, learn and be impacted by the solutions of communities and partners we are trying to serve?

In the pursuit of accountability, transparency and connection we’ve birthed some ways of working that’s got the development sector in a choke hold.

We must forge bold new paths forward.

The way forward

As donors it’s clear that we have inbuilt expectations, ideas, and experiences that can lead to trust, control and bias issues that can affect the partners we work with and ultimately the world’s poor. But donors (anyone who gives even a dollar to charity) are not bad people full of self ambition and ill intentions. They are humans (who are not perfect, like all humans) who have good intentions and who have joined a dysfunctional system that rewards this dysfunction.

It’s nice to feel in control. It’s nice to have the best seat at the gala. It’s nice to feel like you understand all the things you’ve funded. Specifically for social business and corporates, it’s nice for consumers to love all your decisions. It’s nice to have a catchy marketing claim that helps get more people onboard to help you sell more product. It’s nice to know that none of your money funded something that didn’t work, and the list goes on.

But to be honest it also feels nice to walk away from some of that and realise that you are giving in a way that will see the end of some of humanity’s greatest challenges.

We believe there is a way forward.

Our mirror moment

We’ve been on a 12 year well-intended journey. But the listening and learning for the last few years has led to this fundamental pivot at Thankyou - to find impactful change-makers, and trust them to solve complex problems with the aim of seeing systematic change instead of funding simple solutions.

12 years into our well-intended story, we’d given AUD $6.9 million the “old way” (at the date of the article being published). We spent years listening to our partners, to the community, to experienced and effective foundations and conducted our own research. We discovered the pioneers and those who lead this space and became aware of the areas that we’d got it so wrong in. And once we saw it, we realised we had to change our entire impact model.

We had to walk away from what, quote, ‘built Thankyou’. No more linking of products to a specific activity – like water that funded water projects, diapers that fund maternal and infant health projects, food that funds food projects. No more ‘micro impact claims’. No more tracker codes on individual products that link to GPS coordinates of the well or health clinic you helped fund, with photo proof of every single piece of hardware. Because the extra reporting held our partners back and focused on the activity not the outcome. It means no more dictating to partners the level of admin spend and what solutions they could and couldn’t fund.

For too long we’ve put our focus on funding simple solutions to a complex problem. Poverty is complex and it must be solved with solutions that solve that complexity.

It means we go all-in on partners and true partnership.

We’ve summed it up in a sentence: Thankyou is amplifying impactful change-makers, globally.
Going all in for us means understanding and acknowledging that we do not know the answers; we should trust in impact-driven organisations - and amplify their impact. We also acknowledge as a donor, there are certain power-imbalances at play. We want to continue to develop self-awareness of this, and negate its harmful consequences.

For us specifically, this means a commitment to:

  • Provide multi-year, unrestricted funding, giving for the greatest effect where there is the greatest need.
  • Reduce administration and reporting requirements that our grants may provide to free up our partners to do more life-saving work and less admin. A big part of this includes not continuing our Track Your Impact system, which added unnecessary strain on our partners. The good news is we’ll still be communicating our impact, but it will look a little different to how it used to. We’ll be sharing our grant criteria on our website, who our impact partners are, what funding they’ll receive from us, and reporting on the actual impact goals and milestones we’re holding them accountable for.
  • Provide honest, timely, responsive, accurate and clear communication.
  • Commit to learning with our partners and the communities we serve, to help shape and inform our decision making.
  • Seek, and act upon partner feedback, so we stay accountable to our partners.
  • Build an internal culture that embodies these values.
  • Where possible provide partners with non-monetary support to help amplify and realise their mission.

In our new giving model, we’ve found remarkable leaders in the fight against extreme poverty, covering diverse sectors and regions of the world. We have vetted them and are giving them a total of AUD $10 million. Each grant is a 12–18 month test fund, and on its success we plan to move to multi-year grants. Prior to meeting our partners, we did our due-diligence on each of them; from reference checks and our own research, we were impressed with what we saw. From there we met them and did a deep dive. For those that have sufficiently aligned with our mission and criteria, we’ve granted them the test fund and the following 12–18 months completes the full due-diligence process.

Our partners are about tackling systems and root causes rather than providing a band-aid approach. They are concerned about gathering high-quality evidence to demonstrate they are having impact; they are remarkable, local people. Each of them have committed to transparent reporting on the highs, the lows, what’s working and what’s not. Most importantly, they are focused on successfully delivering their impact outcomes.

Our partners are accountable to funding partners (like Thankyou), the communities they serve and other key stakeholders in delivering their impact goals. This isn’t free money; this comes with the weight of delivering change. If the partners are unable to produce results and lasting change for the communities they serve, in time, funding ends. No different to the likely exodus of shareholders if Tesla stops making good cars, or if Amazon becomes one of the slower delivery services of products or if Facebook loses its users rapidly.

What’s the way forward for all of us?

We aren’t perfect. We are not claiming to know how to end extreme poverty. And we are likely to get things wrong as we continue our journey. But we also know that this pivot in how we give allows us the best shot at serving communities with effective and sustainable solutions.

As a donor, if you’re curious about our shift to unrestricted funding we’ve highlighted a few parts of what this journey looks like:

A commitment to amplify change-makers, exponentially:

  • Fostering an enabling environment for mutual trust to occur
    Understanding and mitigating donor bias in decision-making
    Giving unrestricted, multi-year grants (subject to regulatory requirements)
    Funding holistic and multi-faceted approaches which understand the complex systems they are operating in — not simple solutions and activities that make sense to us
    Learning and understanding that impactful solutions can only occur if partners are best placed to discover and implement those solutions
    Receiving and acting on partner feedback
    Understanding that non-program costs are crucial and foundational. They aren’t the holding change back. An organisation that isn't being impactful is.
    Allowing failure as the key for finding innovative solutions (needed to tackle complex issues). Failure isn’t the enemy. An organisation that covers up failure and doesn’t learn and make changes from its failure is.

Further insights, specific to social business and corporate donors:

  • Choosing to make decisions for the projects we fund based on impact, not marketing. We have to be comfortable with funding un-sexy, but important work.
  • We have to keep impact and giving at our core - not the add on to help boost CSR, public image and make more money.

We aren’t the first to pioneer this way of thinking. In fact, we would strongly suggest you, or the organisation you represent, read more about how to exponentially amplify the impact of your partners through your philanthropic behaviours here and sign the unicorn manifesto. (That’s right, we said unicorn. Intrigued? Learn more here)

To the heroes of this story, charities and NGOs serving the world’s poor on their journey out of extreme poverty; keep solving complex problems, measuring true impact, taking risks, launching bold new ideas and being patient with donors who may account for a large percentage of your challenges but, we hope, will reduce over time.

While we are grateful to have given our partners’ projects AUD $6.9 million in 12 years (at the date of the article being published), we are excited to begin this journey of learning what it means to be an organisation that really backs our partners. This year we are giving our largest annual amount of AUD $10,000,000 in this new way.

We are still a few 0’s short of our goal of giving a lot more. You may be wondering why we are sharing all this and taking you on our journey. What’s the point? Well, we believe that even bigger than Thankyou having a mirror moment, is lots of people and donors having a mirror moment too.

Maybe as you read this letter, our journey has been your journey too. And this is your mirror moment. Maybe you are 10 steps ahead on this journey and can offer some further advice to us.

Either way, you have the ability, right now, to join the growing movement of donors who think deeply and act accordingly to serve the lives of the extreme poor, who’ve stepped out of the way of blocking the end of extreme poverty. We can use our collective giving power of billions of dollars to amplify impactful, change-makers exponentially.

To sum up this entire letter in a sentence

It’s not just the money we give, but how we give it that will ultimately hurt or help the world we all wish to change.

Join us in righting wrongs and bringing light deep into dark places.

To solve the broken giving system and to end extreme poverty requires a huge systems change. But sometimes the biggest change we can all make is within ourselves.

Thank you.
— Peter, Justine & Daniel

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