Don't give up on purpose

Published: 24 January 2024

Knowing your purpose and understanding your impact is the road to better societal outcomes and key to maintaining your legitimacy. 

A version of this article first appeared on the CIPR Public Affairs blog

Not many news updates from the charity sector can make me sit up, but this one did last year.

Lankelly Chase, a large charitable foundation, announced that they were going to redistribute all assets, dismantle, and close. This was their reason:

We have recognised the gravity of the interlocking social, climate and economic global crises we are experiencing today. At the same time, we view the traditional philanthropy model as so entangled with Colonial Capitalism that it inevitably continues the harms of the past into the present. We acknowledge our role in maintaining this traditional model and know that these times demand bold action from us all in charitable organisations. This is our response.

This might look like an identity crisis, but for me, it is the most authentic and bold rethink of purpose that I have seen in the charity sector. Purpose is nothing new, but this reminds us that really knowing your purpose, and truly understanding your impact, is the road to better societal outcomes and key to maintaining your legitimacy. Public opinion backs this up. At the same time, no one wants to be accused of purpose washing’ – investors, consumers and donors can spot that a mile off. Far better to be ahead of them than get caught out.

No one is above scrutiny, even the National Lottery Community Fund. The Fund distributes over £600m to charitable foundations each year, but Danny Kruger’s 2020 report criticised the Fund for working in silos and recommended that the government should rethink the purpose and model” and explore options for an even more localised, community-led system for distribution.”

Their new strategy, It starts with community, would see them shift purpose towards turbo charging support for grassroots projects”. No doubt, this has been more than a rebrand: it is determining their whole business and operating model and, importantly, helping to secure their legitimacy. They have since announced a doubling of grants for grassroots projects.

Grant givers need to know they are intentionally doing good, where impact is happening, how it is feeling and have better measurable outcomes to prove it, yet many cannot get past trustees. At Social Finance, we act as a learning partner’ to bring not just data and charts to the table but get out to those with lived experience to test that evidence and continually refine purpose. Purpose is not static.

Individuals making financial investments for social good also demand clarity of purpose and evidence of intentional impact. A government-commissioned report, Growing a culture of investing, shows good outcomes could come through more social investment. According to the report, “’what happens to my money’ is an increasingly common question levied at the financial sector… and often comes with the hope, or expectation, that the savings will help tackle social and environmental challenges”. It says social investing done well can produce those intentional societal outcomes, but clarity about what social investing is remains a challenge.

ESG and CSR are no strangers to criticism, but matter greatly to demonstrating purpose and have the potential to add a new purpose. The Health Foundation wants health to be seen as an ESG issue with sufficient reporting mechanisms so that investors can embed health into policy and practices. Sectors could align around a common purpose to accelerate action. Purpose can therefore be shared; it does not have to be unique or always competing.

Purpose is as important for charities seeking investments and those making them to achieve societal impact. Knowing you really are achieving purpose requires more nuanced and clearer definitions of what good looks like and value given to reporting of non-financial intentional outcomes too. It must be part of a continual and open learning process.

Public affairs teams might fear a review or further scrutiny of purpose as a signal of an identity crisis’. When done boldly and regularly, with your communities at heart, it could mark the end of something, but also the start of something better. 

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