Beyond Flexible Funding

If you have spent time working with nonprofit organizations, you have probably experienced a seemingly ubiquitous pain point: rigid donor restrictions, a huge portion of the funding that nonprofits rely upon comes with some not-so-subtle fine print. Money can be spent on this but not on that; it must be spent within the next X months, and you should report back how many people were helped. The intention here is accountability — to make sure every dollar donated is really put to work. If a nonprofit doesn’t do what they said they’d do with the funds, then the money is cut off and diverted to another organization doing better work. The system is set up to make efficient use of philanthropic resources. At least that’s the theory.

Rigid donor rules dismiss the messy complexity of dealing with the interconnected problems of today — problems that require immense amounts of focus, flexibility, creativity, and — above all — experimentation. I’m talking about issues like the ballooning refugee crisis, rapid urbanization, or the difficulties small-scale farmers face amidst significant climate change. These are complex challenges with unknown solutions. What happens when we as a society need to fuel R&D, teach and inspire a new cadre of innovators, and fund the experimentation and failure necessary to find breakthrough solutions? A rigid system simply won’t work.

Many of the breakthrough inventions in our modern world started off as an interesting yet fairly uninformed prototype. The Wright brothers struggled through nearly seven years of failed kites, gliders, and other concepts before the successful flight at Kitty Hawk in 1902. Modern micro-finance, which now reaches billions of impoverished people all over the world, was born when frustrated Economics Professor Muhammud Yunus decided to lend $100 to village women with no credit history or reason to pay it back. Highly constrained funding discourages testing and experimentation, incentivizing nonprofits to play it safe.

So, when designing the Amplify program at IDEO.org, we decided to try new modes of support. With funding from DFID’s innovation team, we set out to find a cadre of innovators from across Asia, Africa, and the Middle East, and use the tools of human-centered design to help them design and launch new solutions to some of the toughest social problems. We baked in key principles of flexible funding to make sure our innovators had the space they needed to really go for it.

Over the years, we have hosted eight innovation challenges to find new solutions to global social issues and vetted literally thousands of interesting idea submissions. Our team selected 46 high-potential ideas as winners and has spent years bringing them to life, helping them kick start the prototyping process and providing each of them with flexible funding to test and iterate along the way. As portfolio manager for the program, my role is to ensure the systems and relationships we build to support these organizations incentivize, rather than stifle, innovation.

Through a number of successful investments and some highly instructive failures of our own, we’ve learned a lot about what it takes to be effective catalysts for innovators and social entrepreneurs. It turns out there’s a lot more to it than just loosening the reins on funding restrictions a bit (although I fully support this, too). Here are a few things we’ve gathered about what it takes to build creative partnerships with grantees that allow for effective experimentation and learning that precedes the breakout of that mystical “innovation” we are all searching for:

Invest in trust

There’s a step in grant making that almost no one talks about, and fewer take seriously: the forging of mutual trust between the donor and grantee. Winners of the Amplify challenges are welcomed into our portfolio as people. We take the time to get to know all of these amazing humans before — and during — their engagement with Amplify.

Every winning team receives design support, flexible seed funding, and an opportunity to meet fellow winners at a week-long design bootcamp. Here, they learn about the human-centered design approach, but beyond the learning that happens, they begin to trust the process, the people that are providing them funding and support, and the informal, optimistic culture of Amplify, which is more agnostic of the traditional donor/grantee divide. No professional titles are allowed. For one week, it’s first names only. Casual clothing is encouraged. We want to get to know everyone in their element. Winners leave bootcamp with practical tools and lessons to take forward but, even more importantly, they leave with a sense of comfort about what to expect in the coming 18 months.

Bootcampers testing out their prototype
“Innovation requires experimentation, and it needs enough trust between donors and implementers to have open dialogue about what is working well, and what isn’t. This means constantly iterating, failing, and learning along the way.”
—Jessica Posner Odede, CoFounder & COO of Shining Hope for Communities (SHOFCO)

This foundation of trust is a critical precursor for the rest of their Amplify experience. It enables honest conversations about failure and requests for help when a hurdle is encountered. And just as they trust us, we trust them to use our funding judiciously. We have yet to be disappointed.

Prioritize learning alongside results

Following bootcamp, Amplify winners get their award funding in multiple phases, through a structure we’ve optimized for experimentation and learning (after many iterations on our own process). First, $10,000 is transferred to winners to run short, varied research activities and experiments about elements of their idea over the course of three months. We call this a prototyping phase. Grantees get feedback about their ideas cheaply and quickly, without unnecessary early pressure to prove the impact of every activity. The focus here is experimentation and learning.

Using the data generated through prototyping, grantees then develop a 12-month pilot plan that builds upon those early successes and incorporates new experiments and iterations. At that point, a larger amount of funding is released, which they receive in two installments. Between the first and second half of the pilot, reflection is built in to help grantees get a 30,000-foot view of their project, interpret their learnings, and make necessary changes to their solution.

Many new ideas fail, because teams try to scale before going through multiple rounds of experimentation. We design with and coach our winners to experiment early and often, with the possibility for scale later on. Some solutions gain traction and a pathway to scale becomes apparent. Others don’t, and for good reason — the solution needs to be adjusted, and that’s OK.

This experimental approach was core to our work with Amplify winner, Farm.ink. A tech team at its core, Farm.ink entered bootcamp with the hunch that they needed to build a chatbot-enabled app so farmers could more easily find buyers for their harvest. They assumed that the connection to markets was the hairiest problem to solve and that a chatbot was a scalable solution. We helped them do in-depth user research and prototyped a variety of bot products to understand what help farmers really needed. Each of our prototypes failed for one reason or another, but they all had elements that got positive feedback from farmers and buyers alike. This series of experiments helped point the Farm.ink team towards their current product, a moderated Facebook farmer group with built-in chatbot functionality. Built up completely from scratch, the Africa Farmers’ Club’s current user base of over 150,000 Kenyan farmers is the largest of its kind in Africa. Farmers are chatting not only about market connections but best practices in planting, crop management, and other issues that couldn’t have been predicted. And the group size is growing every day. More importantly, the Farm.ink team continues to experiment and learn what they can do better.

Farm.ink’s different iterations
“The game-changing feature of the Amplify experience was an active encouragement to iterate. Spending time defending a flawed hypothesis is a lose-lose-lose scenario for funders, innovators and end-users. If your early stage product idea hasn’t changed much over the course of one year then you’re either a genius or kidding yourself. Our team of 3 experimented with countless product concepts, UX designs and much more. Now we are rapidly moving toward 200,000 users over 50% of which are staying active on a monthly basis — this kind of thing isn’t achievable by pure luck or mulling things over in an ivory tower; you’ve got to get on the ground, test, tinker and learn.” 
—Adam Wills, Co-Founder of Farm.ink

Get comfortable finding your way without a map

Every one of our Amplify winners is trying to solve a problem that hasn’t been solved yet, at least not adequately. They are charting new territory and following their instincts in surprising directions.

Creative wayfinding is all about knowing how to make decisions about what’s next based on testing, observation, and feedback, rather than following the directions of antiquated best practices. With Amplify winner Shining Hope For Communities, we embarked on a journey of trying to solve for rampant gender-based violence (GBV) across Kibera without a manual.

After some research and brainstorming with the SHOFCO team, we set up anonymous reporting boxes across different areas of the slum — places where young women could tell SHOFCO in secret, on a little slip of paper, about the worst experiences of their lives. The sturdy steel boxes were locked and monitored by SHOFCO staff. Some elements of this rudimentary prototype worked, others didn’t. While reporting went up, we saw that boxes located next to trusted community members filled up quickly while those in less-traveled areas remained empty and were often vandalized. We knew we had something promising, but it wasn’t quite right yet.

First quick & dirty prototype of an anonymous “speak-up box” and what might go inside

SHOFCO continued to take steps forward into the unknown — working with IDEO.org to refine their GBV reporting system until all the components fit together just right. And today they operate GBV reporting systems across four slums of Kenya. The system allows anonymous reports via phone, within their clinics, to trusted community members, and via boxes in some cases as well. The SHOFCO gender department collected over 1,000 cases of sexual and gender based violence in 2017 alone and has a case-management and legal team shepherding each of them through the complicated judiciary process. Perpetrators have gone to jail, and Kibera is feeling just a little bit safer these days.

Final anonymous reporting box mounted within SHOFCO medical clinics, alongside messaging for other reporting options (in person reports & phone-based reports directly to SHOFCO staff)

The Amplify Program’s focus on trust, experimentation, and finding your way without a map, shows our winners that this is a real creative partnership, and we want them to test the edges of what’s possible. At IDEO.org, we are stubborn optimists by nature — we have to be if we want to stand a chance at solving the big, hairy challenges of global poverty. It’s how we know there is a better way for the nonprofit sector to work; a better way for funding to spur innovation. We believe a key component of the future of philanthropy is the proliferation of passionate collaborations between those who have money and want to do good and those on the ground giving it their all. 
 
 At the end of the day we are all, donors and grant recipients alike, just passionate people trying to do some good in the world. Why not get creative with it?

“All aid should be distributed in this manner. This method ensures organizations are ‘doing and learning ‘ organizations rather than just those that can replicate a logframe and write a well-written proposal.”
 — Amplify Winner