CHANGEMAKER SERIES: Impact Events
What is an Impact Event?
An impact event is a unique, measurable occurrence that demonstrates progress towards a social, environmental, or health goal. Examples of impact events include one solar panel installed on a household in Rwanda who previously did not have access to reliable (and clean) energy or vaccination of one child in Ethiopia to prevent tuberculosis.
Impact events are traded on the Proof of Impact Marketplace to facilitate the flow of capital between Impact Buyers — people who want to put money towards making a difference, and Impact Sellers — non-profit or for-profit organizations who provide quantifiable proof to demonstrate the impact they are creating in their communities.
Why do we need Impact Events?
Impact events are important because they make it easy to define and quantify positive social, health, or environmental good. We think of it as impact commoditization. Impact today is an amorphous idea, whereas an impact event provides a technical as well as an industry framework to define impact in a way that allows it to be bought or sold. This type of data-rich standardization will increase the flow of capital towards good and serve as a building block to quantify progress in solving some of the world’s toughest problems.
But what is wrong with the current system? Let’s take a look at the status quo — The Donation Model.
The Donation Model
We estimate that the size of the impact market is roughly $1 trillion dollars. This includes private donations, impact investing, and overseas development assistance. This may seem like a lot, but to put it in perspective, the global stock market is roughly $73 trillion dollars. We hypothesize that donations, as well as the broader impact market, make up just a fraction of the global financial markets, due to limitations in the donation model.
The donation model is something with which you are probably quite familiar, as demonstrated by the following example:
- You come across a social, environmental, or health cause or non-profit that is looking for a donation.
- You are emotionally moved by the cause, so you decide to give money to support it.
- The non-profit uses your donation to fund their operations.
- You get a thank you note/e-mail at the end of the year, asking you to donate more, without understanding exactly what your money achieved.
This donation model is what we call the impact “black box.” If you are diligent, maybe you get some sort of visibility through an annual report, website details, or evaluation technique like Charity Navigator. But by and large, you do not get transparency, attribution for your donation, or data-driven insights as to what your money accomplished.
The lack of transparency in the impact black box is unacceptable for broader financial products and markets, leaving the impact industry blocked from greater access to capital and mostly reliant on emotional arguments.
So how do we improve? The Impact Inventory Model
The Impact Inventory Model is based on turning impact into standardized, measurable chunks — Impact Events — and allowing organizations to sell those Impact Events as if they were physical products in a business’s inventory. Organizations (non-profits or for-profits) that are making a difference can deliver individualized proof by aggregating multiple sources of data (i.e., proof points) that prove they did indeed enact positive change. These proof points are standardized on the POI Marketplace and used as successful verification that back their Impact Events. The Impact Events become inventory that they can then sell to monetize their positive efforts. For example:
One impact event for a beach cleanup organization would be one pound of trash removed from the ocean or the beach. Each pound collected would be backed by multiple proof points. Proof points would include the weight of the trash bags removed from the beach, pictures of the beach trash collected, a geotag from the beach cleanup day, a timestamp collected, and a receipt from where the garbage was properly disposed. Beach cleanup organizations that are efficient, both at collecting trash off the beach, as well as tracking the data of their efforts, can effectively use their data to sell impact events on the Marketplace and in return receivefunding from Impact Buyers (i.e., donors or impact investors).
The Impact Inventory Model can serve as a valuable new funding mechanism for organizations who are already making a measurable difference in the world.
Impact Events and the Marketplace
Through the Proof of Impact Marketplace, impact buyers can now purchase unique Impact Events relevant to the causes they are most passionate about, with defined dollar values attached to each Impact Event they purchase. Each impact event will be backed by verifiable, individual proof that is one-for-one attributed directly to their dollar contribution. Granular level impact attribution through Impact events will provide the clarity and visibility needed to unlock more capital so that money can freely go where it matters most. The Impact Events on the Marketplace are mapped to the 17 Global Sustainable Development Goals as a framework so that impact buyers can see exactly how their contributions roll up to progress towards global goals. (To learn more about Sustainable Development Goals, you can take a look HERE.)
We are rapidly onboarding Impact Events on the Impact Marketplace to easily connect buyers and sellers of impact across social, health, and environmental sectors. Impact Events are critical in creating a more liquid and transparent impact industry and will be the fundamental building blocks of a variety of new impact investment vehicles of the future.
To learn more about Impact Events and projects that we are currently working with and the Marketplace, please visit Proof of Impact . If you want to read more technical details on Impact Events and how they fit into our vision for accelerating positive change and achievement of the Sustainable Development Goals, please read our white paper. If you have ideas for Impact Events you would like to sell, or if you would like to purchase Impact Events directly, please feel free to reach out to me!
In the name of change,
KDP
