The document proposes a program called "Guaranteed Impact" that would provide impact insurance for charitable donations. It would work as follows: donors pay a small percentage of their donation amount as an insurance premium up front. Then an independent third party evaluates whether the charity spent the money effectively. If so, the donor's premium is partly refunded to the charity. If not, the donor gets their full donation amount back. This program aims to encourage more donations to innovative but unproven charities by mitigating risk for donors.

1. Submi&ed
by
Daniel
Blumberg,
Dave
Goodman,
and
Anna
Hurley,
Zicklin
School
of
Business,
Net
Impact
Chapter

2. In
our
society
we
guard
against
all
sorts
of
risks—car
accidents,
illness,
floods,
job
loss—so
why
not
guard
against
the
misuse
of
our
charitable
donaGons?
By
offering
Impact
Insurance,
we
acknowledge
the
reality
that
giving
money
away
is
risky,
just
as
it's
risky
to
invest
in
the
stock
market.
Stock
market
investors
demand
a
return
on
their
investment.
However,
many
charitable
donors
do
not.
Guaranteed
Impact
would
change
that
mindset.

3. • Decision:
Jesse
wants
to
donate
$10,000
to
fight
poverty.
He
is
choosing
between
“ Tried
&
True
OrganizaGon”
and
“Game
Changer
New
OrganizaGon.”
• Dilemma:
Jesse
is
excited
about
Game
Changer’s
potenGal,
but
is
afraid
of
wasGng
money
on
an
unproven
organizaGon.
• Solu-on:
Game
Changer
is
a
“Guaranteed
Impact”
organizaGon.
Jesse
is
offered
“Social
Impact
or
Your
Money
Back.”

4. • Jesse
pays
5%
($500)
to
Guaranteed
Impact.
(The
percentage
is
based
on
the
charity’s
expected
impact.
Higher
premiums
will
be
paid
for
unproven
organizaGons.)
• A^er
1
year,
Guaranteed
Impact
(or
a
respected
3rd
party)
will
determine
whether
Jesse’s
money
has
been
spent
wisely.
– If
Jesse’s
money
IS
spent
wisely:
Guaranteed
Impact
will
donate
half
of
Jesse’s
$500
to
Game
Changer
and
keep
the
remaining
half
to
cover
administraGve
costs,
payouts
on
other
policies,
and
to
make
a
small
profit.
– If
Jesse’s
money
is
NOT
spent
wisely:
Jesse
gets
his
$10,000
back,
courtesy
of
Guaranteed
Impact.

5. • Enables
more
risk-­‐taking:
Guaranteed
Impact
encourages
donors
to
give
to
innovaGve,
but
less
well
known,
organizaGons.
• Carrot
&
S-ck:
(Carrot)
If
an
organizaGon
performs
well,
it
receives
half
of
the
insurance
premium
paid
by
the
donor.
(SGck)
If
an
organizaGon
does
not
perform
well,
its
insurance
premium
will
increase
or
the
organizaGon
could
be
removed
from
the
Guaranteed
Impact
program.
• Guarantees
are
impressive:
The
markeGng
value
of
a
guarantee
is
very
strong.
Even
people
who
do
not
elect
to
pay
for
impact
insurance
will
be
impressed
by
the
“Social
Impact
or
Your
Money
Back”
guarantee.
• Raise
awareness
of
impact
metrics:
Guaranteed
Impact
will
use
the
latest
social
impact
evaluaGon
metrics.
We
are
guaranteeing
social
impact.
We
are
not
necessarily
promising
low
overhead.

6. 1.)
Partner
with
a
major
insurance
company
to
acquire
appraisal
&
actuarial
experGse
needed
to
run
Guaranteed
Impact.
Benefits
for
the
insurance
company:
• Corporate
Social
Responsibility
–
Guaranteed
Impact
will
enhance
the
insurer’s
image
• PotenGal
profits
–
Guaranteed
Impact
is
designed
to
be
economically
viable
• New
customers
–
Customers
who
purchase
“Impact
Insurance”
will
be
more
likely
to
purchase
auto
or
home
insurance
from
the
same
company
2.)
Pilot
the
program
by
inviGng
50
innovaGve
social
organizaGons
(in
need
of
fundraising
help)
to
be
a
part
of
Guaranteed
Impact’s
test
phase.

7. 3.)
Launch
MarkeGng
Campaign
• The
campaign
will
encourage
more
risk-­‐taking
in
giving,
feature
some
of
the
innovaGve
organizaGons,
and
promise
“Social
Impact
or
Your
Money
Back”
• Guaranteed
Impact
Seal.
The
organizaGons
will
display
the
“Social
Impact
or
Your
Money
Back”
pledge
on
their
websites.
4.)
Evaluate
and
Expand.
Once
Guaranteed
Impact
is
shown
to
be
viable,
double
the
number
of
organizaGons.
Then
double
it
again…

8. • Student-­‐organized
effort
will
encourage
universiGes
to
place
at
least
2
%
of
their
endowments
into
Social
Investments
• Dual
goals
of
educaGng
future
leaders
(the
students)
as
well
as
shi^ing
dollars
from
passive
to
acGve
• UniversiGes
are
implicit
donors
by
accepGng
lower
returns
for
socially-­‐screened
pornolios
• The
"screening"
tool
is
archaic,
ineffecGve
and
fiscally
irresponsible.
• >
$400
Billion
in
University
endowments
in
2008

9. • Social
Investor
Rewards
is
a
program
offered
through
credit
cards
• ParGcipants
use
their
credit
cards
to
donate
to
organizaGons
they
expect
to
have
high
social
impact
• The
lending
insGtuGon
promises
to
match
a
predetermined
sum
in
donaGons
to
the
highest
performing
social
impact
organizaGons

10. • The
“Why
We
Don’t
Just
Give”
campaign
features
prominent
impact
investors
telling
their
stories
of
how
accountability
and
measurement
transforms
lives
• CelebriGes
featured
in
short
video
vigne&es
might
include:
– Brad
Pi&:
Make
it
Right
– Christy
Turlington:
Global
Fund
– John
Legend:
Show
Me
Campaign
• Vigne&es
will
be
widely
distributed
on
the
web,
radio,
and
tv
and
conclude
with:
“Learn
more
at
MarketsForGood.com”