Ideas
Matthew DeCamara

The Multiplier Effect & Exponential Societal Results

Burgess COMMENTARY
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Peter Burgess

The Multiplier Effect & Exponential Societal Results

Charitable organizations and nonprofit networks pursue very ambitious, important and powerful missions that address societal challenges at local, national and global levels. The range of efforts and strategies is both impressive and daunting, such as ending homelessness, combatting hunger, solving diseases, accelerating student achievement, protecting the environment and assisting global development. Yet, realities continue to overwhelm individuals, families and communities everywhere given widening disparities in key areas that increasingly affect many segments of our society.

As the “degree of difficulty” for these issues intensifies, so must our resolve – and our creativity – to drive progress that truly creates opportunity for all. No mission is more important. I believe organizations and networks can – and must – find the market-based multiplier in their model that exponentially increases the velocity of impact, growth and results.

How?

Given the urgency, we can no longer simply pursue additive strategies that affirm 1+1=2 … or even 10+10=20. We must now develop formulas that prove 10x10=100 or even 100-squared=10,000. Whether it’s through new or expanded markets, channels, services, donors or partners, these models should identify, aggregate, align and unleash the totality of resources, relationships and assets across one’s ecosystem to solve our greatest challenges.

When these ecosystems – now smarter, faster and stronger – collide with other ecosystems on a similar trajectory, disruptive breakthroughs and innovations emerge. Big opportunities develop too. Together, these cross-sector efforts are more poised to ambitiously affect change in pervasive areas, such as income inequality and race relations in the U.S. or youth engagement and women’s rights around the world.

Such a market-based approach will also generate significant value back to the charitable organizations or nonprofit networks whose leadership spearheads the change. Imagine more visible and valued brands, attractive and funded investment packages, and future programmatic or policy breakthroughs.

Fundraisers – and strategists – value zeroes in big numbers because the multiplier effect can exponentially change models. Over time, the mutually-reinforcing nature of charitable missions and market-based partnerships will dramatically expand capabilities, unlock productivity and drive innovation, while closing the alarming disparities in society to ensure opportunity for all is truly possible.

I was attracted to this post because of its title ... The Multiplier Effect and Exponential Societal Results My training in economics in a Keynesian environment taught me about the multiplier effect in theory, bit it is hard to observe this in advanced economies as in Europe or North America. Some of my work over the years has been in extremely poor settings and in these environments, the immense value of the multiplier effect can be observed. The World Bank and other development projects have a huge multiplier effect as they ramp up their projects ... but sadly, they have the same effect in reverse as they close them down, Analytical rigor is important ... and these multiplier effect rarely get mentioned in the economic analysis. The exponentials of social benefit should be possible, but sadly, social benefit cannot behave in quite the same way. There are system issues. The metrics for social benefit are poor, if they exist at all, and there is no mechanism for good to move through the economy in the same way that money moves through the economy. There are currencies and banks for the money part of the economy. There is nothing like this for the 'good' part of the economy. Simply put, we ought to be able to have exponential progress in the social dimension of the global economy ... but the metrics to encourage this are missing ... and the system infrastructure to enable it are missing as well. In my world view, there ought to be a continuum through all organizations that engage in economic activity ... whether charities or for profit businesses or government agencies. In the end they all use resources and they all have impacts. I want to see a uniform system of metrics that works for all types of organization. Those with the power to allocate resources should have meaningful data about the performance of all organizations on a uniform basis so that in the end everything that is worthwhile can get funded. Every organization does some form of money accounting, they all ought to do some form of impact accounting on a uniform basis as well. Talking about this is relatively easy. Designing a system to do this is not. I am trying. This essay describes some of my thinking: http://www.truevaluemetrics.org/DBpdfs/MDIA/TVM-Short-Introduction-to-7D-Capitalism-and-MDIA-141212a.pdf