Days after Russia invaded Ukraine in February 2022, the UBS Optimus Foundation launched the Ukraine Relief Fund for UBS employees and bank customers to donate to support young people affected by the war.
But the question was how to identify the organizations on the ground that would make the most effective use of the fund’s money. The foundation was developed at the time by founders Jason Saul and Phyllis Costanza to transform social impact into “verified impact units” (VIUs) that can be measured, priced and sold to donors. I took note of his OutcomesX marketplace.
When OutcomesX launched in April 2023, a deal was signed to send $2 million in proceeds from the foundation’s purchase of VIU to local nonprofits providing education and mental health services to children in Ukraine. I was there.
The new market relies on data from the Impact Genome Registry (IGR), an independent organization that defines measurable units of progress on societal issues and goals, such as one of the United Nations’ 17 Sustainable Development Goals .
Nonprofits report to the IGR their progress, for example, making 1,000 households food secure. IGR evaluates data using peer-reviewed, evidence-based criteria to validate and determine units of social impact. IGR currently has 2.2 million social programs registered and over 3,900 verified.
Donors specify a cause and region, and the OutcomesX team finds matching results in IGR that match their request. If a donor would like to fund a cause rather than a single nonprofit, OutcomesX can also create a portfolio of her VIUs from a variety of nonprofits. The donor pays for the units in addition to her 5-15 percent commission to OutcomesX.
This approach turns traditional financing on its head. Rather than funding nonprofit programs whose results are not yet proven, donors can pay for results that have already been achieved and verified. Nonprofits receive the full amount paid for the units without producing expensive and time-consuming impact reports.
Donors only pay for verified results, reducing the risk of funding ineffective organizations. “This is a more accurate and efficient mechanism for obtaining results,” says Saul, who developed IGR and is also executive director of the University of Chicago Impact Science Center.
Given the type of grant the Ukraine Relief Fund wanted, OutcomesX was an attractive solution. “It can be difficult to identify grassroots organizations with strong track records,” says Marissa Loeffler, executive director of humanitarian aid and global health at the UBS Optimus Foundation. “The purchase results increase our confidence that our funds are having the intended impact.”
In addition to ensuring that donor funds visibly contribute to solving social problems, the OutcomesX team wants to help small nonprofits with the challenges they face when raising money. thinking about. Without a marketing budget, web administrator, or development team, many businesses struggle to compete for funding. “The average cost of fundraising for nonprofits is $20 for every dollar raised,” Saul says. “So the deck is stacked against small nonprofits.”
One potential challenge for donors using OutcomesX is that they may feel disconnected from the cause if their donation takes the form of a VIU purchase. OutcomesX hopes our partnership can help bridge this comfort gap. For example, if you’re a company using a marketplace for employee giving, our partnership with Benevity, a Canadian-based donation management platform used by over 900 companies, allows OutcomesX donors to Benevity provides connections with volunteering and other involvement opportunities.
Partnering with Benevity will also help OutcomesX with its next goal: attracting more donors to the market. “Our infrastructure is ready to scale and we will scale quickly as the market moves,” Saul says.
Costanza believes that nonprofit organizations that are most effectively solving social problems should receive the most funding, regardless of size or brand name. “We sincerely hope this will create more equality and level the playing field,” she says.
support SSIRhighlights cross-cutting solutions to global challenges.
Help us bring more innovative ideas to life. Please donate now.
Read more stories from Sarah Murray.