Will the money-back guarantee win over wealthy donors?

A brilliant book is making its way into the homes and offices of America’s wealthiest people. Inside is a charity launch that aims to raise up to $6 billion for nonprofits fighting global poverty.

The proposition? Donate and get results, or your money back.

The advocacy group Global Citizen and the financial firm NPX are designing this campaign. It targets Forbes 400 billionaires, members of the Giving Pledge and the wealthy in general, a group increasingly criticized for what is seen as a tight budget. The campaign recently launched with dinners, meetings and an ad in the Wall Street Journal that asked, “Will you donate…if we get results?”

Initially, the effort aims to raise at least $150 million through six $25 million funds. Each of the programs could absorb up to $1 billion, according to campaign officials.

The push is an unusually large effort to tap into two big sources of capital: the wealth of individual philanthropists and the funds amassed for impact investing seeking social and financial returns. It’s also a test of whether a “pay for results” model can get millions of dollars that are earmarked for social good but are left out, including more than $1.3 trillion in foundation assets, $160 billion in advised funds by donors and an estimated $700 billion managed by impact investing companies.

Many high-net-worth people worry that their money isn’t being spent well or isn’t getting results, says Lindsay Beck, co-founder of NPX. They declare themselves ready to give, if they see a clear line in the results.

“I heard that in a lot of one-on-one meetings,” says Beck. “And that is what we are solving here. We’re saying, ‘OK, here are the results.’”

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The “pay for results” financing plan would work like this:

Donors would commit to donations, but the money would be released only when measurable results are achieved. For example, a $500 gift can be awarded for each woman lifted out of poverty. If the nonprofit organization does not meet its goals, donors may switch donations to another project or organization.

In the meantime, NPX and other impact investors would lend the money for the program’s expansion. Their reimbursement, which would be based on donor cash, would also be based on results. If the results were high, the profitability would be high and vice versa.

Five non-profit organizations are involved:

— BRAC will expand a program to lift 50,000 female-headed families out of poverty in Bangladesh.

— Solidaridad: water to supply drinking water to 500,000 people.

— The Global Fund to scale up malaria care to treat an additional 5.1 million cases.

— The International Rescue Committee to educate 300,000 young out-of-school children in Bangladesh, Nigeria and Niger.

— The One Acre Fund to work with farmers in Ethiopia, Kenya, Malawi and Rwanda to increase food supply and afforestation.

Global Citizen and NPX reviewed these programs to ensure their results were supported by evidence and could scale quickly. Research on International Rescue’s tutoring program, for example, found that third graders gained a year and a half in reading comprehension and reading aloud fluency after 21 weeks of instruction. The cost: $63 per child.

The capital to take these programs to scale is all that is needed, NPX’s Beck says. “Solutions exist. We know how to bring access to clean water. We know how to educate children. We know how to increase food safety. We know how to plant trees and sequester carbon.”

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For many years, Global Citizen has advocated for increased government spending to address the UN’s Sustainable Development Goals by 2030, according to Mick Sheldrick, the organization’s chief policy officer. More recently, he tried to persuade the wealthy to open their wallets through a Give While You Live campaign, urging the world’s billionaires to donate 5% of their wealth each year to important causes like COVID-19 relief. .

Linking donations to results could motivate great philanthropy in ways never seen before, says Sheldrick. “This is a case study. The potential really is limitless if it works.”

Each of Global Citizen’s proposed deals would create a funding deal similar to a “social impact bond.” Typically, with impact bonds, private investors provide seed money for an effort in climate, social services, and the like. A municipality or a regional or national government agency reimburses the investor, with interest, based on the success of the program.

The proposed Global Citizen Impact Bonds are unusual both in size and in the role of philanthropy paying for results, says Emily Gustafsson-Wright, a senior fellow in global economics and development at Brookings. If completed, she adds, it would be the largest results-based program in which philanthropy alone provided the funding for results.

The Quality Education India Development Impact Bond, which aims to improve outcomes for more than 200,000 primary school students, counts only philanthropy among its outcome funders. They are the Michael and Susan Dell Foundation, Comic Relief, the Larry Ellison Foundation, and the Mittal Foundation. But their combined commitment is only $9.2 million over four years.

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Presented together, Global Citizen’s six funds are meant to make donors an offer they can’t refuse. “To be honest, it removes an excuse not to give,” says Sheldrick. “A donor cannot say: ‘You don’t cover my problem’”.

Chris Stadler, president of Global Citizen and managing partner at private equity firm CVC Capital Partners, said he plans to make a seven-figure contribution between a donation and an impact investment. Investors will like programs that are proven, Stadler says, meaning there is little risk to their principal. Donors will appreciate that their money pays only for results.

“We’d like to help connect people who are struggling to find impact that can scale,” says Stadler.

Global Citizen and NPX hope that executives in the financial industry will be attracted to the model, but also the wealthy in general. NPX donors include five Giving Pledge members: Richard and Joan Branson; Charlie and Candy Ergen; Gordon Gund (who signed the engagement to his late wife, Llura); Lyda Hill; and Pierre and Pam Omidyar.

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This article was provided to The Associated Press by the Chronicle of Philanthropy. Drew Lindsay is a senior writer at Chronicle. Email: [email protected] AP and Chronicle receive support from the Lilly Endowment for coverage of philanthropy and nonprofits. AP and Chronicle are solely responsible for all content. For all AP philanthropy coverage, visit https://apnews.com/hub/philanthropy.