As the fuss over the Federal Government’s $443.8 million funding grant to the Great Barrier Reef Foundation has highlighted, the public is increasingly interested in where charities are spending their money and, in particular, how much is actually going to aiding their specified causes (think, perhaps, of the times you or someone you know has been talked out of donating to charity because “most of it goes to paying staff anyway”).
Australian startup The Impact Suite, founded by Darren Howlin, Peta Tilse, Connah Cutbush, Chris Eigeland, Sandra McCullagh, and Kevin Kan, believes there is a “trust gap” in the philanthropic sector and is looking to bridge it.
As Tilse explained, the platform hones in on the notion that while donors want to give to organisations that deliver – or aim to deliver – on their charitable purpose, the sector often gets bogged down in debates around administrative costs.
The startup’s solution is a “sustainability measure” based on the visual of the lotus flower, which analyses an organisation’s purpose, people, processes, impact, and review.
The idea is based on combined decades of experience in the charity sector, with the founding team all having worked in the sector in some way – whether it be starting a charity at university, as Eigeland did, or working to advise charities on finance – for most of their careers.
“Darren and I came at it from originally an investment angle after I joined the board of a foundation and was sitting on the other side of the table. But as we began to think of a fintech solution, we soon realised there were bigger issues. More research, and bringing Chris and Sandra in, uncovered the trust gap factors,” Tilse said.
“We knew we could make a difference, and so we designed and developed what is now The Impact Suite.”
A charity wanting to obtain a Lotus Rating will need to answer a survey, with The Impact Suite then analysing their responses and other information to generate their Lotus Rating, or profile listing.
As the startup sees it, a charity with its focus in the right place can use The Impact Suite to help get this fact across to the public.
“Our vision has always been to move away from the administrative expense discussion and focus on impact. We believe charities have struggled with this. Brain cancer surgeon Charlie Teo famously left a charity he founded, and pointed out that 98 percent of donations to the largest charities go on expenses instead of purpose. That’s where we see The Impact Suite helping,” Tilse said.
“If you are focused on your purpose, have the right people with skill sets – or developing their knowledge – have processes which include AGMs and committees that meet, measure your impact, and review internal policies, then you shouldn’t have staff flying first class to conferences and wasting donor money. It’s hard for a good charity to communicate all of that, and that’s what our platform helps them do.”
While The Impact Suite can analyse charities based on available information, a full profile requires them to answer the startup’s survey.
The startup has sought out charities to do this in a number of ways; one has been to approach philanthropists and their foundations and industry stakeholders, for example, who Tilse said ask a lot of the same questions to a charity before giving grants.
“What we can see now is these groups are actually asking these charities to get their rating as part of the process. It’s a bit more of a public declaration of their organisation’s governance, sustainability, and effectiveness,” she said.
The startup now has “a regular flow” of charities getting in contact.
A user wanting to search for and learn more about a charity can simply click on ‘Check my charity’ and search for what they’re looking for. A charity’s listing details their revenue and expenditure and how they compare to other charities in the sector on these figures, their staff numbers, and where they operate.
The listing also includes information about their activities, purpose, and impact and diversity statements.
Users can also rifle through the ‘Analytics’ section, a benchmarking tool that looks to determine how effective and sustainable charities are across each sector. In development is a donor portfolio tool that will look to help donors spread their donation impact.
With around 56,000 charities and not-for-profits registered in Australia, Tilse said the startup will look to monetise the platform by providing charity service providers with tools to allow them to better price their services. Corporates are another market given the increasing focus on corporate social responsibility.
“Some have programs around matched donation strategies, but some struggle with meeting their objective. A good example is the Brisbane floods in 2011 and 2013, where corporates wanted to donate, but were precluded from donating to government campaigns,” Tilse explained.
“This is because they can appear to be serving another purpose, or business favour. Utilising The Impact Suite search can help a corporates identify a charity that is focused on a program, making sure donations to flow to the cause.”
Having self-funded the development of the platform so far, aided by an Ignite Ideas grant from the Queensland Government, the startup is now preparing to raise funding to support further development and appoint a CEO.
As well as the donor portfolio feature, Tilse said the startup is building other related applications to help charities with governance and transparency.
“There are over 56,000 charities in Australia, and we want to utilise technology to enable a charity that can be located anywhere in Australia, removing big city bias. Everyone one of these can have the opportunity to grow and make greater impact.”
Image: The Impact Suite team. Source: Supplied.