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Thank you co-founder Daniel Flynn says current efforts to end poverty are doing more harm than good

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Social enterprise Thankyou tackles a new problem that touches the core of its own existence

Founded in 2008 to fight poverty, the company has since donated $17 million to organizations around the world fighting global poverty.

But co-founder Daniel Flynn said one thing he’s learned over the past 14 years is that sometimes solving one problem creates a new one.

So he challenged himself and others to rethink philanthropy in a 7 minute video titled Donor dysfunction: ‘The donation system is broken and we helped break it’arguing that traditional philanthropic systems designed to end global poverty can actually do more harm than good.

The video explains Thankyou’s experience as a financier and how well-intentioned donors can sometimes do that unconsciously hinder the success of communities living in poverty.

For example, projects with apparently larger numbers or tangible solutions that make sense to financiers are more attractive to finance. This leads to a lot of social companies and companies that only care about solutions that resonate with customers, rather than what is really needed.

“As a donor, when you’re the one with the money, you can feel like you’re in the driver’s seat,” Flynn said.

“But what if you give a heart surgeon money and then tell him how you want to have that surgery done because it’s your money? Bizarre as that may sound, this is the best picture we can paint to describe where much of the funding for the global development sector, and many others, is located.

“As we started asking questions and learning from effective and experienced philanthropic organizations and our impact partners, we realized that we were unconsciously part of the problem.

“During this process, we became aware of the areas where we were so wrong. It was then that we realized we had no choice but to change our entire impact model.”

Flynn and his team looked at research analyzes examining donor dysfunction, including: a 5-year study on “what goes wrong” in impact-oriented projects. It found that financier-created obstacles are responsible for 46% of the financial challenges organizations face, which exceed: more well-known issues such as fraud, theft and conflict, each accounting for about 4% of funding leaks.

Flynn said the research suggests that instead of limiting how impact-driven organizations can use donations, donors should: aims to empower these organizations by giving them unlimited funds to do innovative work within the development sector — for greater, exponential impact. †

Speaking of which, Thankyou has shifted its endowment model to unlimited funding in 2020 – $8 million to 16 impactful partners around the world.

“’We believe that unrestricted funding supports innovative pathways and approaches to scale social impact this world needs to see. So we’re going for it,” he said.

“We look forward to seeing who will join the movement in the coming years and to see donors supporting a revolutionary call for change, for revolutionary results.”

The social impact company joined more than 800 global foundations that pledged to offer flexible funding during the COVID-19 pandemic, with most pledging to continue to provide unlimited funding on a permanent basis. Among them are the Mulago Foundation and Mackenzie Scott, which last year donated an unfettered $2.67 billion in unrestricted funding to organizations that drive change.

Here is the thank you video

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