By Geoff Davis, CEO, Sorenson Impact Center
Recently, a physicist at the University of Utah asked one of my Sorenson Impact Center colleagues whether the term “impact” is the right word to describe the work that we do in impact investing. He mentioned that in physics impact is the force transmitted when two bodies collide, often with violent consequences. That got me thinking.
Wikipedia says, “An impact is a high force or shock…when two or more bodies collide….The effect depends critically on the relative velocity of the bodies to one another.” That’s something to ponder. Even though the impact industry uses the term “impact” as shorthand for intentional, positive, social and environmental impact, could we be thinking more deeply about who is impacting whom? And what type of force is being transmitted? And who determines the force? And what are the relative velocities?
As I pondered these questions, the immortal words of Aretha Franklin, the Queen of Soul, came into my mind: “Who’s Zoomin’ Who?” (If you haven’t heard it for a while, take a little break and listen to it now).
I brought up these questions earlier this month at a Jeffersonian dinner with twelve other impact leaders that I co-hosted with Matthew Bishop (the former Business Editor at The Economist who now chairs the Sorenson Global Impact Leaders). This led to a lively discussion with a variety of well-reasoned perspectives and informed my thinking further. Here are some of those thoughts.
As in physics, social impact involves a causal relationship: there is the “body” who creates the impact by transmitting a force onto another “body.” This is rarely mutual or balanced and there is an inherent power dynamic at work. Remember the physics principle: “the effect [of the impact] depends critically on the relative velocity of the bodies to one another.” Impact investors in particular, as sources of capital, often have (or are perceived to have) significantly greater “velocity” than the “body” receiving the funding. If we truly care about intentional, deep, positive social impact, then we need to understand and manage this dynamic to ensure it is not abusive, exploitative, or paternalistic.
For example: who decides what counts as a positive impact? Is it the impact investor, imposing an intended outcome on intended beneficiaries based on our own beliefs and values as a way to make ourselves feel good? Or are we genuinely collaborating with the communities we seek to help to determine root causes and solutions, and meet the community’s true needs and desires?
This is much more than semantics or woke, progressive, coastal-elite mumbo-jumbo (I happen to live in Utah, for starters). As Einstein said, “We can not solve our problems with the same level of thinking that created them.” If we don’t understand and pay careful attention to the power dynamics at play in our impact work, we can easily and unknowingly use repackaged versions of the same thinking that caused many of the problems we’re trying to solve.
An unrecognized, paternalistic, top-down approach can undermine the noblest intentions by imposing impact in ways that are alien to those who are supposed to benefit. To ensure that we’re creating impact that is wanted, effective and valued by the intended beneficiary, it is far better that we strive for a collaborative and inclusive approach. Maximizing the involvement and ownership of the communities we serve in the impact investment decision-making process is the best way to truly understand needs and ensure that our investments create a sustainable and lasting impact. The recent increase in funding to underrepresented founders and fund managers is a great start, and needs to continue.
As impact investing continues to grow and gain momentum, let us take time to pause and consider some of the philosophical, moral, and practical questions that underlie our endeavors. By doing so, we can challenge our biases and paternalistic perspectives, foster true empowerment, and work towards a world where everyone is valued, communities and ecosystems prosper, and the measured impact of our actions guides our decisions. To start, let’s ask ourselves: “Who’s zoomin’ who?”
