In this post I will argue for impact purchase as a complement to (not a replacement for) other funding mechanisms, such as grants.

What is impact purchase?

Impact purchase is an alternative funding mechanism for altruistic work. I think the easiest way to explain what impact purchase is, is to compare it with grants.

\begin{matrix} Grant & Impact Purchase Evaluate the project before & Evaluate the project after it starts & it is completed The amount of money is based & The amount of money is based on the expected costs & on the estimated value Enables projects & Rewards projects \end{matrix}

For a more thorough explanation, and an actual example, read this excellent blogpost.

About this blogpost and the next one

This is part one of what I intend to be a two part blog post series. The second part will be significantly more work, so I’ll do that if this one gets enough interest.

Part 1 (this blogpost) will focus on the timing aspect of impact purchase, i.e. why it is sometimes better to evaluate and fund a project after it is finished.

Part 2 (next blogpost) will focus on the whys and hows of paying for value rather than cost. Most of my suggestions regarding implementation will be in this post.

Disclaimer
So far, my only investigation into this previous attempt to implement impact purchase, was to look around at their now inactive website. I don’t even know why the project ended. If someone could supply more information about this in the comments, that would be great. Otherwise, I will try to find out more for part 2.

Comment request
I am arguing a lot from my own experience and perspective. I hope that other people who want impact purchase to become a thing, will add their stories in the comments, or even just indicate that this is something you would apply for. I think this is relevant both to see how widespread the interest for this is, and what sort of projects it would support.

Reasons to evaluate a project after it is completed

I think the best part of impact purchase is that projects are evaluated after they are done.

You might think that this would be great for the funder (because it is much easier for them to know what they are paying for) but less great for potential recipients (because they now get to take all the risk). If that is how you think, then this should surprise you: I’m a potential recipient and I love the idea of having the funding application happen after the project. I don...

Markets for altruism

Further reading

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