Impact by Design

The impact investing market has grown at an average of 21% year-on-year for the past six years. And yet more than 60% of impact investors consistently cite impact washing as their number one concern. More capital is moving under the label of impact but the confidence that impact is actually happening continues to decrease. 

That tension opened CSP's recent webinar Impact by Design, led by Bjoern Struewer, Founder & Co-CEO, and Maxime Cheng, Lead Growth & Partnerships at Roots of Impact, and facilitated by Aisha Bohat, CSP's Director for Training and Programs (APAC).

More money is not the answer

Nearly $800 billion is spent annually on the philanthropic side. And despite evidence showing the most effective interventions could deliver up to 10x more impact if properly resourced, they receive less than 5% of the available funding. The conclusion, as Maxime Cheng put it plainly: simply pouring more money into what we call impact does not always lead to more impact. What matters is how capital is structured, governed, and incentivized from the outset.

What is impact by design?

Roots of Impact defines it this way: impact by design is about using capital deliberately and strategically to enhance positive outcomes. It embeds impact creation from the onset so that positive outcomes are generated through intentional design, not by accident. It spans the full capital spectrum: philanthropy, blended finance, and impact investment, seeking direct, indirect, and systemic outcomes at every level. (read why impact by design to learn more)

Five strategies that put it into practice

Bjoern Struewer walked attendees through five approaches that, alone or in combination, increase the likelihood that capital creates the outcomes it intends.

1. Unlock innovation and keep it on impact track. The most transformative ideas are often the most underfunded. But funding a breakthrough is only the starting line. Without active stewardship, mission-driven organisations drift. Struewer's example was pointed: OpenAI began as a mission-driven firm. It is now a commercial business. Backing what can change the system requires both the capital to seed it and the governance to keep it on course.

2. Scale with evidence, not just momentum. A growing company is not the same as growing impact. As organisations raise capital and fulfill investor requirements, they often move upmarket, leaving behind the very people who stood to benefit most. The alternative: bridge the evidence gap first, confirm impact is embedded in the business model, and then scale. Impact and revenue should grow in lockstep.

3. Sustain capital by making it catalytic. Philanthropic capital doesn't have to be spent once. Deployed as catalytic investment in high-impact enterprises and recovered over time, it can be redeployed again and again, compounding impact per dollar rather than depleting it. Struewer also highlighted a specific tool from Roots of Impact's own practice: SAFI (Simple Agreement for Future Impact), a revenue-based financing instrument where the repayment cap decreases as impact targets are met. A direct, built-in incentive for mission delivery.

4. Enable beyond finance. Financial capital is only one resource a funder brings. Social capital, intellectual capital, networks, and expertise (see multicpital strategies) can all amplify it. A family office engaging in the same sector as the family business, and leveraging industry relationships alongside its funding, can multiply impact in ways money alone never could.

5. Link finance directly to impact. Design financial terms that reward impact achievement. This applies equally to how technical assistance is structured: rather than sending a consultant to tell an organisation what to do, Roots of Impact practices results-based technical assistance, rewarding organisations for what they achieve. If a company develops its own gender action plan, it earns a reward for it. The organisation owns the strategy from day one.

The takeaway

The gap between capital deployed and impact created is a design more than a resrouce problem. The tools and frameworks to close that gap already exist, what's needed is the intention to use capital not just toward impact, but through structures built to deliver it.

This webinar is part of CSP's ongoing series with Roots of Impact. 

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