The Difference Podcast: Elizabeth Funk, Dignity Moves “Does the person have a solid floor? And are their kids, particularly their girls, in school?” Those were the only two questions Elizabeth Funk's loan officers asked. Not income surveys. Not a poverty line that people somehow run across. Two visible, simple things a loan officer could check with their own eyes on a village visit. That's the whole lesson of this episode, and it's one of the clearest examples of simple impact measurement we've recorded for this podcast. Elizabeth Funk is one of the early pioneers of impact investing. She founded the Dignity Fund back in 2001, before the term “impact investing” had even been coined, spent eighteen years running impact investment funds focused on microfinance, and is now the force behind Dignity Moves, building interim housing for people experiencing homelessness in the US. Her story is one of the case studies in Chapter 9 of the book. This is the conversation behind that chapter. Two truths and a lie Elizabeth gave us three: she raised her children in Paris, she used to be a competitive figure ice skater, and the performer Sting was an investor in her first fund. Listen to the end to find out the truth! Why two measures, not twenty When Elizabeth started the Dignity Fund, nobody had worked out how to measure whether microfinance borrowers were actually better off. A poverty line sounds simple until you try to apply it to a community trading rice for milk. So, she and her loan officers landed on two things instead: a solid floor in place of a dirt one, and children, especially girls, in school. Both measures were visible, needed no accounting, and could be checked by loan officers who were themselves often unable to read or write. Both also captured more than they measured directly; health, cleanliness and intergenerational prosperity were wrapped up in that one solid floor, just as health, education and long-term opportunity were wrapped up in getting girls into school. We talk about how she resisted the pull toward overcomplication, and the conversations with those loan officers that got her there. Where you sit on the spectrum, and saying so on day one Elizabeth describes impact as a spectrum, from pure philanthropy at one end to for-profit businesses with a bit of greenwashing at the other, and argues that everywhere on it is valid. What matters is deciding where you sit before you're in the boardroom, not during it; otherwise, every difficult decision becomes a fight between impact and profit that was never properly settled in the first place. The measure that was wrong all along Homelessness programmes are traditionally scored on how fast people move into permanent housing, but Elizabeth argues that's exactly the wrong measure. It rewards getting one person into a million-dollar apartment over getting fifty people into safe, private, immediate housing. She's rebuilt Dignity Moves' metrics around something closer to the truth: are people sleeping, showering, connected to their families, and thriving, regardless of whether their housing is “permanent.” Listen now Elizabeth Funk is the founder of Dignity Fund and the force behind Dignity Moves. Her case study features in The Difference: How to Understand, Measure and Maximise Social Impact, out now. The Difference Podcast is hosted by Matt Stevenson-Dodd and Helen Gregg.
