Investment Allocation

While traditional funders tend toward privacy and confidentiality, Slingshot knows we cannot recondition the charitable giving landscape without being clear about who we are working with, why we chose them, and the results they are achieving. Transparency is critical to promoting a results-driven poverty-fighting ecosystem, and Slingshot models that with clear reporting of the investments we make and the returns in poverty reduction we believe are possible with each.

In 2017, Slingshot’s first year, we partnered with four nonprofits. That year, our goal was to raise and invest $500,000 before year-end. We did it! This was made possible by 54 investors.

In 2018, Slingshot expanded its portfolio, adding six more organizations, bringing our total number of partnerships to ten. Our goal was to raise and invest $1 million before year-end. We did it! Nearly 300 individuals made this happen. 

In 2019, Slingshot expanded again working alongside seventeen organizations. With the support of over 400 individual donors, Slingshot invested $1.41 million to amplify the poverty-fighting work of our partners.

Investments are made on an annual basis and depend on a number of variables, including Slingshot’s ability to raise funds in the community, the performance of any given partner organization, the emergence of promising new partner organizations who might compete for our limited funding, and the budget or needs of any given partner organization.

Rules & Guidelines For Allocating Monies
When making investment allocation decisions, we consider multiple factors. For example, how does a partner organization perform in the Slingshot Impact Assessment? If this is the second year (or beyond) of assessment, how has their performance changed over time? Further, how does an investment decision for a given organization stand in relation to Slingshot’s overarching investment strategy, in terms of diversification, risk, or expected return? 

We also employee several investment guidelines to protect our mission, and most importantly, to protect our neighbors. A few examples include: 

"Good Steward" Responsibility
If some target population consists of individuals for whom a loss of philanthropy-provided benefits might be costly, Slingshot will allocate its resources in ways that properly take into account the consequences for those individuals, including the potential sacrifice of well-being they will suffer if our philanthropic venture fails to pan out. 

10% Rule of Thumb 
Slingshot’s yearly financial investment will most often not exceed 10% of a partner’s annual budget. This rule does not pertain to all investment opportunities, i.e., those involving start-ups, imports, and so on. This is important because, in addition to investing in Slingshot, we want the community to invest directly in our partners and in other nonprofits with high-impact solutions in the fight against poverty. 

One-Year Commitments
We spend one full year working alongside each partner organization in our portfolio before we consider making a financial investment in them. Each investment is a one-year commitment and can be renewed if a partner demonstrates the evidence or potential to create high-impact solutions in the fight against poverty.

Decision Junctures and Real-Options Valuations
Depending on the investment, Slingshot reserves the right to make adjustments over time to exploit upside opportunities and diminish downside risks. The ability to choose good paths and avoid bad ones at each decision juncture applies not only to having adequate information and the capacity to process it, but also to the ability to reallocate resources from one use to another.