Impact Labs has partnered with 361Firm to build impact funds for their community of philanthropists and investors. After surveying and interviewing members of the 361 network on their philanthropic goals and interests, we designed the first of these funds to focus on addressing children's health in New York City.

The mission of the 361Firm Philanthropy Fund for Children's Health is to provide vulnerable children and families in New York with resources and services to improve their health. This fund aligned with the UN SDGs of Good Health and Well-Being and Quality Education.

Cause context

New York City has the largest wealth disparity of any major city in the US. New Yorkers who face poverty or material hardship are more likely to have high health care needs, but also more likely to experience rates of delayed or forgone physical health care.

The younger a child is in New York, the more likely they are to experience poverty, with babies experiencing poverty at the highest rate Interestingly, the effects of gentrification on children by early adolescence seem to be modest.

A study of 800k+ NYC public school students, examining disparities in food access, unexpectedly found that there is significant access to all types of food outlets among Black, Hispanic, and Asian students, regardless of poverty status. Despite this, nearly 40% of NYC public school children are overweight or obesity, with Black and Latino disproportionately representing that group.

These findings demonstrate a need to develop strategies that are not exclusively focused on food access, such as programs to increase food quality or decrease costs.

Fund strategy

To align with peer-reviewed research studies on the drivers and effects of negative health outcomes for children, our strategy targets three key interventions:

1. Improving equitable access to healthcare services

School-based health centers are associated with an increase in care visits for children from low-income families and reduced income-based disparities.

2. Addressing socioeconomic determinants

Access to nutritional assistance programs and implementation of child nutrition programs lead to better health outcomes; financial support reduces child welfare involvement.

3. Providing early childhood interventions

Parenting interventions and family support programs during a child’s first three years of life improve early child cognitive, language, motor, and socioemotional development.

Fund analysis

We utilized our Impact Engine to identify and analyze all relevant nonprofits in the New York City region that are in some way addressing the cause of children's health. We filtered through more than 340,000 501(c)(3) organizations and shortlisted 102 nonprofits for this cause and region.

We then analyzed all nonprofits to calculate their relative scores for breadth of impact, depth of impact, evidence of impact, and timeline to impact.

Where do we get the data from?

990 tax forms
Every year, tax-exempt organizations like nonprofits have to file a 990 tax form with the IRS. This 990 gives details on the expenses, revenue, and governance structure. Most importantly, for us, the nonprofits also have the opportunity to describe the outputs and impacts of their three largest programs.

Programs accomplishments and outputs
In part III of the 990 form, the nonprofit is able to list out the accomplishments of their three largest programs. We look at these narratives and extract data on the main types of outputs provided by the nonprofit and the number of individuals served by these outputs. There is no systematic way of writing this narrative and it varies from nonprofit to nonprofit. Therefore, we parse each of these narratives carefully in order to derive the output and individuals served.

Directly from nonprofits
The 990 forms are publicly available and serve as a useful starting point for building up profiles of the accomplishments of each nonprofit. We also utilize the websites of relevant nonprofits to derive program and impact data. We then work to directly verify the data on outputs and individuals with the nonprofits themselves, and collect future data directly from those organizations.
 

Outputs and impact model

For every nonprofit, we assign each output listed in part III of the 990 to an output category. We create these output categories so that we can organize outputs into higher-order groups, which, in turn, allows us to evaluate and compare nonprofits. Please view the appendix to see how we classify a list of outputs for those nonprofits working to address the health care cause. To be sure, this list is far from exhaustive and it is likely that we will encounter outputs that we do not preemptively specify. In those cases, we take our best guess for the output category, mark that particular nonprofit internally, and revisit it later to discuss it with the team so we can achieve consensus.

Each category also has an impact horizon, which means it can either have a short-term or long-term effect. We define short-term as goods/services whose benefits materialize almost immediately or, at the very most, in the short or immediate term (e.g., distributing nutritonal meals). We define long-term as goods/services whose benefits take time to materialize or materialize across many time-periods (e.g., delivering rehabilitative medical care to a child).

Finally, we assign impact weights to each output category which indicate their importance in addressing the most pressing issues in health care. We use peer-reviewed academic research and policy papers to determine impact weights but where these are not readily available, we also use our own best judgment. Sources and further explanation are provided in the appendix to justify our impact weights. Further changes to impact weights will be made as new evidence becomes available or circumstances change.

The output categories, associated outputs, and impact weights for this fund are shown in the table below.

Within each output category, we create a list of nonprofit organizations that are producing at least some non-zero output that falls under that category. The lists across each output category are non-exclusive because a nonprofit could be producing outputs that fall under multiple categories. For example, a nonprofit with two different programs providing children's medical services and family support services, respectively, would be in the lists for both the “Children's access to medical services” category and the “Family support services” category.

Breadth of impact

For nonprofit breadth, we look at the total number of individuals served over a given period of time. This is typically reported in a nonprofit's program accomplishments on their annual 990 form, or on reports from their website.

For each nonprofit, we allocate all outputs to the different output categories and determine the number of individuals served by each output. Nonprofit breadth is calculated within each output category list. Thus, a nonprofit might have a different breadth measure across the different output categories that it deals in. Within each output category list, we then standardize the breadth across the nonprofits and then convert this standardized measure into a breadth score between 1 and 5.

Issues

Some nonprofits do not specifically state individuals served but instead could mention households served or houses served. In such cases, we estimate the number of individuals served using Census data for average household size in that specific region. We also make a note when we make such a calculation so we can revisit it if necessary.

Moreover, within one program, the nonprofit might list many outputs from different output categories. For example, within one program, a nonprofit might state that they are providing medical services to children and meals to 20 individuals. The former belongs to the “Children's access to medical services" category (long-term) while the latter belongs to the “Children's wellness and nutrition services” category (short-term). In such a situation, we would list both output categories and that 20 individuals were served within each.

Depth of impact

Depth is essentially how important or impactful the output is toward solving the issue. As described above, for each output category, we have assigned impact weights (based on peer-reviewed academic research studies and policy reports, when available) which reflect its effectiveness toward addressing the issue.

The maximum depth of impact value is 1 and the minimum value is 0. All output categories have an impact weight within this range and the higher the weight, the more impactful the output is to addressing the issue.

Evidence of impact

For evidence of impact, we are looking to see how much supportive evidence the nonprofit provides that shows their results had an impact on individuals. We examine and score this evidence for each category with either 1, 3, or 5 depending on the following criteria:

• 1 - Nonprofit does not report individuals served and instead states a different overall quantity of outputs or activities
• 3 - Nonprofit reports individuals served
• 5 - Nonprofit reports individuals served and provides additional details on outcomes achieved to help those individuals progress in service of the cause

If a nonprofit reports that it provided 14 family support services without mentioning anything else about individuals who were actually served, then, for the “Supportive Services” output category, the nonprofit would get a score of 1. If the nonprofit instead stated it provided 14 family support services for 28 distinct individuals, then the score would be 3. Finally, if the nonprofit stated that it provided 14 family support services for 28 distinct individuals, of which 18 were then able to overcome reach a positive health milestone, the score would be 5.

Similar to breadth, the evidence of impact score is calculated within each output category list. For each nonprofit, within an output category, we record the evidence of impact score.

Issues

Within an output category, what if the nonprofit provides more evidence of impact for one output over other outputs? For example, let’s say we have a nonprofit that is providing medical services for two programs where it mentions the number of units provided for both but it only states the number of individuals served in one of them. Thus, it could score potentially a 1 or a 3 on evidence of impact for the “Children's access to medical services”  category. In this case, we decide to assign the highest score, 3, even if it only applies to one output.

Ranking nonprofits

The ranking of the nonprofits involve several steps. Below, we describe each step in the order it takes place.

Depth calibrated final score

Each nonprofit will have at least one broad output with corresponding breadth, evidence of impact, and depth scores attached (as calculated above). We then calculate a depth calibrated final score for each of the broad outputs through the following formula: (0.8*breadth +  0.2*EOI) * depth. We thus put a higher weight (0.8) on breadth than on evidence of impact (0.2). We also multiply this weighted measure by the depth (which is a value between 0 and 1) such that the weighted average of less impactful output categories are adjusted downwards. 

Impact horizon score

As described above, the output categories have different impact horizons. Therefore, some nonprofits will be producing outputs with either long impact horizons, short impact horizons, or both. 

For each nonprofit, we look at the long-term and short-term output categories separately. We then calculate the overall long-term and short-term scores for each non-profit by averaging across the depth calibrated score within each time horizon. If a nonprofit produces both long-term goods (e.g., reproductive services), and short-term goods (e.g., breast pumps), then they will have both an overall long-term score and an overall short-term score.

Ranking

The nonprofits are then ranked within impact horizons. We take all nonprofits which have an overall long-term score into one group, and all nonprofits which have an overall short-term score are put into another group. There can be overlap where a nonprofit is providing both such long-term and short-term outputs and, in such a case, it would be included in both groups. The overall scores would be between 0 (minimum) and 5 (maximum). We then rank the nonprofits within each impact horizon group by their overall score.

Fund allocation

The fund contains four nonprofits - the top two from the long-term impact horizon group and the top two from the short-term impact horizon group. Sometimes there may be more than two equally ranked nonprofits within each impact horizon group. In those cases, we use their breadth of impact measures as the tie breaker.

Once the four nonprofits for the fund are chosen, the final step is to create fund weights to establish the allocation of the fund. Each nonprofit's fund weight is equal to the final overall score of the nonprofit divided by the sum of all the final performance scores of the four nonprofits.

In this fund, we have four nonprofits in the fund with final performance scores of 4.6, 3.5, 2.5, and 2.3. The sum of the final performance scores is 12.9. The corresponding fund weights for each nonprofit would be 35.8% (= 4.6/12.9), 26.9% (= 3.5/12.9), 19.8% (= 2.5/12.9), and 17.5% (= 2.3/12.9). Thus, for every $10 donated to the fund, $3.58, $2.69, $1.98, and $1.75 would respectively go to the first, second, third, and fourth nonprofit. 

Appendix

Sources for impact weights

1. American Academy of Pediatrics (2021): School-Based Health Centers and Pediatric Practice
2. Current Problems in Pediatric and Adolescent Health Care (2024): Financial support policies as a mechanism to reduce child welfare involvement
3. Cornell Community Development (2023): School-based health centers and rural community health
4. Health Affairs (2019): Gentrification And The Health Of Low-Income Children In New York City
5. JAMA Network Open (2023): School-Based Health Centers, Access to Care, and Income-Based Disparities
6. Journal of Human Resources (2023): Fighting Crime in the Cradle
7. New York City Comptroller (2023): The Racial Wealth Gap in New York
8. PLOS Medicine (2021): Parenting interventions to promote early child development in the first three years of life: A global systematic review and meta-analysis
9. PLOS One (2019): Disparities in food access around homes and schools for New York City children
10. Schuyler Center for Analysis and Advocacy (2020): The State of New York’s Children