TAKING A STAKE:

Impact Investing for Conflict Resolution

By Wayne Lifshitz

Board Member, Rational Games, Inc.

September 2024

The Rational Games Foundation has been a pillar of philanthropic efforts for over two decades, distributing and taking a stake of over $1 million in grants to organizations around the world focused on peacebuilding and conflict resolution through games and play. But as the world of philanthropy evolves, so too must the strategies employed by those who wish to make a lasting impact. One such evolution is the shift from traditional grant-making to impact investing, a strategy that holds significant potential for both social good and

financial sustainability.

The Rational Games invested over $1 Million in grants to around the world focused on peacebuilding, conflict resolution and play.

The primary advantage of impact investing over grant-making lies in its ability to create sustainable, long-term social value for the recipient. Grants, while vital for immediate relief and short-term projects, often leave organizations reliant on continuous external funding. Impact investing, on the other hand, enables funders to support financially self-sustaining initiatives. By investing in social enterprises or other mission-driven organizations, we can empower these entities to generate their revenue, reducing dependency on future grants and allowing them to scale their impact more effectively.

Unlike grants, which are a one-time financial contribution, impact investments seek to recycle capital. When we invest in a social enterprise or impact-driven business, we expect a return on investment (ROI). This return can then be reinvested into other social ventures, creating a cycle of impact that extends far beyond the initial investment. Over time, this approach can amplify our ability to support multiple projects and causes, thereby magnifying

our impact on the organizations that we support.

Unlike grants, however, impact investing requires a new approach to partnerships. By engaging with other impact investors, impact networks, social enterprises, and like-minded organizations, we can tap into a broader ecosystem of resources, knowledge, and

influence.

Sophisticated negotiation techniques, such as those developed and taught at Harvard, also core to Rational Games negotiation training, can play a critical role in the success and sustainability of social enterprises. These enterprises, which blend social missions with business models, often face complex challenges that require effective negotiation skills to navigate. Here are some ways in which the Rational Games style of negotiation can impact social enterprises:

1. Partnerships: Harvard-based negotiation techniques, which emphasize interest-based bargaining and creating value for all parties can help social enterprises forge strong, mutually beneficial partnerships by focusing on underlying interests rather than positions to identify win-win solutions.

2. Securing Funding: Negotiating with investors is a critical aspect of managing a social enterprise. Our negotiation strategies can equip social entrepreneurs with the tools to articulate their value proposition effectively, address concerns and structure deals that satisfy both the financial objectives of investors and the social impact goals of the enterprise.

3. Communication: Social enterprises often operate in environments with diverse and sometimes conflicting stakeholder interests, internal and external. Our negotiation principles, particularly those that focus on managing difficult conversations and resolving conflicts, can help social enterprises navigate these complex relationships by understanding and addressing the concerns of various stakeholders through open communication, collaborative problem-solving, and the integration of diverse perspectives.

4. Growth: When social enterprises seek to scale their enterprise, they often need to negotiate new contracts, enter new markets, or expand partnerships. Our negotiation strategies can help them manage these transitions smoothly by focusing on creating value and ensuring that all parties see the benefits of expansion.

5. Advocacy: Many social enterprises work in areas that require advocacy and policy change to achieve their mission. Our negotiation techniques can be instrumental in these efforts, helping social enterprises negotiate with policymakers, build coalitions and advocate for changes that support their social objectives.

As we look to the future, the transition from grant-making to impact investing represents a strategic evolution that can enhance our ability as funders to effect meaningful change. We

cannot do it alone and are actively seeking partners who share our vision to utilize negotiation and games and play to achieve sustainable social impact. We are different. We are specific. We want to invest in organizations that will benefit from both our capital infusion as well our negotiation training methodologies.

Our sophisticated negotiation techniques, particularly those rooted in Harvard's negotiation principles, offer social enterprises a powerful set of tools to advance their missions. By embracing this approach, we will continue to lead the way in using games and playful methods to foster win-win negotiation, conflict resolution, and a more peaceful world.

Join us on our impact investing journey, and connect with us here.