Key concepts of Effective Philanthropy

Applied to Corporate Responsibility


Goals of this page

 

1) Give an overview of Effective Philanthropy,

2) Add Effective Philanthropy to the conversation of Corporate Responsibility,
as one of many possible options for positive impact

3) Introduce Leadership Training on Effective Philanthropy,
for further education on EP as a corporate decision-making framework

 

Three key questions

Effective Philanthropy's 101 guide for prioritization and decision-making for maximum positive impact.

 

One

Can we measure meaningful impact?

 

Two

Is it cost-effective?

 

three

Is this the most meaningful thing we can do,
(rather than having only some impact)?

 

key terms

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Philanthropy
Giving (service, product, money, time) to make life better for other people.

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Effective Philanthropy
A method for decision-making on spending; towards redistributing opportunity in the most cost-effective and positively impactful ways.

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Poverty
The lack of opportunity to do valued work.

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can we measure meaningful impact?

Prerequisite to determining whether an initiative has meaningful impact is understanding the goal.

 
 
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The global shared goals of sustainable business
are written as the UN Sustainable Development Goals (SDGs).

The #1 SDG, and underlying all other goals, is lifting people out of poverty.

That mission is also supported by the UN Global Compact:
“The world’s largest corporate sustainability initiative”,
supporting companies to take strategic action towards the UN SDGs.

 

It can be easy to lose-track of the long-term global goal,

The success of Corporate Responsibility
ultimately lies in global economic development
and successfully lifting more people out of poverty.

 


With clarity on the goal,
then it’s possible to measure progress through impact.

In public health,
a leading standard measure of impact
for both environmental and social programs is QALYs:

 
 
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QALY
(Quality-Adjusted Life Year):

One year of human life in great health

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Measuring impact towards the goal,
as opposed to inputs or outputs,
is critical to ensuring meaningful progress.

 

Example Metrics

 
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The organizations doing the most effective work are measuring impact in terms of QALYs,
while most non-profits, NGOs, corporations are not measuring this impact metric.

 

 
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Is it cost-Effective?

Absolutely, to be a sustainable solution, corporate initiatives need to be viable in terms of $ / impact.

 

QALYs are also a metric used to measure an organization’s cost-effectiveness, in cost per QALY.

 
 
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Cost-effectiveness:
Cost ($) to provide the world an additional
1 year of human life in great health

 
 
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For the best organizations doing the most effective work,

 
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while it's still common for average charities and
CR programs to not measure this metric.

 

In other words,
the most cost-effective organizations, verified through robust impact assessments,
are adding a year of healthy human life in the world's most extreme places of poverty for as little as $3,500.

 

The consequences of spending choices have real-life impact.

 

By standard measures of cost-effectiveness,

The choice on where to spend money
can make the difference between
thousands more years of human lives in great health,
or unknown-to-nil impact.

 
 
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Is this the most meaningful thing we can do
(rather than having only some impact)?

With a clearer understanding of the real positive impact that can be made through reasoned spending choices,
the opportunity cost of not making the most effective choice becomes more salient.

 
 
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Opportunity Cost
The cost of what you're not doing instead

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For example,
I know that I can add 100 QALYs / year to the world
(that is, 100 additional years of great health)
by spending about $500,000 / year.

Spending it any other way would be
less than maximum impact return on investment,
in terms of direct years of healthy human lives.

 

Considering opportunity cost supports the mindset,

Having the most positive impact is the baseline expectation.
Anything less is missed potential.

 

So, what next?

Companies can apply the concepts through in-person Leadership Training on Effective Philanthropy

 

in-person education from TLYCS

 

In-person training on Effective Philanthropy teaches,

how outsourcing CR may be
the most meaningful thing your company can do

 

With these questions on effectiveness,
we can take a lot of the guesswork out of Corporate Responsibility spending
by evaluating what works, what doesn’t work, and why.

 

What works:
Global health and economic development,
first focusing on the places of the most extreme poverty.

Alleviating poverty is strategic for all business.

 
 
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Poverty
The lack of opportunity to do valued work.

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In-person education from TLYCS

 

Learn more

 

making it actionable

How TLYCS turns theory into action.

how is global poverty relevant to business?

Focusing philanthropy on global poverty is the most direct way to have the most meaningful impact possible.

 

Re-evaluating cr strategies

Some examples of how EP framework contradicts current CR programs.

why give globally?

In the state of income inequality, spending choices are the most important way that you, and your company, impact the world.

 

more resources

On Effective Philanthropy, Effective Altruism, and Poverty.