“You will not find it difficult to prove that battles, campaigns, and even wars have been won or lost primarily because of logistics.”
- Dwight D. Eisenhower
Although perhaps not the most exciting factor to consider, logistical difficulty is crucial. Many charities end up failing or failing to grow due to logistical reasons. So, particularly if you’re new to the field of charity entrepreneurship, it’s worth weighing in this factor when choosing an intervention.
“Without reflection, we go blindly on our way, creating more unintended consequences, and failing to achieve anything useful.”
- Margaret J. Wheatley
What are flow-through effects?
Your charity will have a direct impact, but it will also have many indirect flow-through effects, also known as second-order effects. For example, an organization distributing bednets might cause a reduction in malaria, but its second-order effect might be increased economic growth due to less loss of productivity from disease. One direct effect can set off an infinite chain of second-, third- and fourth-order effects, which might even surpass the direct impact of a charity.
“The difference between a charity that saves two million lives and a million lives is the same as the difference between one that never got started and one that saves a million.”
What is scalability?
In essence, scalability is about calculating the potential for your intervention to grow if given unlimited resources. It is considered very important in the business sector, but often forgotten in the nonprofit sector, with most public charities never surpassing $500,00 in annual expenses.
How often should you re-evaluate whether your charity is worth continuing?
Although it is crucial to do your best to disconfirm your charity’s impact and most people do not do this nearly enough, there is also such a thing as doing it too frequently. There will inevitably be fluctuation in the results of the evaluations, so day-to-day you may have ‘down days’ (or down months), even if the project is worthwhile overall. You might become demotivated if every day bad news comes in, you think you have to start again. Instead, we recommend setting specific re-evaluation points ahead of time e.g. every 6 months or yearly before you make the next year’s plan. That way on a day-to-day basis you can devote your energy and resources to making the plan work, feeling confident in its success, while knowing that you will critically assess your impact periodically and not end up wasting your whole career on a dead end.
“Insofar as a scientific statement speaks about reality, it must be falsifiable; and in so far as it is not falsifiable, it does not speak about reality.”
- Karl Popper
Any money spent on an intervention that doesn’t work is money wasted. Money that could have saved lives. This is why evidence is so important - you’ve got to have a high level of confidence that the intervention is having the intended effect.
“In order to be irreplaceable, you must always be different.”
- Coco Chanel
What is counterfactual impact?
Counterfactual impact is what would happen if you did x, compared to what would happen if you didn’t do x. For instance, if you brought chlorine to a village in rural Kenya with no safe water source, you would probably feel like you’d accomplished some good in the world. If, on the other hand, you gave the same gift to the average Swedish city they’d probably give you a funny look. They already have clean water.
“Smart can also mean wise, kind, inspiring - and cost-effective. And that has a charm all its own.” - Nancy Gibbs
When researching what charity to found, you’ll undoubtedly spend a lot of time conducting cost-effectiveness analyses (CEAs) if you want to achieve the most good possible. Technically, all other criteria are proxies for achieving the most good per dollar spent. So, here’s a crash course on evaluating cost-effectiveness.
What gets measured gets improved.
- Robin Sharma
When selecting which projects to implement, you should also try to maximize your impact. Your ethical beliefs will dictate what ‘good achieved’ means to you personally - that will be the metric you use to measure your charity’s success. In this we will discuss the pros and cons of some common metrics but, ultimately, your values will underpin your decision: do you value education as an intrinsic good? How about income? Is it worse to be blind for a year or deaf for a year? Read on to find out why we think wellbeing is often the best metric of all.