Why You Should Care About Scalability
“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.” - Anonymous
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.
Some interventions are much more scalable than others. For example, malaria causes 429,000 deaths every year. In contrast, there have only been about 50 documented cases of Congenital Hypertrichosis Lanuginosa, a condition where one’s entire body is covered with excessive hair, since the middle ages. If you started a charity supporting the latter cause, there’d be very limited potential scale, and thus your impact would be severely limited. If you worked on the former, even if dozens of other charities were working on the same cause, the gap might never be filled.
BENEFITS OF SCALABILITY
All else being equal, the bigger the charity, the bigger its capacity to do good. Because every life is of equal value, helping one more person will always be worth the same amount no matter how many people are already being helped. In other words, there are constant returns to scale. Large scale charities are often able to run more efficiently, with the capacity to cut down on administration costs proportional to program costs. The idea is that some tasks require a fixed amount of time and energy no matter the scale. It takes a similar amount of effort to send 100 SMS vaccination reminders as it does to send 500. The more texts you send, the more cost-effective the intervention becomes as the fixed costs stay the same. If an intervention is very small scale (e.g. treating one village, or treating one very rare affliction), it will be difficult to have a competitive cost-effectiveness figure.
WHEN SHOULD YOU START THINKING ABOUT SCALE?
You should consider scale right from the start, as you decide which intervention to choose. Prefer cause areas that could allow your organization to grow once you’ve learned the ropes. While we think it’s almost always best to start out small at first, you should build scalability into your original model. Scaling up shouldn’t be an afterthought. Generally, picking a higher scale area will allow you to have more impact – particularly when comparing very small areas, e.g. a local problem vs large problems such as a global disease. However, it is also worth keeping realistic expectations for scale. No charities yet have solved all the world's problems. When tackling a huge problem like malaria, even very large charities generally leave plenty of room for dozens of other charities in the same field in the same country (not to mention in other countries!). It can be easy to forget the massive scale of some of these problems. A friend of mine once came to me concerned that there was another charity in India working on vaccination reminders, and that we would be in direct competition with each other. However, he forgot the important fact of just how big India is. With over 1 billion people, there is more than enough room for two vaccination SMS reminder charities – even huge ones. As I researched the charity, it turned out they were working in a single city in a state we did not plan on targeting. It was a good reminder that we should not be turned off working in a country simply because a few other charities are doing similar things. If there were three high skill charities, with one of them being quite large in a very small country (e.g. with a population of 10-50 million) you would definitely want to look at other locations. But keep in mind that both India and Africa are each three times bigger than the whole English speaking world. There is a lot of room for effective charities in the world.
FACTORS AFFECTING SCALABILITY
These are some of the many factors that affect scalability: 1. Size of population at risk How many people are susceptible to this disease or problem? An intervention treating or preventing a widespread disease (such as pneumonia) will have far more scale potential than an intervention treating or preventing a rare disease that only affects 2 or 3 people every year. 2. Size of population uncovered Are there other organizations working on this problem? Are those organizations able to cater to the entire at-risk population? Even if many organizations are already working on a problem, if the issue’s prevalence is high, there might still be many more needed. The problem may be multi-faceted, meaning the best approach is for several organizations to tackle it from different angles. 3. Marketability Marketability can slow down or accelerate scaling. It could also limit the maximum scale possible. For example, there is some evidence that voluntary adult male circumcision helps prevent AIDS, but this is both a politically charged and relatively taboo topic, making this intervention very challenging to fundraise for, hire for, and implement at scale. There are also some causes that mostly promote action rather than donations, which can lead to limited funding. For example, farm animal rights predominantly focuses on food choices rather than donations. 4. Speed of scaling Certain interventions may have large scaling potential, but limited speed potential. For example, a charity that requires you to hire talented surgeons will end up scaling much more slowly than one that requires a more common skillset. Speed of scaling is important because if you grow faster, fewer people will go unserved in the meantime. Fast-paced scaling also increases the amount of impact possible in the early years of founding an organization. An intervention scaled slowly might, in an extreme circumstance, become redundant before reaching its theoretical maximum size. If your charity aims to treat disease Z and before you reach full scale, disease Z has already been cured, that’s not a bad thing for the world (it’s fantastic!), but it does mean that the amount of impact you have had is less. This is why you should take speed of scaling into consideration when comparing interventions – it may influence which one will have the biggest expected impact. Speed of scaling is also important because potential funders might look favourably on your organization (and give you more money, leading to more impact) if it seems like you make substantial progress in a short period of time. Doing so might indicate competency and build funder’s confidence in the intervention. On the other hand, it is possible that this strategy could reduce your ability to maximize impact in the long-term if speed of scaling is prioritized over long term scale or cost-effectiveness. Note that, apart from GiveWell, most funders will not (consciously) take speed of scaling into account when considering where to allocate grants. 5. Crowdedness See our chapter on counterfactuals for a more in-depth review on this factor. 6. Location scale Scale is closely linked to location choice and has a big influence on cost-effectiveness. How much should you value location scale, especially in the early stages of your charity? How much weight you decide to place on scalability will be a determining factor in which location you pick. For example, India is a large country with high potential for scaling up an iron and folic acid fortification charity, but it probably would not be the best location because the incidence of iron and folic acid deficiency is relatively low.
Formula for potential scale You can use this formula to calculate the total number of preventable Disability Adjusted Life Years (DALYs). This can be adjusted for any other metric you are trying to work with. Total Preventable DALYs = World population x Disease incidence rates x Amount of DALYs per disease x Max percent uncovered based on crowdedness You can also add a discount to take into account any current trends, depending on why time scale you’re considering.