Philanthrocapitalism, social return, social investment, Absolute Return for Kids… Business is the analogy most commonly used for philanthropic activity. Though that’s not wrong, it’s dangerously narrow for solving what Warren Buffett calls ‘problems which have already resisted great intellects and great money’.
Let’s think through some steps which a donor – or a charity, for that matter – might take.
Since the giant array of needs in the world creates a giant array of options for donors (and charities), intelligent donors/charities are selective. Here, a pertinent analogy is the military. Even the Romans found it hard to fend off enemies on numerous fronts, and more recently the Nazis couldn’t deal with challenges on both the Eastern- and Western Fronts. We ourselves would perhaps have done better in Afghanistan if we’d had fewer and clearer
goals. ‘A single, unambiguous aim is the keystone of successful military operations. Selection and maintenance of the aim is regarded as the master principle of war’, as is taught to all officers in the Royal Navy, Royal Air Force and British Army.
Having selected an unambiguous aim, the judicious donor (or charity) will research their starting point. How widespread is poverty? How bad are race relations? Which groups are least well served by formal education? Answering even simple ‘factual’ questions like these is surprisingly difficult, because what we see and experience is heavily influenced by what we’re expecting to see. ‘Observation is theory-laden’ as philosophers of science have found.
So the donor/ charity defines some metrics and attempts to measure the amount of poverty or race relations or whatever. Yet the act of measuring may change the very thing which is being measured: we all behave differently when we’re being watched and the researcher’s questions may focus our latent anger. Any social scientist would have foreseen that, as would any physicist: Heisenberg got a Nobel Prize for the implications of his realisation that ‘What we observe is not nature itself, but nature exposed to our method of questioning’.
To establish the starting point, the donor or charity commissions a survey which, to minimise the Heisenberg effect, sequences the questions carefully. Psychology has much to contribute: to take just one example, psychologists have found that when young people are asked how happy they are and then asked when they last went on a date, their happiness rates totally differently than if they are asked the exact same questions just in the opposite order! Lawyers could help here too, since they know about (avoiding) leading the witness.
Perhaps the donor /charity navigates all this and is eventually ready to design her ‘intervention’ to get people to do more X or less Y: to drive more safely, to commit fewer crimes, to vote less tribally. She’d do well to engage with the newish field of behaviour economics (‘nudge’). Perhaps the most effective and least laborious ‘interventions’ are simply making it easier to repay loans, or making it socially normal, or making it somehow fun.
Work begins. After a while, the donor /charity looks for its effect. ‘We did such-and-such and then something-or-other happened’ say many donors / charities, under the mistaken impression that this somehow indicates that the something-or-other was caused by the such-and-such. Any economist or statistician, or scientist, or indeed anybody who understands the difference between causation and correlation (such people are rarer than you might suppose) would raise an eyebrow at that. You can’t claim some God-like control of the solar systems just because the sun comes up every time you eat your Weetabix.
To really understand whether the something-or-other had anything to do with the such-and-such – i.e., whether the donor/charity made any difference – we need a control experiment. A simple one involves sitting around doing nothing to see whether something-or-others happen all the time anyway. Social scientists and physical sciences teach a great deal about constructing good control experiments. (And, by the way, rather more than business does. I’ve yet to see an article in Harvard Business Review about them, though they’re discussed in Nature all the time.)
Two implications are important for donors and charities.
First, we should open our minds to learning from many disciplines – from any discipline. Donors and charities face some of the most difficult challenges on Earth, and hence need all the wisdom and insight they can get. The observed over-reliance on one discipline is patently insufficient. People involved in these challenges should read and listen widely, for relevant learning lurks in surprising places.
And second, donors and charities should hire staff from a broader pool. Foundations are often particularly narrow, staffed entirely by people with business backgrounds, and perhaps a few aid-wonks. If you have three business people, then you have enough: your next hire should have studied physics or epidemiology or psychology.
A single analogy or skillset – however good – is most unlikely to bring the breakthroughs which the poor, the lonely, the underserved so badly need from us.
Caroline Fiennes has a surprisingly useful degree in Physics and Philosophy.
This article draws on material in her forthcoming book, It Ain’t What You Give, It’s The Way That You Give It: Making charitable donations which get results.