Impact Investing – What’s Behind the Curtain?
Is it possible to put a pricetag on the life of a child? Unfortunately, thanks to many new metrics systems, I think some people are starting to do just that, even if they have the best of intentions. At givewell.org for example, they encourage people to give to charities who can save a life for the least amount possible. They state on their website:
We consider anything under $2,000 per life saved (or equivalent, according to one’s subjective values about how to compare other sorts of impacts to lives saved) to be excellent cost-effectiveness. We consider anything over $20,000 per life saved (or equivalent) to be excessive for the cause of international aid, as it implies more than an order of magnitude higher costs than the strongest programs.
Can there truly be a metric on saving a child’s life? I see this mentioned more and more as so many companies now use the current buzzword of “impact investing” when deciding which charities receive grants. I understand completely why a corporation would want to be able to put in their annual report that they impacted thousands of lives through their giving, but I often wonder how much smoke and mirrors go into the specific numbers they report. If a charity says they distributed 10,000 mosquito nets, for example, is it 100% accurate for them to report that they actually saved 10,000 lives? As a charity executive, I have always struggled with anyone who reports numbers pulled out of thin air. I couldn’t live with myself if I reported that we changed thousands of lives if we really hadn’t…..even though some would argue that we could take projects we have done on a national level in China, like our Special Needs Manual or our cleft bottle initiative, and add tens of thousands more children to our impact numbers. But that doesn’t seem completely honest to me. We report on the children we absolutely know we helped, even though that makes getting corporate funding so much more difficult.
I remember applying for a grant for one of our projects in China, the Anhui Healing Home, which serves about 30 children a year. It is not an understatement to say that the majority of the abandoned babies we take into that home would not survive without our intervention. The home costs us approximately $100,000 each year to run, so it is a major project that requires continual funding. If you divide up the cost of the home by the babies served, we would have a starting point of approximately $3300 per child. But then we need to add their medical and surgery expenses on top of that. And if a baby from our healing home isn’t adopted immediately, we need to add in their longer term foster care fees as well, as we want to keep them safe and emotionally whole until they are adopted. Oh, and if they have specialized nutritional needs, add in the extra cost of specific formula, too. Thus, on the metric system above, we wouldn’t qualify as a top charity helping kids, even though we completely transform the lives of children in our care.
Today I realized that one of the biggest differences between charities like us and those who score much higher on many metric scales is that we know all the children in our programs personally. And while we can’t say that we impacted 50,000 nameless kids through a project or that we changed the lives of every orphan in an entire city – we CAN say that we saved the life of Marisol, and Tyson, and Emma Grace. That we helped Timothy go to college, and Zane to be adopted. And in my opinion, each of those beautiful children’s lives could never be rated by a metric. You only have to look at Marisol’s sweet face to know her life is priceless. It is still miraculous to me that we got to play an essential part in her being alive today.
So back to the grant I wrote for the home. It looked like a perfect fit because the company wanted projects that helped children with medical needs, and their focus was on Asia. So I wrote the proposal, sent it in, and then followed up with the company after our proposal was denied. And the exact words they told me were, “Yes, we all agreed it’s a truly great project….but you have to realize that it only helps 30 kids a year, and we are looking for a much bigger impact than that.” Only 30 kids. I shook my head thinking, “How do you measure the impact of thirty orphaned kids who will now be adopted, go to school, make a mark on their communities, grow up to dream and imagine and influence this world?” And so while a corporation might not think our healing home is a good “impact investment” – I would respectfully beg to differ. It’s too bad that in the current landscape of social investors wanting the biggest numbers possible, the significance of an individual child is often lost. I have always believed that if you save even one life on this earth, you have changed the world for the better.
~Amy Eldridge, Chief Executive Officer