What can companies learn from the effective altruism movement?

April 08, 2016

The growing movement for maximising the impact of altruism has resonances for businesses, writes Nick Jackson.

 

Effective altruism is a growing philosophical movement. It believes that all lives are of equal value, and that through our lives we should seek to do the most good we can.

Proponents of effective altruism say the best way of doing this is by applying evidence and reason to work out, and support, the most effective ways to improve the world. This means we should be unsentimental in our charitable activities, focussing our support and interventions on organisations and causes that will do the most good with the available resources.

There are a few relatively high-profile examples that underpin some of the messages behind effective altruism.

  1. GiveWell is a non-profit started by a group of former Wall Street hedge-fund managers. It aims to assess charities based upon how many lives are saved or improved per dollar spent. It has a series of publicly available detailed evaluations of charities, as well as a set of recommended charities/programmes for people to donate to.
  2. The Deworm the World Initiative originated from a study that found that the most effective way to improve children’s school performance in Kenya was through deworming initiatives improving school attendance rather than an increase in text books or a decrease in classroom sizes.
  3. Peter Singer, a leading philosopher behind the movement, highlights the issue of blindness. It costs $40,000 to train a guide dog and its recipient in order for it to be an effective intervention in the US. For that money you can cure between 400 and 200 blind people in developing countries who suffer from Trachoma, the world’s leading cause of preventable blindness.

On a personal level, I find these arguments and examples very compelling. But I also think it’s worth exploring some of the lessons that this growing idea and movement can give to companies. In particular, the core strand underpinning these examples, the focus on the effectiveness of interventions, is highly relevant.

Effective altruism poses a challenge for companies to prove that their intervention is stronger than simply donating cash to a highly effective charity. Too often, companies have a disparate set of corporate social responsibility (CSR) activities where the link to the business is minimal at best. To maximise their effectiveness, they should utilise their core business competencies and focus on the specific societal, environmental or economic issues they are best positioned to tackle.

To give an indication of the scale of corporate community contributions, and therefore their potential for impact, in 2014/15, 173 best-practice companies that use the LBG model to quantify and benchmark their community investment activities invested $3.6 billion  into community activities.

So what are the key lessons for companies as they look to maximise the effectiveness of their CSR programmes?

Brokering partnerships

The clearest lesson from effective altruism for CSR practitioners is around the criteria they use to evaluate corporate charity partners. These criteria should be rigorous. They should focus on the potential impacts of a partnership. And they should demonstrate why the partner and type of intervention in question is the most effective choice it can make.

Focus on impacts

Companies need to demonstrate the impacts of their investments. Understanding how interventions have improved lives is the beginning of understanding impacts. Going one step further, companies should look to understand the effectiveness of these interventions in terms of the added value they bring as an organisation.

Be clear on the purpose of your CSR programme

CSR is not purely about altruism. It also brings benefits to the business, from employee engagement and skills development to gaining social license to operate and underpinning the corporate brand. Companies should be open about this. There are many trade-offs that may have to occur between these priorities.

So is there a perfect fit between effective altruism and corporate social responsibility? Right now, probably not. There are however some clear areas of overlap.  I for one will be waiting excitedly for the first major corporate to get on board and declare itself as pioneer of Corporate Effective Altruism.

 

Nick Jackson is Consultant at Corporate Citizenship. 

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