Social change work is hard and frustrating and wonderful and terrible; it is also, at times, funny, quirky and just plain fascinating. With this blog we hope to capture all that goes into what we do at Capital Good Fund, and we invite you to join the conversation!

Saturday, August 4, 2012

The Math of Social Change

The fight for social/environmental justice, regardless of the form the battle takes, is deeply imbued with emotion: we want to hear about the life changed, the forest preserved, the child educated, the disease eradicated, the war averted.  And to be sure, whether one donates to a non-profit, works for an organization that seeks to better the world or volunteers for a cause, one’s time, money, sweat and tears will almost always achieve a positive impact, however infinitesimal.
However, there is also a math to social change that cuts through emotion and gets at a simple question: does a particular intervention actually achieve the desired impact?  As the Executive Director of a non-profit, I have dedicated my entire life to bettering the world.  For the past four years I have worked 60+ hours a week to grow an organization that can tackle poverty in America.  After all this work, after thinking for so long about what product, service or combination of the two can really change lives, and after serving hundreds of people with loans, financial coaching, free tax preparation and various workshops, I have been forced to come to a painful conclusion: no matter how many people you serve, only a certain percentage of those served will truly benefit from the service.

On the face of it, this realization shouldn’t be surprising, for not everyone wants to, or is able to, or is ready to better his or her own life  External factors--illness, an economic downturn, a family emergency--can prevent even the most dedicated of people from moving out of poverty.  Yet when I work so hard to serve people, it is painful to realize that only a subset of my clients will truly benefit from my work.  As I have begun to assimilate the painful math of social change, I have come up with four possible ways of looking at the numbers:
  1.   We can say that, even if only 20 out of every 100 people served will truly benefit, it’s still worth it because that’s the only way of reaching those 20 people.  What’s more, we can argue that, when it comes to something like the reconstruction of Afghanistan, billions of dollars are thrown into a money pit of warlords, drug lords and corruption, with only an infinitesimal impact, so why not pour money into an effort that will have an impact?
  2.   We can look at the data and try to determine the characteristics of those 20 people and focus exclusively on them.
  3.   We can assess the effectiveness of our intervention--in my case, microfinance--and consider tweaking or changing it.
  4.   We can focus on broader forces that affect our clients. For instance, we can advocate for welfare reform, policies that will strengthen the middle class, or improve education.  Under this model, the focus isn’t on serving the poor one person or family at a time, but rather tackling the structural barriers to ending poverty
  5.   A combination of the above.
Again, these five options may seem obvious, but there are numerous challenges.  
With option one, it’s hard enough to raise money for a non-profit, and it’s even harder to make the case that it takes a lot of money to reach those that will actually benefit.  For instance, imagine an organization that serves 1,000 people per year, at a cost of $100 per client.  Let’s further assume that 20%, or 200 people, truly take advantage of the organization’s products or services.  What this means is that the true cost of changing a life is the total cost of serving the 1,000 people ($100,000) divided by the 200 people that benefit ($500).  In other words, the cost of truly changing a life is five times the cost of serving a client.  In short, that’s a hard sell for funders, especially considering that funding from individuals, foundations and other grant makers is hard to come by.
Option two sounds compelling: instead of reaching a 1,000 people in order to find the 200 people you really want to reach, why not figure out how to target those 200 clients to begin with.  But again, there is a major problem: non-profits are starved of funding and data.  A lack of funding means that we cannot invest in the data systems we need to be able to figure out how to better target our services.  What’s more, because of the number of clients we serve, we may not have enough data points to accurately target our efforts.  That leaves us stumbling in the dark, trying to use intuition to improve our services.  Finally, even if we have the systems and the data, it takes many months or years to conduct surveys such as randomized controls, and in the time it takes to run such an evaluation human beings continue to suffer.  The question then comes, is it worth investing so much time and money into evaluation when we could be serving people today that are in need today, albeit not 100% effectively?
Option three isn’t nearly as compelling.  Capital Good Fund has chosen financial services as its tool for tackling poverty, and while there is ample room for tweaking the model, expanding or eliminating products and services, at the end of the day a radical change in the tools we use--say, switching to a job training model--would be mission drift and would essentially turn us into another organization.
Option four is the one that perhaps has the most potential to affect significant change on a societal level.  After all, if we look at the trends that have brought the most people out of poverty in the 20th century, it’s not the work of social services agencies, but rather macroeconomic trends such as globalization, the information technology revolution, industrialization and the green revolution.  The problem, of course, is that it is exceedingly difficult and time consuming to effect this sort of change: after years of lobbying and advocating for a single policy change, powerful interests can still block the initiative, leaving one with nothing to show for so much effort.
Option five is, ultimately, the best solution.  While we work to advocate for macro changes that have the potential to change society for the better, we must recognize that there are human beings in need of support today.  And while we must always do our best to rigorously look at data, tweak our business model and theory of change, and recognize the math of social change, we have a moral obligation to continue doing all we can to serve humanity.  Even if 20% of our clients truly benefit, that’s 20% more people moving out of poverty than had we not launched our organization.  With Capital Good Fund, I have no doubt that as we continue to grow, not only will we get better at identifying those we really want to reach, but we will increase the percentage of clients whose lives are changed.  And finally, we will have to maximize the extent to which we become aware of, and advocate for, policies, laws and other structural changes that remove the barriers to creating a more just and equitable society.
So yes, the math of social change is difficult to stomach, but the fact of the matter is that being a force for social good is as much poetry as it is math, and numbers can only say so much about how a human being--in all her complex and subtle beauty--is impacted by any intervention.  As a result, we have no choice but to soldier on with passion, with judiciousness and with a trust in the moral and ethical power of our actions.