Spending on Elections: The Paradox of a Bad Investment

Every time we make a decision about how to spend or invest our money, one of the fundamental cost-benefit analyses we conduct is the following: for every increase in 'unit' of spending, what will be the expected increase in value? At some point, our own budgets, the quality of the product we are seeking to purchase, the law of diminishing returns and other behavioral and psychological factors--marketing, social pressure, etc--lead us to a choice. Generally speaking, when we spend more we expect to get more.

Consider, for instance, the electric shaver I recently purchased. After doing my homework, I narrowed the choice down to three (3) models of Braun shavers (and no, I'm not being paid to advertise for Braun!): the Series 3, which costs $70, the Series 5, which costs ~$150 and the ~$200 Series 7. Looking at the features and price of each, I decided that the Series 3 lacked some of the things I needed, and the Series 7 came with whiz-bang technology from which my face would never benefit. Put another way, had I spent the extra $50 on the Series 7, the marginal return would not have justified the additional price.

The 47% And Disdain for the Poor

Mitt Romney's recent remarks about the 47% of Americans who pay no income tax, where he essentially argued that nearly half of the country consists of lazy moochers, is extremely galling and upsetting.  For me, however, the frustration comes not from the fact that a candidate for president of the United States of America holds such views, but rather because his arguments speak to a larger, bipartisan truth: as a society, generally speaking, we disdain the poor.  This might come as especially surprising given the fact that 1 out of 3 Americans either lives in poverty or close to it--a fact that would seem to imply that many Americans loathe themselves!

But no, we don't live in a nation of masochists; instead, we live in a nation so swayed by the illusion of upward mobility that we can't see our own stagnation.  Even worse, by refusing to note that hard work and perseverance are no longer enough to make it into the middle class--and stay there--we pour our anger onto the 47 million of those that live in poverty.  We do this in a myriad of subtle and not-so-subtle ways.  For instance, we have a tax policy that favors the wealthy (loopholes, capital gains tax rates that are far lower than income tax rates, mortgage deductions, etc).  Or there's the fact that the poor are more likely to be audited than the rich.  Or a funding system for public schools based largely on local property tax revenues, ensuring that the wealth of those living in a community dictates the quality of a school and the likelihood of its children graduating from high school and college.  And so on and so on and so on.

Officiating in the National Football League & Children Dying

Last Monday, two 'events' transpired, only one of which elicited national anger.  On the one hand, 25,000 children around the world died from eminently treatable illnesses like diarrhea--25,000 human lives, with all their potential, their beauty, their hope, snuffed out due to a lack of clean water to drink or cheap antibiotics to treat them.  On the other hand, the Green Bay Packers lost to the Seattle Seahawks on a last minute call that, observers around the country agree, was blown by replacement referees.  Now, there are many angles to this.  For one thing, the regular, unionized referees have been locked out by the NFL due to a dispute over pay and pensions, creating a fascinating dynamic whereby numerous anti-union figures, such as Wisconsin Governor Scott Walker, find themselves begging for a return to the unionized referees.  What's more, it's been absolutely fascinating to read about the fact that, despite a litany of horrible calls by these amateur refs, many of which have literally changed the outcomes of games, viewership has actually gone up!  So it seems that the old adage 'there is no such thing as bad publicity' holds true.

Anyway, where was I?  Oh, right, national anger.  So one of these two events got the President of the United States, presidential and vice presidential candidates Romney and Ryan, several governors, talk show hosts, tv show hosts, bloggers, newspapers and countless millions of ordinary Americans to unleash a unified crescendo of dismay, disgust and disdain for...the NFL.  The fact that so many died quiet deaths in distant villages, crowded cities and everything in between?  Not a peep.  Not a word.  Not even a side note on the evening news.

Am I surprised?  No, of course not.  And there's no use rambling on and on with an acerbic and cynical tongue about how much more Americans seem to care about football than about injustice.  Instead, I want to propose something.  It's an idea I got while thinking over the paradox that when 30 people are shot dead in a movie theatre, the entire nation is moved to support the victims, but when tens of thousands die in unspectacular--one might call it unglamorous--fashion, nothing happens, beyond the trickle of donations that reach NGOs around the world on an annual basis--donations that fall far short of what it would take to ensure dignity and justice for all human beings.  So here's the idea: one day, just one day, I'd like for the front page news in the New York times to read as follows;

"Today, 25,000 children around the world died for no other reason than that no one cared enough to keep them alive, just as 25,000 more children will die tomorrow, and the day after that, and in perpetuity until we decide to care."  The rest of the article will be a real article, treating the death of these children as though it were as 'exciting' as a war or a natural disaster, instead of the unnatural and entirely avoidable calamity and injustice that it is.

I wonder if such an article would spur people into action?  I mean, after the tsunami of 2004, or the earthquakes in Haiti or Pakistan, Americans, and people all around the world, contributed billions of dollars and got involved in countless other ways.  So if we could just frame daily suffering in the same way we view disasters and war, might we not see a similar outpouring?  And, most importantly, might we not see so many lives lost to apathy?

I challenge the New York Times, or any other media outlet, to publish a story of this nature and see what kind of impact it has.

T.E.C.H. -- A Harlem Children's Zone on Wheels

The Harlem Children's Zone (HCZ) is one of America's most well-known and impactful non-profits.  Their innovative model, which focuses on a 'cradle to college' approach to supporting children, has been replicated throughout the United States.  What's more, HCZ's dedication to data-driven programming has forced many in the education and broader non-profit fields to re-think how they do business.  For me, HCZ has been a source of inspiration because of the extent to which the organization takes a holistic approach to tackling poverty--recognizing that no one intervention will suffice to break the numerous and often impenetrable barriers to success faced by America's poor--and I congratulate Geoffrey Canada for pioneering the use of data, and for growing HCZ into what it is today.  At the same time, however, I have focused on one potential flaw to their model: it's cost and time-intensity.

In a recent article of mine, The Math of Social Change, I talked about how hard it is to accept that only a certain percentage of those we serve will truly benefit from the service.  I went on to explain that two  logical responses to this realization are to a) determine the characteristics of those that are likely to benefit and target the intervention to them, and/or b) increase the percentage of people that benefit from the intervention.  The necessity for both of these responses is born of the fact that social change work is all too often a zero sum game: with limited resources, the dollar spent on the person that does not benefit could have been spent on someone that would have benefited.  Therefore, it's imperative that we  do a better job targeting the right people, or ensuring that more people benefit from the intervention.

Summer PLUS -- A New Take on Summer Camp

As any regular follower of our work will know, we are obsessed with creating products and services that are replicable, sustainable and truly impactful.  For instance, realizing that truly ending poverty in the lives of our clients means breaking the intergenerational cycle of poverty in families, we launched the T.E.C.H. Program.  Under T.E.C.H., we offer our entire suite of products and services to low-income parents at partner elementary schools.  The theory of change is that by helping a family stabilize financially through financial coaching and free tax preparation, and gain access to technology through loans and training, the kids will do better in school and, in turn, in life.

However, we know that improving educational outcomes is a major challenge.  Given our passion for being honest with ourselves and others about what works and what doesn't, we decided to run a pilot summer camp at our first partner school, Pleasant View Elementary in Providence, Rhode Island, to see if adding a summer camp to the T.E.C.H. Program a) makes sense, b) is feasible and c) excites the kids.   Increasingly, our goal is to for T.E.C.H. to be a program for true transformation and change within a school and the school community.

The summer program, which we ran thanks to seven (7) summer AmeriCorps VISTAs and Dr. Gara B. Field, Principal of Pleasant view, was designed to eliminate summer learning loss, build character, instil a love of learning and introduce kids to technology.  The above video tells the story of the camp which was, in the opinion of everyone involved, a roaring success: the kids loved it and learned a ton, the counselors had a blast and felt like they made a difference, and the leadership at the school and the school district are thrilled with the results.  We want to be able to bring the summer PLUS model to every school with which we partner on T.E.C.H.!

FOR IMMEDIATE RELEASE: August 7, 2012
CONTACT: Chip Unruh (Reed), 202-224-4642
Andy Posner (Capital Good Fund), 401-339-5437

RI Non-Profit Wins $81,000 Community Development Grant

PROVIDENCE, RI – Capital Good Fund (CGF), a non-profit financial services organization based in Providence, will receive an $81,273 Community Development Financial Institutions Technical Assistance grant to help revitalize low-income communities in Providence and better serve all of Rhode Island.

“I am pleased Capital Good Fund has won this competitive grant to help revitalize communities in Rhode Island,” said Reed, a member of the Appropriations Committee. “Offering loans and financial coaching to communities and small business owners are smart ways to foster economic opportunity and community development.”

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.