The Impact Attribution Problem
Impact attribution is among the most difficult problems in impact implementation, and a major factor influencing people’s decisions to give to charity, invest in impact or otherwise fund impact.
Let me rephrase that. The lack of impact attribution is a major factor in their decisions NOT to give, invest or otherwise fund impact.
What is impact attribution?
Simply put, impact attribution is the correlation between funding and impact.
Impact funders — whether they are donors or investors — expect a minimum understanding of what exactly their money has “bought”.
Why is impact attribution important?
Let’s say Bob really cares about Child Survival and donates money to Child Survival International (CSI), to pay for immunizations in County X. They would really like to know that their money funds immunizations in Country X, rather than, say a conference taking place in New York City. They also would like to know exactly how many immunizations have been made possible by their money.
Unfortunately, today neither is possible. What happens today is Bob’s money goes into a bucket at the HQ of CSI, from where it goes to fund whatever CSI thinks is important to fund — be that a conference or more immunizations. (By the way, I don’t necessarily think this is a bad thing, but do read on).
Now, what does Bob get in exchange for their money? They basically get an annual report and, maybe, a postcard for Christmas.
This is where the problems start.
How much does impact cost?
The first problem is the actual cost for impact. Bob is often told things like
“5 dollars will prevent a child from dying” or “28 Dollars will feed a child for a year”. These claims are pretty sketchy and are most likely based on very optimistic inside evaluations. They also involve generous amounts of double attribution.
What is double attribution?
Here is a simplified hypothesis to explain double attribution: remember CSI’s claim of feeding a child for a year for 20 USD? Let’s assume that Bob has been giving to CSI 100 USD/ month throughout 2018. Now, if Bob suddenly reduces their donation to 40 USD/ month, will CSI report feeding 3 less children from now on?
That’s because CSI has been most likely attributing their results to more than one donor/ funder. The report that Bob receives every year is identical with the report that every other donor/ investor receives. And it’s all nice and fuzzy.
Double attribution is when the same impact event is attributed to more than one donor. Simply put, double attribution is when two donors are “charged” for the same event.
Donors hate double attribution. Yet there is basically no alternative today.
Immutable blockchains & public ledgers
Imagine all vaccination completed by CSI are verified and recorded on a public ledger as unique events (machine verified, timestamped, GPS tagged). every vaccination that has been verified corresponds to a separate event entered into this ledger (a unique token, as it were).
Each event is attributed to the donor/ investor that provided the funding and — very importantly — each event can only be attributed once. Since the ledger is public, any double attribution will be immediately visible.
Now, Bob knows for sure what exactly her money has funded (and also where and when). And, instead of receiving a generic report every year, they receive regular, personalized reports that show them exactly the events that have been made possible by their money, along with the context in which these events occurred.
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