Last week, David once again stirred the pot around the concept of “micro,” raising some good questions about the efficacy of micro interventions and whether much-hyped new platforms such as The Extraordinaries might actually do damage to the sector by emphasizing the easy over the impactful. David’s main concern is these micro actions may sound appealing, but in fact be wholly ineffective at affecting the problems they claim to address. In a comment on David’s post, CSR consultant Alice Korngold pointed out another dimension of potential impact:

At the same time, micro-engagements do provide opportunities for everyone to get involved[...] These micro-philanthropy/service opportunities are also ways for younger people to begin or expand their participation in what will hopefully become a larger and lifetime commitment to service and giving.

David agreed with the potential for engagement via small scale opportunities and clarified that his criticism is directed towards micro interventions that are intended to create direct impact (and presumably fall short).

In reflecting further on the potential benefits and shortcomings of microphilanthropy, I started to think about inputs and outputs and what underlying assumptions might lead people to support or question the value of microphilanthropy. For the purposes of this discussion, I will use the term “microphilanthropy” to include micro-donations (e.g., Kiva or Tipping Bucket), micro-volunteering (e.g., The Extraordinaries), and any other form of micro-engagement (e.g., petitions on Change.org).

At the level of the individual participant, microphilanthropy has two primary outputs. The first is the Action Impact, the actual tangible effect on the target problem, whether in terms of dollars raised or the value of the action towards positive outcomes for the person or people being served. This is the outcome David focuses on. The second output is Change in Philanthropic Demand. This is a measurement of the increase or decrease in a person’s expected future Action Impact, be it via micro- or macro-philanthropy. Presumably, if a previously un-engaged person has a positive experience with microphilanthropy, he or she will have greater demand for other opportunities to engage in philanthropy of all sorts in the future. Likewise, a negative experience with microphilanthropy may make it less likely for that person to increase future philanthropic engagement, decreasing their philanthropic demand. In a worst case scenario, an ineffective microphilanthropy experience might fulfill a previously engaged person’s philanthropic demand while producing less action impact than alternative philanthropic activities, or even diminish their desire to engage in future acts of philanthropy.

Combining the Action Impact and Change in Philanthropic Demand for an individual engaging in microphilanthropy via a given platform, then multiplying that by the number of people reached by that platform (Reach) gives us an admittedly rough estimation of that platform’s outputs.

(Action Impact + Change in Philanthropic Demand) * Reach = Output

In order to generate these outputs, inputs are needed in the form of financial and human resources to build, promote, improve, and maintain platforms for microphilanthropy. I see these costs as largely Fixed Costs to build out scalable platforms, but there are undoubtedly also Variable Costs that will increase in line with the platform’s aforementioned Reach. Finally, don’t forget to multiply the Fixed Costs and Variable Costs by the Opportunity Cost of not having those human and financial resources to direct to other (presumably effective) forms of philanthropy.

(Fixed Costs + Variable Costs * Reach) * Opportunity Cost = Input

Subtracting microphilanthropy’s Input from its Output gives us its Net Impact:

(Action Impact + Change in Philanthropic Demand) * Reach – (Fixed Costs + Variable Costs * Reach) * Opportunity Cost = Net Impact

I fully recognize the limits of attempts to quantify impact in this manner. Attaching actual numbers to any of these variables, especially the outputs, is difficult or impossible. The formula also does not capture the effect on the Philanthropic Demand of people who may not directly participate in microphilanthropy, but whose opinions of the sector are swayed by the reputation (either positive or negative) garnered by microphilanthropy in society at large. Still, I find it a useful exercise to think about the theory of change behind microphilanthropy interventions and examine the assumptions on which they operate.

What do you think? Is thinking about microphilanthropy in terms of a cost-benefit analysis helpful? Is this formula a useful tool for thinking about the risks and opportunities associated with microphilanthropy platforms or does it fail to capture important aspects of these interventions?

(Photo by vaXzine)