Most altruistic projects are collaborative projects, with many contributors motivated by the ultimate impact. Even within a single organization, a project requires contributions from:
- Employees
- Funders
- Founders
- Volunteers and advisors
- …and others.
Different contributors have different degrees of responsibility; some could be easily replaced, while others could only be replaced at great expense or not at all. The marginal effects of different contributors correspond to a division of responsibility amongst them. This allocation of responsibility is very rarely made explicit, and in many cases each contributor seems to overestimate their own responsibility.
Certificates of impact force us to make this allocation explicit. But more importantly, price signals make it much easier to determine a reasonable allocation, and to adjust that allocation based on the actual availability of resources. (In the for-profit sector, compensation and input prices implement this allocation of responsibility.)
This allocation is of direct relevance to decision-making:
- Many individuals face a choice between working in the non-profit sector or earning money and financing altruistic activities. This depends directly on the relative importance of funding vs. manpower.
- Similarly for choices about volunteering, and more generally about willingness to accept paycuts in exchange for a perceived larger impact.
- The importance of money and manpower seems to vary widely between different organizations.
- More specualtively, the allocation of responsibility between founders and employees could help guide decisions about whether to try starting new enterprises.
Under the status quo, organizations’ motives are poorly aligned with accurate decision-making. For example, organizations will often accept volunteers until the marginal impact is extremely small (or negative), while volunteers give them time expecting it to have a positive impact. The explicit allocation of causal responsibility would improve these incentives, if organizations considered paying a volunteer 1% of a project’s output to be as costly as undoing 1% of that project (and volunteers tried to maximize the impact which they were paid rather than the impact with which they were associated).
Would this reduce contributions?
For most altruistic projects, I think that different contributors’ estimates of their own causal responsibility will add up to more than 1. Being more explicit about this allocation could then have a side-effect of decreasing people’s optimism about their altruistic efforts, and hence reducing altruistic activity.
That said, most people seem to devote a fixed fraction of their time and money to altruistic ends, rather than adjusting their contribution substantially based on its actual impact. So it’s not clear that a more accurate assessment of their marginal impact would have a negative effect on their contribution, even if it was more negative.
On this view, any contribution-increasing or contribution-reducing effects would operate by changing the social atmosphere around altruistic projects. Use of the certificates system may tend to replace a warm-and-fuzzy view of altruism with a more calculating and transactional view of altruism, which has both costs and benefits.
The impact purchase 