Canadian Charity Impact Fund Selection Criteria
The Canadian Charity Impact Fund (CCIF) is a unique philanthropic donating vehicle that should help ensure high-impact per dollar for some of Canada’s neediest individuals. Success Markets Inc. (SMI), a third party impact analysis organization, has undertaken Social Return on Investment (SROI) research on approximately 50 social service charities in Canada that have previously been identified as highly effective charities by existing Charity Intelligence (Ci) analysis.
The SROI analysis has resulted in interval and most likely single SROI estimates that should be around 70% accurate for each charity, both in total and for the components of the benefits that accrue directly to the charity’s needy clients, as opposed to greater Canadian society. These two SROI distribution estimates have been used as the inputs into the selection of the CCIF.
For both the total charity SROI and the beneficiary SROI, three metrics were scored: the best estimate score, a certainty score representing the likelihood of lower than expected SROI results, and an upside score, representing the likelihood of greater than expected SROI results. A weighted sum of these three metrics gives the overall score and beneficiary only score respectively. The final score is a weighted average of these two scores.
The ten highest scoring charities in our social service sector database were selected for the CCIF, with the proviso that no single sector can have more than three charities. This proviso ensures diversity of programming that aids in reducing the overall downside risk of obtaining lower than expected impact overall.
Best Estimate Score:
The best estimate score ranges from a low of 0 to a high of 100. For each charity it represents where their best estimate lies within the range from the greatest best estimate to the lowest best estimate. The equation is given as follows:
The charity with the highest best-estimate SROI will have a max score of 100 and the charity with the lowest best-estimate SROI will have the minimum score of 0.
The Certainty Score ranges from a low of 0 to a high of 100. For each charity it represents the probability, given the assumption of a 70% accurate interval and a best estimate, that the true SROI is above 5. Charities with greater scores are less likely to be lower impact charities and are thus thought of as less risky donation options than charities with lower scores (and thus a greater probability of having a low SROI).
The Upside Score ranges from a low of 0 to a high of 100. For each charity, it represents the probability, given the assumption of 70% accurate interval and best estimate, that the true SROI is above 15. Charities with greater scores are more likely to have incredibly high impact than charities with low scores, and are thus viewed as having a very high upside in terms of potential impact.
For each charity, a Best Estimate, Certainty, and Upside Score is calculated, using only the 70% accuracy interval estimates for the SROI that only values direct beneficiary benefits (thus, leaving out benefits to larger society). The beneficiary score is a weighted sum of the three component scores. Both the Best Estimate and Certainty Score are given weights of 4 and the Upside Score is given a weight of 1. Thus, the maximum possible beneficiary score is 900 and the lowest possible is 0.
The weights were determined through a small focus group that was asked which charities they would choose to donate to given a choice from a small set of hypothetical 70% accurate interval SROI estimates. The result of this focus group was that a small set of informed donors strongly consider both best estimates and riskiness in their choices, but that potential upside was not a large component of their decision. For this reason, both the best estimate and risk scores are given four times the weight of the potential upside score at present.
For each charity, the same process taken for the Beneficiary Score was undertaken using the 70% accurate interval estimates for the whole of the charities benefits created, and not just the benefits to direct beneficiaries. The same weights were used to obtain a total score, with a maximum value of 900 and a minimum value of 0.
The selection score, used to make the final selections for the CCIF was calculated as a weighted average of the Beneficiary and Total Scores. The Beneficiary Score was given a weight of 70% and the Total Score a weight of 30%. The maximum value of the selection score is 900 and the minimum is 0. Of the 10 charities selected using the selection score, the highest scoring charity received 760 and the average received 525. The average score of selected charities is almost double the overall average of 265 for all charities considered (and 195 for unselected charities).
Click here to donate to the CCIF and select option 2 on the dropdown menu.