Charities that work

Charities that work

Jeff Bezos had a question. He’s the CEO of Amazon where his central operating philosophy is a focus on the long term. But on issues of philanthropy, Bezos said he wants to do the opposite and instead focus on the right now. Seeking new philanthropic ideas, he turned to Twitter and he wanted to hear from two camps:

  1. people with ideas about how to help people “at the intersection of urgent need and lasting impact” and,
  2. people who think the people in the first camp take “a wrong approach”

After a few days, 46,000 people had responded. If you’re ever under the impression that people can’t be bothered to care about anyone but themselves, read that thread. It’s overflowing with energy and ideas about how to make the world a better place for life on the planet.

People in both camps, let’s call them Camp 1 and Camp 2, mostly agree that philanthropy should focus on what’s unfair or broken in our world. The dominant concerns ranged from poverty and health care to justice, war, famine and climate change. But the two camps differ on how best to address those issues. Camp 1 is focused mostly on the effects on people of those issues and Camp 2 is focused mostly on causes of the same. Both camps agree that donating money to a variety of causes is a good way to bet on a variety of positive outcomes.

So the question remains: in a world with limited resources, is it better per unit of outcome to address the causes of a problem or the effects? Should we work to alleviate suffering in the longer term by changing the system? Or should we work to help the people suffering now with an eye on “the lasting impact”? It’s likely impossible to say for certain how best to approach addressing the world’s ills.

And this uncertainty is where Effective Coffee fits in.

People & Value

At Effective Coffee we start with the notion that people everywhere have equal value. That sounds like an empty platitude to some, but in fact it’s a deeply radical notion – and one embraced by three of the worlds richest people, no less. Bill and Melinda Gates alongside Warren Buffet have long been engaged philanthropists. Their focus is on maximizing the potential of as many people as possible, no matter where they live. It starts for them by recognizing that all people have equal value. They take a long view, working to cure diseases and make system level changes. They are Camp 2 people, focused mostly on addressing the causes of inequality.

Compare that to Jeff Bezos’s request for ideas about how to help people right now. He’s interested in addressing the effects of inequality. Mostly a Camp 1 person.

For much of the 20th century, people in Camp 2 were often the titans of their industries. After making their millions or billions they began looking to positively affect the world by spending big money on big ideas. Addressing the effects of inequality was left primarily to smaller donors who wanted to chip in here and there, supporting efforts that fit their interests or life experience. Of course, the truth of it is that almost everyone stands in both camps if only to varying degrees.

Causes & Effects

The premise of our operation is to address both the causes and effects of inequality and to do so inside a consumer space.

On the sourcing side, we’re structured to address the system level causes of inequality. We do this by purchasing green coffee at prices that make sense for the costs and care that coffee producers commit to their product. Effective Coffee believes that coffee producers should thrive from their work. This approach is quite different from industry norms, which treats specialty coffee as a special tranche atop the global commodity market. Generally farmers who trade in commodities are expected to produce their product without knowing its value at the end of the process. If demand dries up and the commodity price sinks, the burden falls to producers, who are the most vulnerable people in the supply chain. We think this is wrong.

To be fair, many roasters in the specialty coffee market also recognize the injustice of this system and work hard to pay a fairer price. Mostly this is done by paying a series of premiums for certifications (such as Organic, Fair Trade, Rainforest Alliance, etc) and a premium further for the quality of the coffee. Even beyond that, many specialty coffee roasters work closely with farming communities to improve the quality of life there by paying a social premium. Still, when the market shifts the burden falls to producers first and most coffee roasters are under little obligation to share that burden. Some roasters may elect to help out and may even do so substantially! But the core of the system is one of severe power imbalance.

For Effective Coffee, it’s this power imbalance that is a cause of systemic inequality. Instead of seeking to pay as little as possible for our green coffee, we pay for green coffee such that it constitutes about 20% of the retail price, on average. Over time, we’ll be able to introduce a new data point on our Facts page to further illustrate this idea.

In addition to the price we pay for green coffee we also donate a percentage of our revenue that’s connected to how many subscribers we have. That donation goes to address the effects of inequality. The charities we support operate primarily in developing countries and are centered around addressing health and poverty. Currently, our weekly donations go to [randomize category=”weeklycharity”].

A Small Answer

Effective Coffee does not believe our model is the best one for making money – coffee is a very competitive market that’s saturated with players big and small. And neither is ours the best model for charitable giving. After all, our subscribers could simply donate the money they spend on our coffee.

But we do believe in something grand, and it’s this:

All people deserve to live well. For those of us lucky enough to be living well, we should enjoy it. And then we should share.

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1 thought on “Charities that work

  1. Every situation is different obviously, but my belief is that pitching a tent right in the middle of those camps is the best approach. If I were walking through Flint Michigan with a big bottle of nice refreshing clean water a while back and I saw someone sick, and in need of some clean water, I would quickly offer my water to them, as I have plenty and can easily get more any time I want. They needed that water immediately and that should be priority number one, but after that, I would look to figure out the reason why there was no clean water available to them, or else it would happen again and again.

    As far as Effective Coffee’s approach to charitable giving, I think it’s pretty solid. While no model is a perfect one, I think this works on a few different levels. I agree that people could give the money directly to a cause, but I also think folks who give money to charities they believe in, are going to do that regardless anyway. I think the Effective Coffee approach will do well in attracting people who don’t normally donate to charities for one reason or another to also make donations, even if it’s in a non direct way. Someone may come across this, or have a friend recommend they check out the site, and ultimately say “Well, I buy coffee anyway, might as well buy it here and let some of the money go to a good cause.” So there you go, money donated to good causes just increased where it otherwise wouldn’t have.

    Finally, coffee is the perfect product for this model. It’s a social beverage that we often enjoy with other people. Hopefully this encourages people to sit down with each other and enjoy a pour together on a much larger scale.

    Not sure if any of that made sense, I hope it did. It is nearing 1 am though and my thinking maybe a little cloudy.

    Maybe I should go have a cup of coffee.

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