[Guinness Relay] Can charity be sustainable? What is the path to creating a system that doesn't end as a one-time event?

When I was attending business school to earn my MBA, a friend said this to me.

"I feel like charity ends up being a one-time thing and doesn't last, doesn't it?"

Those words still remain in my heart like a warning bell.

Many people gain a sense of satisfaction from charity, thinking they have 'done a good deed.' However, why do so many of these efforts end after just one time?

Why doesn't charity last? Reflections from behavioral economics

In the first place, charity is a gratuitous act to help those in need. It refers to all activities based on goodwill, such as donations, volunteering, and disaster relief.

However, there is data showing that even if people donate or provide support once, few continue to do so.

This is not a coincidence and can be explained from the perspective of behavioral economics.

First, 'present bias' has an influence.

People tend to prioritize immediate benefits or pleasures over the future, and the long-term social benefits of donations or volunteering are inevitably put on the back burner.

Certainly, there is a sense of accomplishment and fulfillment gained from the initial support. However, that does not last long. By being immediately pulled back into daily life, the act of goodwill is interrupted after just one time.

Also, the psychology of 'loss aversion' cannot be ignored.

The money and time spent on charity are perceived as a loss in the sense that the return is difficult to see. Especially in economically unstable situations, people tend to think, 'Shouldn't these funds be used elsewhere?'

So, how can we turn charity into a sustainable system?

How can we make charity sustainable?

So, how can we turn charity into a sustainable system?

A clue lies in the idea of viewing charity within a 'business context.'

For example, TOMS' 'One for One' business model means that when you buy one pair of shoes, one pair is donated to a child in a poverty-stricken area.

Consumers gain the satisfaction of 'directly supporting someone by making a purchase,' and companies can simultaneously increase their brand value and sales.

Through such systematization, a continuous flow of charity is created.

Visualizing Results: Setting KPIs

What is even more important is to visualize the results.

From the perspective of behavioral economics, when we can see the concrete results of our donations or support, we find it easier to perceive the gains rather than the losses.

By providing regular feedback on the changes in those we support and sharing success stories, we can contribute to the self-reliance of the beneficiaries and help maintain the motivation of the supporters.

In other words, it is necessary to set KPIs (Key Performance Indicators) for the outcomes of charity and disclose the numerical data.

For example,
・Social Impact (number of people supported, amount of CO2 reduced)
・Business Metrics (sales, repeat rate)
・Engagement Metrics (number of SNS followers)

By using these indicators, we can visualize 'what happens when I donate?' and I believe this serves as motivation to continue supporting.

Summary

Of course, there are still many challenges.

Issues such as tax incentive systems, governance transparency, and how to overcome the tendency for beneficiaries to become dependent on support are not simple to solve.

However, considering that our psychological biases play a major role in why charity does not last, it can be said that the solution lies in 'systematization'.

I view charity as an economic activity to make society better.

Having spent a long time in the world of management and finance, and having studied behavioral economics, I understand to some extent the reality that 'good intentions alone are not enough to sustain it'.

But conversely, I believe that by incorporating business methods, charity can be sufficiently sustainable.

By each of us setting clear performance indicators (KPIs) and providing support, we should be able to create a future where social issues can be solved.

'Good intentions are important, but to keep them going, you need a system'.

I can now answer that friend's comment.

Through the lens of behavioral economics, we can overcome our own biases and ensure that charity does not end as a one-time effort. Isn't it beyond that point that a better society and our own personal growth await?

#GuinnessRelay

⭐️ About the Guinness Relay

The background for writing this article is that I was invited to participate in a charity project through an introduction from J-Oyaji-sama.

◾️ Here is the introductory article for the project.

◾️ Here is the guide to the articles regarding J-Oyaji-sama's project.

◾️ The noter from whom I received the baton is Shigeki Morimoto-sama.

* The recipient of the baton has not been decided yet, so please, someone who agrees with the project,please take the baton!

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