Saturday, October 20, 2007

It's not about the mileage...

"Oh, it's not really about the gas mileage, it's about the power. This thing has 340 horsepower, and will do zero to sixty in under six seconds, and I can still feel good about it." - new owner of a Lexus hybrid.

When we started GlobalGiving a few years back, there was much fanfare about the concept of social return on investment. The idea was that philanthropic donations are analogous to financial investments, except that the return is social in nature (# of children educated, workers trained, etc) rather than financial.

But I soon realized that most people do not use an "investment" mentality to make decisions about their philanthropy. Instead, I found, philanthropy is much more like consumption than like investment. People derive immediate gratification from the act of donating and supporting a group. Often a donation is much more about the donor than the donee.

Katherine Fulton of the Monitor Institute agrees that philanthropy is not like investment. A couple of years ago, she defined philanthropy as "an expression of values" by the donor. I thought this was right on, and I started using her definition instead of my own.

But lately I have started thinking that maybe we are saying the same thing. Consumption often is an expression of values, not simply a calculated act of getting the most for your money.

One of best known examples of this is the popularity of the Toyota Prius. By most analyses, it takes many years of driving to recoup the extra cost of the the hybrid engine, despite the much higher miles per gallon. When you ask people why they buy the car despite the long pay back period, they will often say "Oh, well I bought this thing just to show I care about the environment."

Here is another example. I recently bought a Subaru Outback. It is a very popular car among people who care about the environment, and I have been amazed at the "brand" that this car has built among environmental activists. I like this car for performance reasons (it will go anywhere, winter or summer), and I like being a card-carrying member of the enviro-community. But here is a paradox: My Subaru gets lower gas mileage than many BMWs.

And last weekend while at the Solar Decathlon on the mall in Washington, DC, Mari and I ran into a friend. She told us she was going to install solar panels on her roof. I told her that we had considered that but that the payback period was so long it did not seem feasible. "Oh, I am not doing it for the pay back, I am doing it because I like the idea of solar power."

So consumption is often "an expression of values," too, just like philanthropy.