The initiative, a partnership between veterans of Canada’s climate fight and relative newcomers, raises the ante, with deep-pocketed foundations and wealthy individuals stepping into the limelight to demonstrate their willingness to spend large sums at a time when many governments seem to be retreating from climate policies.

Two prominent foundations – the Trottier Family Foundation and the Peter Gilgan Foundation – contributed $250 million, with the balance coming from smaller and newer funds, including one set up by direct-air-capture pioneer David Keith, a University of Chicago physicist who last year sold his start-up, Carbon Engineering, to Texas-based Occidental for US$1.1 billion. The Ivey Foundation also recommitted an earlier pledge of $100 million.

According to a press release, “the new commitments were made through the Climate Champions initiative, coordinated by Clean Economy Fund, which has the goal of tripling climate philanthropy in Canada from roughly $100 million to more than $300 million per year by 2030.” The Clean Economy Fund released data in September indicating that Canadian climate donations – $106 million in 2022 – represent less than 1% of all giving.

The committed funds will be allocated by the individual foundations, according to their own philanthropic programs, which may direct grants to advocacy, technology, policy-making or other initiatives, Eric St-Pierre says in an interview. St-Pierre is the executive director of the Trottier Family Foundation, which has long been active in climate philanthropy. “I would say this $405 million is first a pledge, it’s a commitment, and it’s basically a call to action.”

The target audience for this appeal, however, is definitely not mass-market. For the past two years, according to St-Pierre, officials from Trottier and a few other climate philanthropies have been quietly meeting with high-net-worth individuals and families, sounding them out on committing donations to some aspect of the fight against climate change.

This outreach campaign has sought to help smaller foundations figure out how to dip their toes in a space that can involve a good deal of technical complexity, as well as uncertainty as to the effectiveness of those donations. In many cases, wealthy families will set up family foundations with very specific philanthropic goals – healthcare, humanitarian relief, culture, scholarships, et cetera. “We’ve been sitting down for coffee, trying to explain the work that we do, trying to answer questions, trying to bring them along,” St-Pierre says.

An evolving approach to climate philanthropy

Historically, a large chunk of climate-adjacent philanthropy has gone toward conservancy organizations that buy ecologically sensitive land and establish anti-development easements that will protect those tracts in perpetuity. These gifts are also eligible for various types of tax exemptions.

Advocacy groups that target mainly individuals for support have been the other long-standing fixture of climate philanthropy, with donations underwriting lobbying, legal challenges and public action campaigns.

More recently, some foundations have invested in both advocacy and impact funding, meaning investments in either not-for-profit or for-profit revenue-generating activities, or technology start-ups, that may bring some kind of environmental benefit as well as a return on investment. But even climate-focused foundations acknowledge it will take trillions of dollars in private capital to transform and decarbonize massive sectors like energy, transportation and building materials.

Some climate philanthropists now position their role as catalysts pursuing a “theory of change,” with funding that underwrites or supports emerging economic activity, such as electric vehicle supply chains or green steel. “One of the fundamental ways in which we observe and measure this effect is in the unleashing of capital,” observed Eric Campbell, executive director of the Clean Economy Fund, in a recent blog post. “Like the small-sized domino, well-targeted and well-timed philanthropic capital can unlock much greater amounts of public and private capital.”

St-Pierre says that some climate foundations have explored the idea of establishing a pooled climate fund, to which smaller and less experienced, or less well-resourced, family foundations could contribute. “We had looked at that initially, and we’re keeping that option on the table,” he says. “There might be some foundations that might not want to make the decision on where to allocate to specific funders.”

For the time being, the foundations that signed on to today’s commitment will be able to coordinate some of their giving through the Climate Champions initiative, which is a program by the Clean Economy Fund.

Given the broad political swing to the right, and the Trump administration’s signalling that it will pull the United States out of the Paris Agreement, it might seem as if such efforts, even well-financed ones, are destined to hit a wall. But St-Pierre says he remains optimistic, noting the precipitous fall in solar and wind prices, as well as the dramatic take-up of EVs in China.

He also points out that when he talks to wealthy families, he no longer has to spend much time convincing them of the issue. “They get it. They’ve seen Jasper burn down, or they’ve witnessed smoke through their communities, and they’re probably physically feeling the effects of flooded basements. There’s no need to convince people of the gravity of climate change.”

Disclosure: John Lorinc has been retained independently by the Ivey Foundation to write a report on their efforts to wind down their granting operations.

John Lorinc is a Toronto journalist, author and editor. He writes about cities, climate and cleantech.

The post Some of Canada’s wealthiest families are putting up $405M for climate change efforts appeared first on Corporate Knights.

As an environmental studies student at McGill University at a time when the climate crisis was far from a household name, she knew much more about it than her father, Lorne Trottier. The difference between him and the next skeptical early-aughts dad, though, was that he had the means to do something about it.

Lorne Trottier is a co-founder of Matrox Electronic Systems Ltd., a Montreal-based tech company that in 2022 sold its imaging unit for $875 million. Founded in 1976, Matrox was successful enough by the year 2000 that Trottier and his wife, Louise Rousselle Trottier, created a family foundation to share their wealth. For several years, the foundation focused primarily on big gifts to hospitals and universities.

Fast forward to now, and Sylvie Trottier sits on the board, her husband, Éric St-Pierre, is executive director, and under their leadership, the foundation committed in 2020 to giving $8 million a year to support climate action. Earlier this year, Trottier formed a family office, a type of private-wealth-management firm often established by high-net-worth families, and plans to apply an environmental, social and governance (ESG) lens to her family’s private investments.

But the seed was planted back when Trottier managed to convince her dad to take the climate crisis seriously. She’s humble about it – “The science was there; it wasn’t just me,” she says with a laugh – but it’s an example of the ways in which scions of the wealthiest families in North America are reshaping the corporate philanthropic landscape. And it comes at a critical juncture, where the passing of the guard intersects with a major existential planetary crisis.

Toronto-based research firm Strategic Insight estimates that a trillion Canadian dollars will have been passed from Canadian baby boomers to their descendants by 2026, and Boston-based research firm Cerulli estimates that by 2045, a whopping US$72.6 trillion will transfer between American generations. Unlike the existential dread that plays out in the hit HBO show Succession, experts say this great transfer represents an opportunity for family wealth to be stewarded and redistributed in ways that make a dent in the most daunting threat the world faces: climate change.

And many heirs are seizing that opportunity – from William Peterffy successfully pitching his American billionaire father to become Interactive Brokers Group’s first director of ESG affairs, to textiles heiress Veronica Chou using her portion of her family’s US$2.7 billion to build an environmentally friendly clothing label. Even fossil fuel heirs are joining the fight: Aileen Getty, the granddaughter of a major American oil-marketing company, has channelled her wealth into climate philanthropy and supporting climate protests. North of the border, major oil executive Kevin Krausert left his family’s Alberta-based Beaver Drilling Ltd. to co-found a venture capital fund that backs technologies transitioning the energy industry away from oil and gas.

“We need more giving and less hoarding,” says Carolynn Beaty, another successor of a family foundation, the Sitka Foundation. She left her job as a teacher in 2018 to work full-time as its executive director. Beaty’s father, Ross Beaty, founded and ran Pan American Silver Corp., the second-largest silver-mining company in the world, before pivoting to launch renewable-energy company Alterra Power Corp. in 2008. That year, Beaty and his wife, Trisha Beaty, launched the Sitka Foundation, which has focused from its inception on funding projects that protect biodiversity.

We sometimes save money for rainy days, but it’s raining. We need to address our problems because it’s pouring outside.

 

—Carolynn Beaty, Sitka Foundation

On giving and hoarding, Carolynn Beaty is speaking specifically to the world of philanthropy, where many charitable foundations dole out grant money at a pace that doesn’t deplete their endowments so they can continue to exist for years to come – for family foundations, this perpetuity can be tied up with notions of legacy. On the other hand, there’s a growing movement of private foundations choosing to “spend down,” or grant out all their money within a short period of time, many prompted by the urgency of climate change.

“We sometimes save money for a rainy day, but it’s raining,” Beaty says. “We need to address our problems, because it’s pouring outside.” The Sitka Foundation isn’t planning to spend down, but Beaty is clear: she wants her family’s legacy to be one of wealth redistribution. She’s vocal in encouraging other wealthy families to adopt this mindset, too.

Trottier is a member of a global group called Millionaires for Humanity, which advocates for a global wealth tax of 1% on multimillionaires. Other Millionaires for Humanity include Walt Disney heiress Abigail Disney and Austrian chemical and pharmaceutical heiress Marlene Engelhorn, who makes headlines regularly for her wealth-redistribution advocacy. Trottier says philanthropy isn’t enough, that structural changes like taxation are required to meaningfully address social and economic inequality.

Some critics argue that family philanthropy can serve to reinforce systemic inequality. In a 2020 paper, U.K.-based philanthropy researchers Jessica Sklair and Luna Glucksberg write that wealth managers promote family philanthropy “as a ‘succession planning strategy’” – since younger generations can be more attracted to the idea of using the family business for the common good – and in doing so, “attempt to legitimise the extreme accumulation of wealth among the super-rich.” It’s a process that the researchers conclude serves to “obscure the ways in which growing wealth accumulation drives the widening chasm of economic inequality seen around the globe.”

For many business-owning families, the urge to hold on to their wealth can be strong, says Olivier de Richoufftz, general secretary of Family Enterprise Foundation (FEF), a charity focused on research and education around family enterprises in Canada. “And protection [of wealth] is not the driver that the family enterprise needs in order to help society as a whole.” That can mean holding on to extractive and destructive business practices to continue maximizing profit, never mind giving away that profit to charity.

According to FEF, more than 60% of the country’s family businesses (which together generate almost half of Canadian private-sector real GDP) are expected to change ownership within the next decade. Interestingly, more than 80% of business family members aged 18 to 24 say keeping ownership in the family is either extremely important or very important to them – compared to around 70% of those over the age of 44.

“There’s much at stake about . . . the family reputation, the legacy, the harmony of the family, but also the responsibility that those businesses have toward society,” de Richoufftz says.

Of course, there’s plenty of research showing that millennials and Gen Zs are more worried about climate change than baby boomers, so regardless of whether businesses remain family-owned, there could be a shift in practices toward environmental sustainability as a new generation of workers moves into leadership. But some say family enterprises present a unique opportunity for impact. “Most family businesses . . . are more values-driven than publicly traded companies,” says Matt Knight, the executive director of the Alberta Business Family Institute.

There’s much at stake about . . . the family reputation, the legacy, the harmony of the family, but also the responsibility that those businesses have toward society.

 

– Olivier de Richoufftz, general secretary of Family Enterprise Foundation

The problem is they can also be less structured, especially if they’re still run by first-generation founders. Most family businesses, despite saying they’re driven by social values, don’t have clearly defined ESG statements, Knight says. A succession or a younger family member joining the leadership team is often a prompt for a family enterprise to “professionalize.” Knight says family businesses should focus on the “G” in ESG before they can meaningfully implement the “E.”

On the family philanthropy side, too, this rings true for the Trottier Foundation. When the foundation hired Sylvie Trottier’s husband, St-Pierre, in 2016, it was the first time they had paid staff.

That was around the time the foundation started pivoting toward funding the climate fight, too. St-Pierre says there’s space for many more family foundations to start funding climate action.

“The reality is a lot of the wealthier families are often approached by very well-paid fundraisers from hospitals and universities, so they get all of their attention . . . and then they want their name up on a wall,” he says. “There’s a lot of work to be done to [help] those families realize, actually, there’s stuff you can fund on climate that’s equally as important and extremely urgent.”

Kylie Adair is a Montreal-based journalist.

The post Succession: Climate edition appeared first on Corporate Knights.

In an age of heightened interest in ESG (environmental, social and corporate governance criteria), similar critiques have been directed at foundations and endowments that allow wealthy philanthropists to tax-shelter huge riches in exchange for doling out a trickle of income to worthy causes. In Canada, foundations have been required to disburse as little as 3.5% of assets, although the federal government this year bumped that number up to 5% – an improvement but still a fairly modest amount.

Environmental charities face a particularly challenging task in securing both foundation disbursements or direct donations. While the environment ranks as Canadians’ third-highest priority for giving among all charitable causes – about 36% ­– the actual amount donated is much smaller: in the range of 2 to 5%, according to data compiled by Charity Intelligence and CanadaHelps, or about $500 million of the $10.6 billion in giving in Canada in 2020. Much of the giving, including tax-exempt donations of land, goes to conservation organizations.

Against that not-so-green backdrop, the Toronto-based Ivey Foundation’s decision, made public in late November, to spend down its entire $100-million endowment on environmental and climate-related causes by 2027 is a big deal, with potentially seismic implications.

Ivey, Canada’s sixth-oldest private family foundation, has made strategic investments in non-profit organizations like the Transition Accelerator, the Institute for Sustainable Finance and Efficiency Canada, all of which are focused on boosting the green economy. “These organizations are having a significant impact and have some of the smartest people in the country now working for them,” says Ivey CEO Bruce Lourie. “For us, it’s a great opportunity to really double down and give them the support they need to really push us to the next level. What we’re doing really strategically is looking at where are the opportunities for Canada to succeed in a future low-carbon economy.”

Lourie says the target sectors include the electric vehicle supply chain, clean grids and hydrogen, as well as clean technologies such as heat pumps for space heating. Yet, as he notes, the transition won’t happen solely because emerging green technologies mature to the point of economic viability. They need a nudge, and that nudge often comes in the form of a regulatory barrier – a hard emission cap, for instance, or a mining application that was refused because the proponent didn’t have satisfactory remediation systems in place.

What we’re doing really strategically is looking at where are the opportunities for Canada to succeed in a future low-carbon economy.

Bruce Lourie, CEO of the Ivey Foundation

“My firm belief is that probably the largest driver of change is creating a policy environment that basically supports the kind of transition we’re talking about,” he says, citing the  U.S. Clean Air Act and California’s fuel efficiency regulations as examples, both of which drove an immense amount of innovation. Incumbent industries, however, fight such regulations.

“Canada has among the most risk-averse businesses on the planet,” Lourie says. “In all the work that we’re doing, I would say the area that is the most difficult to develop in Canada is business leadership. In the absence of business leadership, we actually need regulations to move us at the pace that we need to move at.”

“You have to have alignment between policy and regulatory tools and financial tools.”

While there’s no shortage of problems to solve, Ivey’s big bet is that its nine-digit capital infusion packs enough of a punch to force Canada’s political and business leaders to, well, act.

The post Should philanthropic foundations empty their coffers to spend it all on climate now? appeared first on Corporate Knights.

If you’ve donated money to a water charity, congratulations. You’ve stepped up to try to solve one of the world’s most pressing problems–the fact that roughly 750 million people do not have access to clean water.

Has your donation made a lasting difference? That’s hard to know.

Big water charities point to numbers that, they say, demonstrate their impact. Since its founding in 2006, charity: water says it has funded 16,138 water projects. Water.org, in its latest annual report, says that in 2013 it completed 174 community-based water projects, constructed 73,081 toilets, established 66,632 household water connections and served 606,012 people with water and sanitation. In 2013-2014, Water Aid says it reached 2 million people with water and 3 million with sanitation.

But the charities, as a rule, do not report on how many of those projects are providing clean water a year, two or five years after they were built. Some don’t know. That, by itself, is a sign that something’s amiss.

As it happens, the poor countries where these charities operate are littered with water projects that need repair. In what is admittedly an old study (2009), the International Institute for Environment and Development said there are 50,000 broken rural water points across Africa that represents a failed investment of US $215-360 million. Newer data on failure rates for water projects can be found here. Up to 40 percent of  rural water systems fail prematurely, and less than one percent of water, sanitation and hygiene projects have long-term monitoring, according to US AID.

That’s unacceptable.

This isn’t a new problem. Here’s Ned Breslin, the CEO of nonprofit Water for People, in a 2010 essay called Rethinking Hydro-Philanthropy:

Africa, Asia and Latin America have become wastelands for broken water and sanitation infrastructure….the general public is shielded from these hard truths as perceptions of failure could threaten “the cause” of reaching the unserved.

The images that dominate the sector—pictures of children happily gulping water from a new tap or the counter-image of women collecting water from dirty puddles—do not tell the whole story. The real image should be the one that plays itself out every day all over the world of the woman walking slowly past a broken hand pump, bucket at her side or on her head, on her way to (or from) that scoop hole or dirty puddle that she once hoped would never again be part of her life.

A new culture of accountability and transparency that transcends the nonsense that currently masquerades as reporting in the sector must emerge if poor people worldwide are to truly emerge from the drudgery of water collection.

Strong words. The good news is that the big water charities acknowledge this problem. Some formed a network called Sustainable WASH to focus on the durability of water, sanitation and hygiene projects. Others are using digital technology for monitoring.  All are taking meaningful steps to track the sustainability of their projects.

Christophe Gorder, the chief global water officer of charity: water, says:

The pace & scale at which we’re collecting data on water points is unparalleled in the WASH industry. We still have a long way to go in terms of organizing, analyzing, understanding and acting on all this information. But, we are very committed and making good progress.

As a newcomer to the sector, I’ve begun to learn about water NGOs from reading their websites and talking to experts. It’s a complicated business, to say the least. While almost all the NGO websites display pictures like this one of smiling children enjoying clean water, they deploy different strategies, work in different countries, and focus on different markets, i.e., rural, urban or peri-urban (a fancy word for places next to a city). Some like charity : water are predominantly facilitators or middlemen: They raise money and distribute it to local partners who develop and build projects. Others like Water for People (which gets big donations from charity: water) are vertically integrated, raising money in richer countries and employing staff in the global south to build and manage projects. Water.org is best known for its Water Credit program, which provides access to small loans (average: $194) to people and entrepreneurs to spend or invest in water or sanitation projects, typically water taps or toilets. Whenever possible, Water Aid works with functioning local governments that are willing to insure that users will receive water and sanitation services over time.

Here’s what I’ve learned, so far:

Water charities are growing fast

Globally, Water Aid, the biggest of the charities, which is headquartered in London, raised £81.8 million (roughly $123 million) in 2013-14; five years earlier, it raised £43.8 million ($65.8 million). In 2013, charity: water raised $35.9 million, up from $6.2 million in 2008. During that same five-year span, revenues at water.org more than doubled to $12.4 million from $5.5 million (when the organization was known as WaterPartners). While some gains can be attributed to the economic recovery, water is undoubtedly a hot sector.

Give charity: water credit for its fundraising savvy. (This is an organization with a 63-page brand book. Really.) Its founder, Scott Harrison, a darling of Silicon Valley, has been profiled in The New York Times magazine, Fast Company and Wired. It’s easy for supporters to start their own campaigns — more than 64,000 have done so, many at birthday parties — and it promises that it will “send 100% of what you raise directly to the field.” Private donors and foundations cover staff salaries and overhead; this is an appealing pitch, although it reinforces negative stereotypes about overhead.

Water.org has Matt Damon, who by all accounts has invested his time and smarts in the nonprofit. As if that weren’t enough, corporation foundations love the microfinance model. Donors include the foundations of PepsiCo, Mastercard, Bank of America, Caterpillar and IKEA, according to Inside Philanthropy. 

Nevertheless, it’s important to recognize that charity can’t possibly solve the global water crisis. “For about $30 a person, we know how to help millions,” says charity: water. At that rate, providing clean safe water to 750 million people will cost $22.5 billion.

It’s hard to evaluate water NGO’s.

GiveWell, a organization I admire, investigated water charities back in 2011 and was unable to “prioritize” any of them as a top charity. GiveWell is careful to note that this does not constitute a negative ranking of the charities; some declined to provide the very detailed information that GiveWell sought, and others were “de-prioritized” for reasons that remain unclear. In 2013, GiveWell did a thorough review of research into water quality innovations like filtration and chlorination to see how effective they are at preventing waterborne diseases, particularly diarrhea. It found that “in development world settings where diarrhea is endemic, because of a lack of sanitation, hygiene and access to safe water, the evidence for the effectiveness of these interventions is unclear.”

Sustainable WASH has encouraged water NGOs to sign its charter (many have done so) to complete a self-assessment (fewer have done so, they’re listed here) and to conduct third-party assessments of their sustainability (a work in progress, none have done so). Building off the work of a small foundation called the Fontes Foundation, Sustainable WASH is supporting the development of a metric called Water Person Years that would measure the number of people served over time. “That changes the whole incentive structure,” says Brian Banks of the Global Water Challenge and Sustainable WASH.

Naively hoping to get some reliable numbers myself, I asked Water Aid, charity: water, Water.org and Water for People how many projects they installed in 2010 and whether they are working, five years later.

None of the four charities had begun comprehensive monitoring in 2010, so I couldn’t get answers, although all provided selected data by email.

At charity: water, Christophe Gorder said that during Q1 of 2015 the group visited 1,089 sites that were two to eight years old, and found that 87 percent were still working. 

Water.org said that a third-party evaluation of about 9,132 loans, most in India, had found that “97 percent of the water improvements were found to be in working condition.” I asked to see the report and was told it wasn’t public.

Vincent Casey, a program manager with Water Aid, told me that “a study of four countries (one from each region we work in) looking back five years found that in the case of water supply, 76% of 2560 water points installed (serving approximately 307,000 people) were still working. Around 24% were down but of these, 40% were due to be fixed the following week.”

Water for People has the most extensive reporting–no surprise since Ned Breslin has been outspoken about sustainability. It devotes a platform called Re-Imagine Reporting to detailed, country-by-country results of its monitoring, including financial data. Its monitors use a software platform called FLOW that was developed by Water for People but, because of significant demand from others, was transferred to a Dutch nonprofit called Akvo, which makes it available to numerous NGOs, foundations, governments and companies. Mark Duey, a Water for People executive, to me by phone that monitoring and evaluation “sounds boring. It’s not sexy, But it’s really critical.”

The results of these surveys are not comparable. Nor does the industry have a good benchmark of what constitutes success, as Vincent Casey of Water Aid explains:

There is not enough data from enough places with sufficiently robust benchmarks to cross compare. Data from one district where the local government is well capacitated and where there is a diverse economy generating sufficient revenue to keep services running may show higher percentages. Data from a poor, remote, marginalised district with weak local government capacity and a limited cash economy may show lower percentages. Comparing the two without taking the background context into account would be like comparing apples with pears.

So I asked a couple of smart people…

In theory, could a donor or group of donors – or even a smart grad student, with time  — identify the most effective water NGO?

Here’s how David Zetland, an academic, a blogger at Aguanomics and author of a new book called Living with Water Scarcity, responded:

Well, you’d have to run a randomized trial, “giving” water to half the communities and leaving the other half to figure out their own solutions.

Then you’d want to compare health and wealth outcomes after a few years, to see if the charities had impact.

If I had a grad student on this for a few years, I would have them compare baselines for ALL charity-assisted villages and THEN compare those after a few years to see how the charities ranked in their relative outcomes. That’s feasible, in the same way as it’s feasible to compare survival rates from heart surgery across hospitals or university graduation rates, BUT you need to try to compare for the baseline. Some charities may be better at picking good villages. Others may be better at building capacity. The first should not get as much credit as the second.

Bottom line: it’s possible and feasible but it takes time and effort and… “program evaluation” is VERY under-pursued for obvious reasons (don’t look a gift horse in the mouth, even if it’s dying…)

Brian Banks of the Global Water Challenge said:

The difficulty comes not only from data availability (which we’re working to address through the Water Point Data Exchange), but in the question itself. Effectiveness is an incredibly difficult to define…You have water treatment initiatives, pipes and taps projects, so called “software” or capacity building projects, projects that incorporate more or less hygiene, and some that involve environmental protection….

Unfortunately, the sector still hasn’t come around a single definition of effectiveness, or even a single goal for water projects (i.e. economic empowerment, health improvement, educational outcomes, etc.). In this way, a highly effective project that focused extensively on capacity building may directly impact fewer people (i.e. higher cost per water person year), but be effective in improving the sector at large. There just isn’t a great way to compare apples to apples, as every project has so much nuance, especially when considering aspects such as reliability, affordability and quality.

In short, while there is merit in exploring this, it has proven to be exceedingly difficult to compare different organizations against a common standard of effectiveness.

Well, that’s discouraging, but…

The water charities are getting better at monitoring.

You’re going to have to trust me on this, because this post is already long. But all of the water charities understand that monitoring is vital, not merely to appease and attract donors, but to improve.

As Water Aid’s Vincent Casey put it: “It’s about NGOs being transparent, and learning from one another what’s working and what’s not working.”

Technology will play a key role.

At charity: water, there’s excitement over a $5 million project, launched at the end of 2012 and funded by Google, that has developed remote sensor technology that will monitor whether water is flowing at any of its projects, at any time, anywhere in the world.

“Really the quantum leap is going to come with sensors,” Gorder told me. “We’re just a couple of months away from deploying thousands of these. The level of accountability will be huge.”

To pay for repairs, when needed, charity: water has launched a new monthly subscription program called Pipeline— although in an ideal world, those costs would either be built into the up-front cost of the water project or, better, paid for by fees collected from users. Gorder says that sustainability and monitoring are built into the project costs but “we commit to our donors that we’ll prove to them where every dollar was spent, so we want to put an end-date on when we spend their money, so we can report back to them, Typically, this is a 21-month process.”

Donors want feel-good stories. There’s not much emotion in seeing an inspector with a clipboard checking out a five-year-old project….even if that would be the wisest use of donor funds.

So is the glass half-full? Or half-empty?

As often happens when I explore new arenas, I’ve emerged from my shallow dive into the water sector with more questions than answers. This time around, that’s partly because the water charities have a ways to go when it comes to transparency.

There’s no doubt that they could do better. A small, Seattle-based water NGO called Splash that values monitoring and evaluation maintains a website called Proving It that is model of transparency and accountability.

The Global Water Challenge, meantime, is developing common metrics, through an initiative called the Water Point Data Exchange that will be launched next month. Brian Banks, who’s part of the effort, tells me: “In a sector where sustainability wasn’t even a mainstream consideration a decade ago, we’ve seen inspired progress.”

Still, there’s lots of work to be done. Institutional donors that support the water NGOs could invest a percentage of their grant money into initiatives to evaluate and improve the entire sector. We could use the water equivalent of Animal Charities Evaluator.

At the very least, each water charity could set clear goals and timetables. (“Everyone deserves the right to clean, safe, publicly-accessible water” is not a time-based goal.).They could better explain what they do. (They work on sanitation, but you don’t often see pictures of toilets on their websites, for obvious reasons.) They could report on their mistakes, and how they learn from them. (It’s possible.)

Other questions on my mind: How can governments be shamed/encouraged to deliver clean safe water? What role can the private sector play? Why do more poor people have cell phones than water? And, when I do another post about water nonprofits, what should my focus be?

The post Water taps and information gaps appeared first on Corporate Knights.

This program, recently introduced at the school, draws kids from a wider catchment and typically higher-income families. There’s a perception in the school community that French immersion parents with their busy lives and expensive cars make particularly belligerent drivers. Of course, a Lexus SUV with tinted windows is a fearsome sight if you’re four years old and just had your training wheels taken off. Even so, I didn’t think there was any substance to the claim that rich people drive badly.

In fact, that’s precisely what social psychologist Paul Piff argues. In a 2012 study published in the Proceedings of the National Academy of Sciences, Piff, a professor at the University of California, Berkeley, observed several hundred cars passing through a four-way stop and a crosswalk where a pedestrian was waiting. He categorized car-types from one to five, with one being beat-up Hondas and the like and five being luxury models. Put simply, the best cars behaved the worst. At the crosswalk, all the cars from the first category stopped for the pedestrian, versus only half of cars in the fifth category.

Piff is one of a growing number of scientists studying the impact of wealth on social behaviour. The interest comes as income inequality in North America continues to rise with the rich lining their pockets muct faster than any other income group and the most dramatic gains being made by the super-rich. Between 1998 and 2007, the richest percentile of the Canadian population netted a third of all income growth.

Psychologists, economists and neurologists are honing in on what kinds of behaviour contribute to wealth and, in turn, what impact wealth has on behaviour. It’s hard to distinguish chickens from eggs in this field and it’s impossible to “get the 1 per cent into the lab,” as Piff puts it, but he and his colleagues at Greater Good Science Center at Berkeley are designing lab situations and studying real-world phenomena to better understand what wealth does to people.

In a much publicized experiment, Berkeley psychologist Jennifer Stellar put subjects from various socio-economic backgrounds before two videos – one demonstrating how to build a cement wall, the other showing a medical facility where children with cancer are courageously undergoing medical tests. While all viewers reported to have been moved by the second video, those of higher socio-economic status demonstrated significantly less physiological response (empathy typically triggers heartbeat deceleration).

It’s quite contentious to suggest that rich people are unfeeling and Stellar and her colleagues are quick to clarify that richer subjects are not indifferent, just less acutely affected. Neuroscience offers a value-neutral explanation for this: Growing up in poverty or adversity means constantly coping with a certain degree of threat, a state that makes people connect with others. This connection creates heightened awareness of the social environment. Psychologists have found, for instance, that people of lower social-economic status are better readers of subtle facial expressions.

At the same time, wealth affords separation. Rich people live in bigger houses, drive larger cars, take taxis rather than subways, fly in roomy business class seats and cabins, and holiday in exclusive, remote resorts. If they want to get away from the maddening crowds, they certainly can. Some never get near them.

Consumer culture reinforces this exceptionality. Take car ads. As often as not, a pick-up truck ad will show a bunch of them in a parking lot for a country fair with a slogan about family time or belonging. But what high-end sports car markets itself on how well it fits into the flock? The sports car is a means to escape humanity (with the possible exception of a sexy mate) on a ribbon of road cutting through a remote bluff.

There’s nothing inherently bad about such individualism – and in fact, there’s a lot good. Without self-interest, it’s impossible to obtain wealth which undeniably affords better health, greater opportunity and longer lifespan. But the “hidden cost” of wealth, according to Piff and his colleagues, is a social disassociation that can result in ungenerous, selfish and “socially costly” behaviour.

Rich individuals will, of course, take exception to such claims. In a radio interview with Canadian news network CBC, prominent millionaire and television personality Kevin O’Leary dismissed Piff’s work as a “total load of crap.” He claimed that “most wealthy people want to give back,” then went on to cite his own charitable activity as evidence.

Piff rebuts that in the United States, poorer households contribute more to charity than wealthy ones as a percentage of income. And much philanthropy the world over is motivated by the “reputation gain” associated with it. The Greater Good scientists are less interested in grand charitable gestures than small quotidian ones and day-to-day civic behaviour. Among the worst offenders in Piff’s crosswalk study were Toyota Prius drivers who are evidently willing to pay a premium for an environmentally virtuous car – and the status that comes with it – but less willing to apply its brakes for the common man.

It’s impossible to know what proportion of this behaviour can be attributed to dulled empathy and how much to simple pragmatism, given that wealthy people have good lawyers and barely notice the dent a traffic fine puts in their pocket. Perhaps a more relevant question is whether the sense of freedom from social mores brings pleasure.

In the burgeoning field of happiness studies, much has been made of the finding that increased wealth doesn’t invariably increase “subjective well being,” as it’s called. A 2010 study by economist Angus Deaton and Nobel prize-winning psychologist Daniel Kahneman determined $75,000 to be the optimal annual income. Up until that level, increased wealth leads to increased happiness. Beyond it, however, happiness levels plateau and even possibly fall off. One explanation for this has been put foreword by University of British Columbia psychologist Elizabeth Dunn, who posits the centrality of savouring to happiness. That is, to savour something means it has to be in limited supply. As Dunn and her co-author Michael Norton, a business professor at Harvard University, put it in the forward to their recent book, Happy Money, an astonishing number of people don’t get maximum happiness bang for their buck.

“When people receive money, they have a strong tendency to spend it on stuff for themselves,” Norton explains. “This strategy is wrong at two levels. First, stuff doesn’t make us happy and second, buying for ourselves doesn’t make us happy.”

In their book, Norton and Dunn detail the kinds of investments that actually yield happiness: shortening work commutes, going on trips, giving to charity, spending more time with friends and family and less with television. The common denominator: experiences that bring you together with others. According to happiness researchers, the strongest predictor of human happiness across class and geographic boundaries is solid social relationships.

I once knew a very wealthy retired World Bank banker who lived in a sprawling penthouse in Geneva. Apart from the odd voluntary consulting gig, his life was one of leisure – trips to Milan for an opera, Paris for dinner or Morocco for a week at the beach. Much of his time was spent alone. We lost touch for a while but he recently re-surfaced on Facebook. Apparently, he’s sold his Swiss real estate, given away gobs of money and moved to South America where, judging by the pictures, he’s living closer to the ground, closer to people and happily.

Of course, I have no way of knowing how he behaves at crosswalks.

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