Enhancing the Impact of Lemonade's Giveback Program: An Open Letter

I'm writing this post with a dual purpose:

1. To propose that Lemonade include more high-impact charities in their Giveback program selection.
2. To seek insights and suggestions from the EA community to refine this proposal and maximize its potential impact.

What Is Lemonade Giveback?

Lemonade is a technology-driven insurance company offering renters, homeowners, car, and pet insurance. A unique feature of their business model is the Giveback program.

• When purchasing a policy, customers select a cause they care about from a list of non-profit organizations. Lemonade groups customers who choose the same cause into "cohorts."
• Lemonade takes a flat fee from premiums to cover expenses and profits. The remaining funds are used to pay claims for that cohort. At the end of the year, any unclaimed money is donated to the chosen charity.
• There's a game theory motivation: By introducing a charity as a "third player," this setup reduces the conflict of interest between insurer and insured, encouraging honest claims and fostering trust.

Since its inception, the Giveback program has donated millions to various charities—about two million dollars this year alone. I expect this amount to grow as the company's business expands.

Open Letter to Lemonade

Dear Lemonade Team,

First and foremost, I want to express my appreciation for the Giveback program. As both an investor and someone who values helping others, I find this initiative inspiring.

Recognizing the Variance in Charitable Effectiveness

In business or investing, we seek the best risk/reward opportunities, fully aware that some companies outperform others significantly. Similarly, in charitable giving, some organizations achieve far greater impact per dollar than others.

For example, consider the difference between:

• Providing a guide dog to a blind person in the U.S.: This costs around $30,000 to $50,000 and significantly improves the quality of life for one individual.
• Performing surgeries to prevent blindness due to cataracts in low-income countries: At a conservative $1000 per surgery, the same $30,000 to $50,000 can restore sight for 30 to 50 people.

This striking disparity illustrates how the same amount of money can have vastly different outcomes depending on how it's allocated. (Source: Giving What We Can)

For more details and another example, see also this video (by Giving What We Can).

Opportunities for Greater Impact

I believe there's an opportunity to enhance the Giveback program without compromising customer experience or alienating those who may not focus on quantitative impact analysis. My proposal is:

• Add one or two highly effective charities to each existing category in the Giveback selection (or at least to most categories). Some concrete suggestions are listed below.
• Utilize recommendations from organizations like GiveWell, Animal Charity Evaluators, and Giving What We Can, which specialize in assessing charity effectiveness.

Balancing Impact with Customer Preferences

I understand that cost-effectiveness isn't everyone's primary concern. However, I believe many Lemonade customers are educated, caring, and analytical—keen to maximize their positive impact. By adding high-impact options, you cater to this group without diminishing the experience for others.

Offering Assistance

I'm more than willing to assist in refining these suggestions and can collaborate with members of the Effective Altruism community to leverage existing research efficiently.

Closing Thoughts

What do you think about this proposal? How might we collaborate to enhance the Giveback program's impact? Please let me know if there's any way we can assist further.

Thank you for your time and consideration.

Suggestions for High-Impact Charities

Here are some examples of effective charities for each category. This is a preliminary selection, and I'm open to feedback.

Health

Suggestions in this category are all top charities recommended by GiveWell. 

• Helen Keller International
  Provides vitamin A supplementation to prevent blindness and reduce mortality in children under five. The last published estimate of average cost-effectiveness is $5,000 per life saved.
• New Incentives
  Offers cash transfers to incentivize caregivers to vaccinate their infants in Nigeria. The estimate of average cost-effectiveness is also $5,000 per life saved.
• Against Malaria Foundation
  Distributes insecticide-treated nets to prevent malaria. Highly effective in reducing child mortality. The estimate of average cost-effectiveness is $5,500 per life saved.

Global Poverty

• GiveDirectly
  Provides unconditional cash transfers to people living in extreme poverty, allowing them to address their most pressing needs. While GiveDirectly was previously a top recommendation by GiveWell, and is less effective than the options above, it remains a highly effective charity recognized for its direct and impactful approach to alleviating poverty.
• (Or any of the suggestions from the Health category would also fit here.)

Animal Rescue

• The Humane League
  Works on corporate campaigns to improve farm animal welfare, affecting millions of animals.

Climate Action

• Founders Pledge Climate Change Fund
  Supports high-impact climate interventions based on in-depth research.
• Clean Air Task Force
  Advocates for policies and technologies that reduce greenhouse gas emissions on a large scale.

Emergency Response

• I'm seeking suggestions for this category and welcome any recommendations.

Conclusions

This proposal presents a significant opportunity to amplify the positive impact of Lemonade's Giveback program—a win-win-win for customers, the company, and those in need. It offers customers options to maximize their impact, enhances the company's corporate social responsibility and appeal to impact-driven individuals, and redirects funds to areas where they can do the most good globally.

I believe many Lemonade customers care deeply about impact and are open to using quantitative methods to maximize it. By providing options for these customers, we can enhance the program without demotivating those who prefer a different approach.

Your Input Matters

I'm eager to hear your perspectives:

• EA Community: Do you have additional charity suggestions or strategies to improve this initiative?
• Lemonade Customers: Since I'm not a Lemonade customer myself, I'd appreciate insights into your experience with selecting a Giveback charity. Are these proposals applicable, or do you have other suggestions to improve the user experience of the Giveback program?
• Lemonade Team: Thank you for considering this proposal. Are there any other  ways we can support you in enhancing the Giveback program's impact?

Together, we can make a meaningful difference.