Glossary

Here's a collection of acronyms, abbreviations, and special jargon that comes up when you start looking at international cost-benefit philanthropy.

ANB

Annualized Net Benefits

BCR

Benefit-Cost Ratio — Once a CBA is done, the resulting BCR is calculated as the total benefits divided by the total costs. The BCR will be a unitless number, like "0.26", or "4.25". The bigger the BCR, the more cost-effective the project is. If the BCR is greater than 1.0, then the benefits outweigh the costs, and the project is cost-effective. If the BCR is less than one, then the costs outweigh the benefits, and the project is not cost-effective.

CBA

Cost-Benefit Analysis — An analysis that weighs costs against benefits, usually with both costs and benefits quantified in the same measurement units, such as dollars. In contrast, see CEA.

CEA

Cost-Effectiveness Analysis — An analysis that looks at results per unit cost, where the costs and the results are not typically not quantified in the same measurement units. For example, cost might be in "US dollars", with results in "number of lives saved". In contrast, see CBA.

DAF

Donor Advised Fund — A donor advised fund is an investment fund run by a community foundation or other public charity. The donor deposits money in the fund by making donations to the organization that runs the fund. The donor can't ever withdraw the funds, but the donor can recommend that specific grants be made to eligible charitable recipients. The organization that runs the fund is free to accept or reject the recommendations, although in practice these organizations accept the vast majority of recommendations made.

DALY

Disability-Adjusted Life Year — A DALY is a unit of measurement that's widely-used when trying to measure health outcomes. DALYs are measured by taking into account the years of life gained and the years that are lived with some disability, with a weighting for the severity of the disability. For example, if a 35-year-old smoker quits smoking, they might gain 8 DALYs. If a new national tax on cigarettes in some country might save 12,000,000 DALYs. See also, YLL.

DCR

Discount Rate

efficacy

The efficacy of an intervention is the benefit obtained under ideal circumstances, like in a controlled study. In contrast, see effectiveness.

effectiveness

The effectiveness of an intervention is the benefit obtained in typical real-world circumstances. In contrast, see efficacy.

FAQ

Frequently Asked Question

GDP

Gross Domestic Product

GNI

Gross National Income

GWP

Gross World Product

Int$

International Dollars — A unit of monetary value, similar to US$, but which takes into account PPP as well as the exchange rate between a local currency and US$.

MDG

The United Nations Millennium Development Goals

morbidity

Morbidity usually means the relative incidence of illness in a population — for example, the number of people who have AIDS per 1,000 people in the population. See also mortality.

mortality

Mortality usually means the relative incidence of death in a population — for example, the number of people who die of AIDS per 1,000 people in the population. See also morbidity.

PPP

Purchasing Power Parity

SRTP

Social Rate of Time Preference

TB

Tuberculosis

UN

United Nations

US$

United States Dollars — A unit of monetary value. See also Int$.

VSL

Value of a Statistical Life — A crude estimate of the value to society of saving a life. VSL estimates are sometimes based on estimates of average wages and earnings, to assess society's loss of a productive worker. Or VSL numbers can be based on trying to empirically observe how much people actually seem to be willing to pay to avoid risks, either as individuals or as a society. For example, a civil engineer might use a VSL number when making a CBA estimate to decide whether to install a guard rail on the side of a highway. Studies often use different VSL numbers for people in different countries, but I would argue that ethically we should consider all people to have similar VSL numbers, without regard to race, sex, or nationality.

YLL

Year of Life Lost — YLLs are a unit of measurement for comparing at health outcomes. YLLs are similar to DALYs, although they don't account for disability caused by disease.

501(c)(3)

501(c)(3) non-profit — A non-profit organization that is incorporated in the United States and qualifies as a tax-exempt organization under the United States Internal Revenue Code section 501(c)(3).