Cost of Water

Note 1 – I wrote an initial version of this essay as a volunteer researcher for Agora for Good, an excellent start up that aims to make your personal philanthropy easier and better directed. I am neither an employee of nor an investor in Agora.

Note 2 – I am grateful to Water for People for reviewing this post, I made minor changes from the original version to correct factual mistakes about the organization. I am not affiliated with WFP in any way, all research is based on public information.

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Not a drop to drink

How much does it cost to provide me with drinkable water? I could purchase my water in the form of Voss mineral water, my daily drinking needs would be met by three 1-liter bottles, $3.99 each.  I drink New York tap water instead, at $0.0045 a gallon I feel like I’m getting a great deal. Once in my life, I spent a few months living in a tent and having to walk a couple minutes to fill an old canteen with water that was somewhat dusty, but it didn’t suck too much.

Unfortunately, 663 million people  worldwide don’t have access to a water source and 1.8 billion use a drinking-water source contaminated with feces. 2.4 billion people don’t have access to an “improved sanitation facility”. In plain English, they shit in a plastic bag and throw it out the window. That sucks too much.

How much would it cost to provide these people with access to clean water? Probably less than you’d think.

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Water For People – measuring the impact

Water For People is an internation nonprofit with the mission to provide clean water and sanitation to people that don’t have it. It operates by funding hardware (pumps, reservoirs, taps) and creating the economical infrastructure to support it: local businesses that can collect tariffs for water usage and use the revenues to maintain a consistent source of clean, safe water. Water For People tracks their progress towards the goal of “Everyone, Forever” – ensuring that every single person in the districts where WFP operates has access to water and sanitation, and that the access is sustainable for the future.

Progress towards “Everyone, Forever” is tracked on Water For People’s  excellent reporting platform: EF Tracker. EF Tracker combines survey data with automatically collected electronic information from monitored water points.The data accounts for every dollar spent by WFP and (almost) every person in the target regions.

EF Tracker combines the various measurements into two metrics: ubiquity of water service (Everyone) and its sustainability (Forever). Here’s a chart of the progress on water ubiquity (Everyone) in Cascas, a mountainous region in the northwest of Peru:

The “Everyone” score combines several measurements. For example, 77% of the people in Cascas have access to a water point but these water points have had several down days almost every month, only 44% of them have provided a high enough quantity of water every day of the year.

“Forever” measures the economic sustainability each water point: whether someone charges for use, repairs and maintains it or whether it is only likely to function until the next part wears down and breaks.

Slightly simplified, Everyone (E score) is the percentage of people in the district that have access to good water at a given time. Forever (F score) is the likelihood that access to water will be available for the next 10 years without additional external aid. For sanitation, Water For People calculates a unified EF score. Combining the scores allows us to measure how many people will have access to water and sanitation for each year in the next decade by counting Sanitation-Water-Person-Year, or SWPY (pronounced swoopie).  A score of 100% on Everyone and Forever means that every single person in the district will have reliable access to clean water and sanitation for the next decade, earning 20 SWPYs.

SWPY = (District population) x ((Water E score x F score) + (Sanitation EF score)) x (10 years) = People with a year’s access to water or sanitation.

In 2011, only 14% of Cascas’ 14,191 inhabitants had access to water, and that access was only 14% likely to be sustainable for 10 years. That’s a combined Everyone Forever score of just 14% * 14% = 1.96% for water. The EF score for sanitation is reported at 16%. The combined SWPY score was:

Cascas SWPY₂₀₁₁ = 14,191 people * (14%*14% + 16%) * 10 years = 25,487 SWPY.

By 2015, the situation was much improved by the addition of new water points, training of maintenance committees and scaling the use of micro meters. The E and F scores for water improved to 40% and 58%, the sanitation EF score improved to 53%:

Cascas SWPY₂₀₁₅ = 14,191 people * (40%*58% + 53%) * 10 years = 108,135 SWPY.

The fourfold improvement in the SWPY score reflects a fourfold improvement for the people in Cascas, every resident is roughly four times likelier to have access to water and sanitation at any point in the next decade. Still, there’s a long way to go: a complete and sustainable coverage of Cascas will achieve a score of 283,820 SWPY, we’re just over a third of the way there.

The huge jump in water access in Cascas did not happen by itself, but involved investments by Water For People, the local government and the community:

We can calculate the effectiveness of investment in water and sanitation by dividing the total SWPYs gained by the total dollars invested:

Effectiveness_WFP = (108,135 – 25,487)  / $1,785,158 = .046 SWPY/$, or just over $20 to provide a person with a year’s water access!

In fact, the sparse population of Peru reduces the measured effectiveness of water charity since each fixed resource helps fewer people. For a sense of the scale let’s compare the effectiveness of providing each Peruvian with 6 bottles of mineral water per day for drinking and washing:

Effectiveness_bottle = 1 / (365 days/year * 6 bottles/day * $3.99 $/bottle) = 0.00011 SWPY/$, it costs $8,738 to provide someone with a year’s worth of mineral water.

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 Adjustments and total impact

The .046 SWPY/$ number we calculated is a first estimate. To figure out the direct impact of donating, we should adjust this estimate to account for the following facts:

1. Access has been improving worldwide without the intervention of charities. Based on the UN’s Millenium Development Goals for water and sanitation, access to water and sanitation has improved by 19% (see chart below) in developing countries over the last 25 years for a rate of 0.76% a year. To be conservative, I assumed that in the absence of aid from WFP or any external sources water access would improve at double that rate: 1.5% annually.

   

2. Not every dollar of donation goes to the consumers. Water For People spends 77.5% of expenses on direct program activities, the rest covers salaries, reporting, administration and fundraising.I divided the investment numbers by that percentage to calculate return per dollar donated.

Here are the results for the 26 districts Water For People has been operating in, based on improvement and investment data from 2011-2015. I calculated the amount of sanitation and water person-years that can be gifted by a modest donation of $100:

Country	District	Effectiveness (SWPY / $100)
Global average		22.9 ($4.37/SWPY)
Malawi	Blantyre	80.8
Malawi	Chikhwawa	5.8
Rwanda	Kicukiro	127.2
Rwanda	Rulindo	19.1
Uganda	Kamwenge	64.0
India	Sheohar	2.6
India	Patharpratima	148.1
India	Sagar Island	178.6
Honduras	Chinda	-0.9
Honduras	El Negrito	-20.9
Honduras	San Antonio	0.4
Guatemala	San Andres Sajcabaja	40.6
Guatemala	San Antonio Ilotenango	28.4
Guatemala	San Bartolome	7.8
Guatemala	Santa Cruz del Quiche	15.3
Nicaragua	La Concordia	7.0
Nicaragua	San Rafael del Norte	10.1
Peru	Cascas	4.6
Peru	Asuncion	5.6
Bolivia	Arani	7.1
Bolivia	Cuchumela	1.0
Bolivia	Cochabamba	23.0
Bolivia	San Benito	17.0
Bolivia	San Pedro	11.5
Bolivia	Tiraque	5.4
Bolivia	Vila Rivero	10.1

The large variance in those numbers reflects varying conditions in each district. African towns are more densely populated and have a starting point of very low water availability, this amplifies the impact of water programs in Africa. The two districts in Honduras with negative numbers have received relatively small investments by WFP (6% of total) and reflect decreasing measures of access due to natural deterioration in water infrastructure (that Water For People is working to stem) and slight changes in measurement methodology (including more people in the “Everyone” measure).  Since 2013, WFP has investment the majority of its money in Africa and India where it achieves much higher efficiency.

Caveats aside, our estimate is that a donation of $100 will help almost 23 people drink clean water / poop in dignity for a whole year. Helping a single person costs $4.37, barely more than a single bottle of Voss!

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How the measurement measures up

This is the point where I apologize for using two digits of precision on numbers that may only be correct within a couple orders of magnitude.

Here are some reasons the numbers could be too optimistic:

• The numbers are self-reported by Water For People and could be an overly optimistic measure of the ability to actually provide water access for 10 years (the Forever score).
• The scores are only measured for the available water points, the Everyone score may not include the entire district population.
• Future donations may not be used as effectively as the low hanging fruit is already captured.

There are also some ways in which the numbers could be understating the impact:

• Future donations may be used more effectively as Water For People scales up and learns from experience, in fact the effectiveness of WFP for 2013-2015 is much higher than that for 2011-2013.
• The experience gained by water charities over many years can show local governments how to improve and maintain water access without external aid.

Are there any “real life” measures to compare the $4.37/SWPY number to? The US spent $109 billion total on water utilities, including water supply and wastewater treatment. Since every person in the US accounts for 2 SWPY (water + sanitation) annually, that amounts to $171/SWPY in the US. That number includes total public spending on water, rather than WFP’s activity which is “hooking up” underserved communities to an existing national water infrastructure maintained by the government and paid for by taxes (which are included in the $171 number). The US also has much higher labor costs and a higher standard for drinking water than in other countries. Comparing American total investment numbers to African access-creation numbers is like comparing apples to kiwano horned cucumbers, but $171/SWPY can be seen as an upper limit on measured effectiveness.

Edit: Water For People estimates that an external investment of $125 million will be enough to complete “Everyone Forever” to the 4 million people in the districts they are operating in. Bringing 4 million people from the current ~50% access (40 million SWPY) to 100% access for both water and sanitation (80 million SWPY) achieves an effectiveness of $125 million / 40 million SWPY = $3.13/SWPY, an even more optimistic number than my projection.

On the balance, I wager that $4.37/SWPY is more likely to be over-optimistic, by Holden’s Law of pessimistic uncertainty and Murphy’s Law of everything being worse than you’d think. How much of a difference does it make if the estimate is off?

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Bad numbers drive good decisions

There are two schools of thought regarding the use of approximate numbers. The first asserts “garbage in – garbage out” and refuses to deal with less than perfect data. Following this approach leaves one no reason to believe that buying people in Malawi bottles of Voss is any less efficient than what Water For People does. You already know that’s not how Putanumonit rolls.

Even if the numbers aren’t exact, they can be used to assess if Water For People is getting better or worse at its mission as time goes on and more importantly, to compare it to other charities that operate in the same field. Finally, the numbers can even be used to compare charities across different sectors. According to GiveWell, the disparity in charity effectiveness can easily reach a factor of 1,000 or more. Against this background, calculating impact to within an order of magnitude can still differentiate effective charities from the futile ones.

Calculating a result of $4.37/SWPY tells me that it’s very possible that the actual cost of providing water access to people in the third world is $20/SWPY, but it’s quite unlikely to be $1,000/SWPY. What should we do if I overestimated the impact by a factor of 4, and it actually costs $18 to help a person for a year?

Americans spend $11.8 Billion a year on bottled water alone. If we drank tap water instead and donated the difference to water charities, an efficiency of $18/WPY would be enough to provide water for every single person of the 663,000,000 people that lack it.

$18/SWPY isn’t guaranteed, but it is not unreasonably optimistic.

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Math doesn’t give moral answers, but it frames the correct question

Is providing clean water to someone in Rwanda or India for a year worth $4 of your money? $18? $100? Should you click here or here and donate to effective charities right now?

My answer is “Yes, of course!”, but my values are my own and I can’t prove them to you. If the idea of joining some wonderful people to maximize the quantifiable positive impact you have on humanity sounds appealing, this is a good place to start.

One of the dumb objections to effective altruism is “But how can we know what’s effective? There’s no information!” There is, and looking for it encourages organizations like Water For People to perform robust measurement and reporting which helps philanthropy do better everywhere. A simple spreadsheet can unveil answers that even the NGOs themselves did not recognize. Like a cup of clean water, the answers can be found with a little bit of help.

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Next post is up, and there’s little charity in it.