In urban slang, a “shout out” is a thank you, a word of appreciation. In the emoji world, two thumbs up is the sign that everything is especially good. Rebekah, here’s two thumbs up for you.
Thank you, Rebekah, for laboring for God’s kingdom, and seeking to make the world a better place via your work with non-profits at Basinger Consulting. Thank you for calling all of us back to the virtue of generosity through your writing at Generous Matters. As almost always in higher education, we don’t always agree with everything our colleagues think, write or say. However, good colleagues not only encourage and inspire one another, but often challenge one another. “As iron sharpens iron, so one person sharpens another.” (Proverbs 27:17 JKV). Recently Rebekah encouraged, inspired and challenged my thinking with one of her posts Surviving, thriving, and six degrees of separation.
The title was intriguing. I can’t count the times I have used the juxtaposition of “surviving” and “thriving” to emphasize the extremes that individuals and organizations can and do experience. The stick figure illustration of the extremes in her post caught my attention and gave me pause to think. It reminded me of the Choice Hotel ad jingle that seems to be played during every athletic event on television: “Should I stay, or should I go?” Reflecting on my 40 years of administrative experience at Christian colleges, I remembered many times when I and the institution stood on the precipice of a large chasm, gazing into a deep and dangerous abyss. Standing pat would be a sure failure, but taking the one path to a possible favorable outcome was fraught with many dangers. One stumble on the treacherous path would lead to a worse fate than not moving. What option should I suggest? Do I choose the sure loss or risk everything with a desperate attempt to grab the golden ring? Does the institution take my suggestion, or does it select the other option? This is the time when it would be helpful to have additional insight, or even better, prescience of which path was the best choice. I wish I could say, we always selected the best path.
Rebekah, you proffered an enthralling problem. It’s not a true dilemma ( two choices each with its own outcome) or a trilemma (three choices, each with its own outcome). Although there are really only two choices: “Should I stay or should I go?” there are three possible outcomes (small loss, big loss, big gain). Since I am a mathematician, I began to think of this problem in mathematical terms. To solve a mathematical problem, you must first identify the variables.
What are the variables? The first variable I identified, I remembered from my high school statistics classes. What is the expected value of the outcome of the event? Suppose we can quantify or estimate the occurrence probabilities of the three outcomes, we then multiply those probabilities by the value earned or lost on the associated event. Adding up those values, we get the expect value of the trial.
The second variable, I identified from two books that I am currently reading and my administrative work with insurance companies. This variable we can label Risk Aversion. It is a measure of how comfortable, an individual or organization is with taking risks. In this age of bungee jumping and X-games, are we as a culture more prone to seek out the thrill of a big risk? Are we thrill junkies, seeking that adrenaline rush? As I thought about quantifying Risk Aversion, I came up with two approaches. The first was one that I had seen previously. It was developed by mathematicians for the investment industry. It is known as the Risk Aversion Coefficient (RAC). In the investment world, empirically it has been a number between 1 and 4, with a mean of 2. It measures the comfortableness of an individual selecting a particular approach knowing the maximum positive and negative outcomes associated with such an approach. It is used all the time by investment advisers in putting together their portfolio suggestions for their clients. The mathematics are quite complicated and beyond the scope of this post.
I am going to call the second approach to quantifying Risk Aversion the Risk Aversion Quotient (RAQ). Intuitively, I found this approach quite appealing. However, when I started researching the idea, I found no reference to such a variable. The way I am envisioning the RAQ is that is represents a point on a continuum, between the two extremes of fleeing, which is a very risk adverse decision, or jumping into the fray whole heartedly. The center of the continuum could represent the action of freezing. This action of making no decision is a second type of risk adverse reaction. The closest physiological response I can find is the “fight or flight response,” which is a biochemical reaction in both humans and animals that enables them to rapidly produce sufficient energy to engage a foe in a threatening situation or to flee the scene completely. Right now, I am resisting my flight urge to drop this task on the spot. I am giving in to my fight hormones and surging onward trying to fight this imposing giant of a problem. This bout will take more than one round. Additional posts on this battle are coming.
In spite of the problem and trials we face, we should take comfort in knowing God’s desire for us: “For I know the thoughts that I think toward you, saith the Lord, thoughts of peace, and not of evil, to give you an expected end.” (Jermiah 29:11, KJV) and “And we know that all things work together for good to them that love God, to them who are the called according to his purpose.” (Romans 8:28, KJV).
I have already admitted to being a mathematician. However, to set the record straight, I am not a numerologist. I do not believe that numbers control our lives. God is in control of the universe which includes us. However, at times the occurrence of specific numbers at specific times does appear to be more than coincidence. Rebekah, the second part of your title, “six degrees of separation,” exemplifies one of those moments. Your post connected two different sets of six dots with which I have been struggling. To my readers I will have more to say about connecting the dots in other posts. In the meantime, keep checking the blog Generous Matters. You will always find good stuff there that will encourage, inspire and challenge you.
Thank you, By, for the shout out and for adding to the discussion of thriving, surviving, and the gulf between. While I appreciate your thoughts about risk and risk aversion, the simple truth of the matter is that many nonprofits — including some colleges, universities, and most theological schools — don’t have sufficient margin to risk taking risks. It’s not that the leadership is risk adverse, it’s simply that there’s no room for failure. So they hunker down, hold on, and hope to make through today’s storm. Not a pretty picture, I know, but one I see often in my work.