Nacional Monte de Piedad Uses a Novel Social-Value Measure for Allocating Grants Among Charities

Allocating grants among charities presents several difficulties. Evaluating trade‐offs is emotionally difficult and time consuming for trustees; charities that do not receive support complain of favoritism; and sufficient resources are not available to help all charities. This paper presents a unique and flexible metric that maps money granted to units of social value, which we use in a mixed‐integer programming model to assist Nacional Monte de Piedad in its annual grant‐allocation process. The model captures complex interactions in a simple, understandable, and representative way.