Think of the last charitable donation that you made.
Now we’ve got a question for you: Can you say, with certainty, whether that charity’s work will be effective in truly helping the cause it’s meant to further?
That’s the point being raised by a recent trend known as effective giving, which is reshaping how people think about charity.
According to proponents of effective giving, we don’t approach charitable giving the way we would other purchases–and we should.
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Case in point: When you buy a new winter coat, you likely try to get the best bang for your buck in terms of quality, style and fit. But we don’t look for the most good for our dollar when it comes to charitable donations. Instead, we tend to give to organizations that have brand recognition or simply because they request money from us … all without asking whether our donation will accomplish its goals.
Some people at least look up the organization’s profile on Charity Navigator to see how much it spends on overhead costs versus program expenses to make sure that the charity isn’t a fraud–but neither of these things say anything about the effectiveness of its work.
We’ll dive into what the effective giving movement is about, how it differs from typical charity approaches and how you can use its principles to guide your own giving.
The Thinking Behind Effective Giving
Three years ago, Toby Ord, a researcher in moral philosophy at Oxford University, wanted to find out how much charitable projects differed in terms of their impact in an area such as health. This was a question that the Gates Foundation, started by Bill and Melinda Gates, had posed in the Disease Control Priorities Project.
Ord expected that the health improvements of different projects might vary by 10% or 20%, but he found instead that some projects had an impact 10 times bigger (a 1,000% difference) or 100 times bigger (a 10,000% difference).
For instance, it takes $42,000 to train a guide dog to help a blind person, according to Guide Dogs of America. But to really help the blind, you could put that $42,000 toward funding eye surgeries for people in Africa suffering from a bacterial eye infection called trachoma. Since surgery costs as little as $25 and is 80% effective, you could theoretically restore the sight of 1,344 people with that $42,000.
As The New York Times puts it in an article on effective giving: “If you value all lives equally—and in a minute I’ll get to the fact that we certainly don’t—then if you are training a guide dog, you might as well be giving to a charity that wastes 99.93 percent of its money. (Actually even more, as a guide dog does not restore sight.)”
Organizations Excelling at Effective Giving
Ord decided that the best way to give is to donate to the charities that were most effective. So he pledged to give 10% of his income to the most effective project at the time (deworming school children), and found that many friends and colleagues wanted to join him.
That’s how he came to found Giving What We Can, an organization dedicated to eliminating poverty in the developing world. So far, it’s gotten 264 people to pledge at least 10% of their income every year to charity–which amounts to $100.8 million in future earnings toward the most effective projects.