Do you give to charity? if so, how do you decide to which charity to contribute to? The last one is not an easy question, there are over 1.2 million charities in the world, all offering to improve some aspect of our societies in one way or another. So how do you make the optimal selection? In the current system, most people end up giving their money to charities that they are familiar with. This is a problem because, in the increasingly competitive market of non-profit organizations, the ones thrive and get the most donations are in many cases, not the ones that are better at making our world a better place, but instead the ones that are better at getting people to make a donation by means of compelling advertisement. This is where effective altruism comes in handy. It is a movement that intends to optimize the ways we give money so that our good can reach better outlets and have the greatest possible impact.
One of the main aspects of Effective Altruism is that it encourages benefactors to treat their donations as investments. This means that instead of making a contribution to a cause that you have an emotional connection to, you should give to the one offers the greatest expected value. For example, some popular charities in the United States include the Make a Wish foundation or Guide Dogs of America which have a unitary cost of about $10,000 and $40,000 respectively. On the other hand, there are charities such as Against Malaria offering to save a child’s life for $4000 as well as preventable measures for as little as $4. Looking at it in this way, it becomes obvious which options maximize our return on investment. You’re able to help more people and do more good by donating to the ones that offer the lowest costs.
However, the implementation of this approach is not as simple as the logic behind it. If you have ever taken at least one lesson in economics then by now you must be aware of the fact that we are not rational beings, this idea comes in handy when we try to explain our charitable patterns. Opposite to our previous concept, people think about charities in very subjective terms, they believe that their personal feelings and preferences should guide their donations. In 1968 the American economist Thomas Schelling wrote about the inconsistencies in the valuation of human life. He noted that an individual life described in detail provokes more sympathy than their equally needy, statistically pooled counterparts. As a result, they encourage more donations given that when donating to a specific cause, the benefactor usually feels that they are having a clear impact on the problem. This puts the most cost-effective charities in a position of disadvantage, because they are more likely to provide aid to a statistically pooled group of people. And, given our ability to empathize in most cases is positively related to the situational relevance, we are more likely to donate towards causes in our vicinity, even though providing aid to the developing world is often much cheaper.
But, let us assume we can somehow manage to convince people to ignore their emotions at the time of making a donation. Consequently, they might lose all the motivation they had to give money to charities at all. Not everyone is able to be truly altruistic and perform a costly behavior solely in order to help other people, people do look for emotional satisfaction at the time of making a donation, which is increased by supporting causes that we actually believe in.
Fortunately, making sure your contributions count is becoming increasingly easy. Most nonprofits are required to disclose their finance and governance information, and on the last years, we have witnessed an increase in third-party evaluation platforms that rate the effectiveness and legitimacy of these organizations. They advise benefactors, to look for charities that have a clear mission statement and that spend at least 75% of their expenses directly on their programs. Some of them are GiveWell.org and CharityNavigator.org.
Although this movement is rapidly gaining popularity, it is doing so within specific groups of people such as economists, financiers, and philosophers. In other words, people that are used to thinking in terms of maximizing utilities and such. It may not be realistic to ask people to leave their emotions aside when making a donation. after all, they do come from our compassion and capacity to feel the distress of others. However, within the cause that you feel the strongest connection to, it is crucial to spend some time looking for the ones that have the greatest impact instead of the best ads.