December is giving season. According to Charity Navigator, charities surveyed reported that 41 percent of their annual contributions from individuals arrives between Thanksgiving and New Year.
How do you decide where to give? People want to give where their money will be used effectively, of course. For many, that means researching on Charity Navigator or the Better Business Bureau’s Web site to see which charities are well run and take only a small percentage of donations for administration or fund-raising needs.
Overhead does matter. But it is dwarfed by a different question: Is this group’s work effective?
“When people think of giving, they look at the issue of whether a charity has a 10 or 20 percent administration cost, and that makes the difference for them,” said Toby Ord, a researcher in moral philosophy at Oxford University and founder of an organization based there called Giving What We Can. “But in reality some things they could be funding are hundreds or thousands of times more effective than other things. People never guess there could be such large discrepancies. Instead of a 20 percent difference, there can be a 1,000 percent difference.”
In an essay called “The Moral Imperative Towards Cost Effectiveness,” Ord poses the example of helping the blind. Surely everyone would agree that a charity that trains guide dogs for the blind is a worthy charity. According to Guide Dogs of America, the cost of training a dog is around $42,000. So if you had $42,000 to give, you could greatly improve the life of one blind person.
But what if instead, you spent that $42,000 on eye surgeries for people with trachoma in Africa? Helen Keller International, which works to prevent blindness, says trachoma surgery costs as little as $25 per person and is 80 percent effective. That same money, then, could restore the sight of 1,344 people. 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.)
Ord’s point is that if we care about what our money is doing, we should look for the most effective charities. (His group asks people to pledge to give 10 percent of income to the places where it will be most effective. He has decided he can live comfortably on $18,000 pounds (a little less than $30,000) per year and will give away everything he earns above that.)
What are the “most effective charities?” Ones that:
— Aim to solve the most serious problems (in the normal calculus, this means that providing bed nets to save children from malaria ranks above helping public radio stations or art museums).
— Use interventions that work.
— Employ cost-effective strategies (trachoma surgeries, rather than training guide dogs, to help the blind).
— Are competent and honest. The percentage of donations spent on overhead is one measure of these qualities.
— Can make good use of each additional dollar. This is the hardest point to assess, but it asks whether the group has the program on the ground to use your money well, and whether your donation will make something happen that otherwise wouldn’t.
Most individual donors lack the resources or training to determine which charities meet these requirements. So does Ord, for that matter, so he relies heavily on the research of a like-minded Brooklyn-based organization called GiveWell.
How do you decide where to give? People want to give where their money will be used effectively, of course. For many, that means researching on Charity Navigator or the Better Business Bureau’s Web site to see which charities are well run and take only a small percentage of donations for administration or fund-raising needs.
Overhead does matter. But it is dwarfed by a different question: Is this group’s work effective?
“When people think of giving, they look at the issue of whether a charity has a 10 or 20 percent administration cost, and that makes the difference for them,” said Toby Ord, a researcher in moral philosophy at Oxford University and founder of an organization based there called Giving What We Can. “But in reality some things they could be funding are hundreds or thousands of times more effective than other things. People never guess there could be such large discrepancies. Instead of a 20 percent difference, there can be a 1,000 percent difference.”
In an essay called “The Moral Imperative Towards Cost Effectiveness,” Ord poses the example of helping the blind. Surely everyone would agree that a charity that trains guide dogs for the blind is a worthy charity. According to Guide Dogs of America, the cost of training a dog is around $42,000. So if you had $42,000 to give, you could greatly improve the life of one blind person.
But what if instead, you spent that $42,000 on eye surgeries for people with trachoma in Africa? Helen Keller International, which works to prevent blindness, says trachoma surgery costs as little as $25 per person and is 80 percent effective. That same money, then, could restore the sight of 1,344 people. 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.)
Ord’s point is that if we care about what our money is doing, we should look for the most effective charities. (His group asks people to pledge to give 10 percent of income to the places where it will be most effective. He has decided he can live comfortably on $18,000 pounds (a little less than $30,000) per year and will give away everything he earns above that.)
What are the “most effective charities?” Ones that:
— Aim to solve the most serious problems (in the normal calculus, this means that providing bed nets to save children from malaria ranks above helping public radio stations or art museums).
— Use interventions that work.
— Employ cost-effective strategies (trachoma surgeries, rather than training guide dogs, to help the blind).
— Are competent and honest. The percentage of donations spent on overhead is one measure of these qualities.
— Can make good use of each additional dollar. This is the hardest point to assess, but it asks whether the group has the program on the ground to use your money well, and whether your donation will make something happen that otherwise wouldn’t.
Most individual donors lack the resources or training to determine which charities meet these requirements. So does Ord, for that matter, so he relies heavily on the research of a like-minded Brooklyn-based organization called GiveWell.
by Tina Rosenberg, NY Times | Read more: