Do you want to do some good for the world, but don’t know where to start?
Not all charities are created equal. For example, you can help improve the life of a blind person by training a guide dog for the cost of about $40,000. For the same amount, you can cure about 2000 people of blindness caused by trachoma in Africa. Both are good outcomes. One seems better.
To help navigate the tricky giving landscape, a movement of rational thinkers are on a mission to find ways of maximizing the positive impact you can have, regardless of whether you earn $30,000 a year, or $30 million. The movement is called Effective Altruism (EA) and is being guided by The Centre for Effective Altruism, based at Oxford University in the U.K. The Centre was founded on “the desire to make the world as good a place as it can be, the use of evidence and reason to find out how to do so, and the audacity to actually try” and includes philosophy professors, start-up founders and data analysts. They influence how millions of charity dollars are spent each year. At Bellroy, we use a lot of their advice to maximize the effect our own giving has.
We recently caught up with The Centre’s Chief Operations Officer, Tara MacAulay, for some insights on the EA movement, and how we can all have more impact with our giving.
What’s the main goal of EA and how do you go about achieving it?
The Effective Altruism movement has some pretty big goals. Mostly, it’s about figuring out how to do the most good and then actually doing it. It turns out that understanding how to do the most good is really hard. It requires a lot of research into what causes or problems there are in the world that we can actually solve, given the limited resources we have. We can’t give to every charity, or even every charity we care about, so we have to prioritize. Using evidence and reason to figure out which causes to put first appears to be the best way to do that. There are tools such as GiveWell.org where you can go to find out which are the most effective, proven charities in the world right now. It’s a really good starting point.
A lot of people give to get the ‘warm and fuzzies’ that come from doing something good. Have you found in your research that giving to an effective charity has any more or less impact on that resulting feeling?
There are studies showing that individuals feel more compelled to donate when a beneficiary is local, identifiable and relatable — that’s why many charities use compelling images of people or cute animals on their websites, and this is why initiatives such as sponsoring a child raise a lot of money. To get around this marketing spin and stay motivated to donate to the most effective charities, I stick up pictures from the charities I donate to in my office, because it helps me feel more connected to those I am trying to help. I also give a proportion of my donations to an effective charity that is particularly great for the warm fuzzy aspect. It’s the Against Malaria Foundation and is definitely something that I care about deeply. They send me lots of email updates and every time I hear from them it makes me feel really good. For anyone who is torn about giving to something they care about, I’d say give something to them, of course, but allocate most of your dollars to a highly effective charity as well. One of the things I find really helpful in being part of the EA community is that you’re among thousands of other people who give effectively and care about this deeply. This helps create that warm glow, because of the extra support you’re getting.
How might we decide what’s going to be more valuable between giving money versus donating time?
Volunteering is a really great way to contribute, but there are corporate volunteer programs that get a lot of skilled professionals — accountants and lawyers — to go out and paint a fence, or work in a soup kitchen. These professionals charge clients $100, $200, maybe even $500 per hour. So, if they just worked an extra couple of hours a week, and gave the value of those hours in dollars, it means a lot more in the long run. It’s easier for them to earn additional income and pay for a month’s worth of soup, than it is to serve the soup themselves. Think about whether the charity you want to help has an operational need for a particular skillset that you have. Most charities would be willing to pay for things such as accountancy or legal advice, or even website development. So you’re saving them money by offering a service they would otherwise have to purchase. We have a couple of lawyers we can just call whenever we need to and it will often be a quick conversation that’s pretty easy and low cost for them, but is definitely more valuable for us than a donation of a few hundred dollars. A group that is part of the EA community called 80,000 Hours has done some great work in this space. If it’s something you’re interested in, check out their website.
What are some of the main concerns people seem to have when giving, and how might they overcome them?
Some people are concerned about fraud. They give to local groups because they want to see how the money is spent and see it improving lives directly. They’re worried that if they were to give to charities overseas they wouldn’t know if the money reached the people who need it. The EA community, and lots of charity evaluators such as GiveWell and Giving What We Can, put hundreds, even thousands, of hours into evaluating some of the top charities around the world to make sure their finances are in order and the money is going to the programs and people who need it most. If you donate to a charity that has been vetted by one of these evaluators, you can feel safe about giving, and see the good your money is actually doing.
Another hurdle some people have is thinking that giving away a portion of their money will have a negative impact on their quality of life. But, research shows people who give to charity are happier on average than people who spend their money on additional luxuries to improve their own life, such as a TV or a new dress. This is even true for people who donate large percentages of their income each year — up to 30 percent sometimes. Finally, there are people who think a small contribution can’t make a difference. They see their government giving millions of dollars in foreign aid, or large companies giving tens-of-millions of dollars each year, and think ‘what is putting a few hundred dollars into that pile going to do?’ It turns out that by donating just 10 percent of their income for the duration of their career, someone living on the median income in Australia, UK or USA can save up to 40 lives. That’s a huge amount.
Wow. That’s really significant. What if someone has found a good charity, but it’s not tax deductible in their country?
That is something I thought about a lot when I was working in Australia, because many of the top effective charities were not tax deductible there. Doing the maths, if you give something to a charity that is tax-deductible, maybe you could afford to give an extra 20 to 40 percent of your donation, because of what you get back. But, the difference between an average charity and the very best charities can compound to be a hundred or even a thousand times more effective. So, while the total amount we can afford to give might be smaller if it’s not tax deductible, it can be much, much more effective to give what you can to a highly effective charity. As a side note to people in Australia, you can find those effective charities on our Aussie site here. The Against Malaria Foundation is one that is highly ranked and tax deductible.
We’ve spoken mostly about individuals. Do you have any different tips for businesses?
Some of the thinking is the same, but there are definitely differences. The biggest is that there is always a balance between choosing charities that align well with your brand’s mission, and choosing what is most effective. Companies often have to think about whether the project they donate to aligns with what their company cares about, because if you donate to a particular charity then your customers, suppliers and staff need to care about it too. You want to make sure the cause you choose is familiar and relatable. A lot of the good you can do as a company is promoting the charities you work with and encouraging the people who love your brand to do the same.
From an EA perspective, you can do a simple calculation to figure out how much extra funding you could raise for a charity that really aligns with your brand, compared to another charity that doesn’t align so well. Then, compare the effectiveness levels of those charities. If one is, say, a thousand times more effective than the other, you have to believe that you can raise or donate a thousand times more money to the less-effective charity in order for that to be the highest impact, if that’s the one that has a better alignment to your brand.
Can you recommend any tools for companies who want to assess charities, not just on their validity, but also their effectiveness?
GiveWell has an excellent vetting process, which as I mentioned earlier is great if you’re concerned about fraud and making sure the money you give is getting to the right people. You can also go on the GiveWell website to see their evaluation process — how they pick the charity, how they vet them, the due-diligence requirements. So you could replicate the process with any charity if you want to. Sometimes it’s easy to focus on a charity’s compelling story about how big the problem is and how bad it is, but you also want to look at how they’re proposing to solve it. You can use GiveWell’s site to understand which intervention tactics are more likely to solve the big problems. Choose a cause and intervention that is particularly cost-effective to support. It can sometimes be far more cost effective to support a charity that is overseas, rather than one that is local, just because of differences in the cost of living.
You can also ask to see a charity’s annual report to look at their finances, and how they measure their impact. It’s really common to try to assess a charity based on the amount they spend on advertising or administration, but I challenge you to ignore that completely and focus on how much good they have done, given the resources allocated to the causes they’re trying to help.
Thanks so much, Tara. If people are interested in learning more about Effective Altruism. Where can they go?
This post was originally published on Medium by Bellroy. As part of its responsible-business goals, Bellroy commits 1 percent of its sales revenue directly to the most effective charity projects we can find. This is guided by the Centre for Effective Altruism, GiveWell, and the global Effective Altruism community. You can read more about Bellroy’s approach to responsible business here.