Effective giving

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Effective giving is the practice of making charitable contributions with the intention of maximizing social good.

Principles[edit]

High Impact[edit]

Effective giving seeks to maximize the impact of every dollar spent. Impact on human quality and quantity of life is measured with the DALY, or Disability-Adjusted Life Year. This measure of disease burden is expressed as the number of years lost due to ill-health, disability or early death. The DALY is a key measure employed by the United Nations World Health Organization in such publications as its Global Burden of Disease.[1][2] The highest impact charitable contributions will be those that have the lowest cost per DALY averted. The health improvements of high impact projects can be 100 times more effective than low impact projects.[3]

The primary method of measuring impact is the randomized controlled trial. Randomized controlled trials are considered to be a reliable form of scientific evidence in the hierarchy of evidence that influences healthcare policy and practice because randomized controlled trials reduce spurious causality and bias. Certain medical interventions (like vaccination) are already backed by high-quality medical research, and so there is a lower burden of proof for charities doing these types of programs.[4] The following academic groups do randomized controlled trials on other types of interventions as well: Poverty Action Lab[5] and Innovations for Poverty Action.[6]

The Copenhagen consensus 2008 listed 15 problems to be most cost-effectively treated; on the list were (1) micronutrient supplements for children, (4) expanded immunization coverage, and (6) deworming.[7]

High Efficiency[edit]

Effective giving seeks to maximize the efficiency with which charitable donations are allocated. High efficiency charities will spend a low percentage of their revenue for fundraising and administrative activities, so that the maximum revenue can allocated to the charitable service. However, this line of reasoning is disputed by some, including Dan Pallotta [8] who argues that charities should be encouraged to spend more on fundraising if it ensures they increase the amount they can allocate to the charitable service overall. Additionally, a study by Dean Karlan "found that the most effective charities spent more of their budget on administrative cost than their less-effective competitors",[9] presumably because spending on administration costs may include analyses of whether a particular activity is effective or not. Thus, the extra spending on admin could lead to resources being focused on the best activities.

Accountability and Transparency[edit]

Effective giving seeks to ensure that a charity provides sufficient information to stakeholders for them to judge the impact and efficiency of the charity.

Pledging to give effectively[edit]

On the webpage for his book The Life You Can Save,[10] Peter Singer encourages people to pledge a certain percentage of their incomes to giving and recommends GiveWell as a source for where to give.

Giving What We Can is another group that is building a community of people who pledge a percentage of their income (at least 10%), and recommends where to give.

Benefits[edit]

  • Increased giving. Donors give more money when high-quality evidence shows they can have confidence that donations will be well used
  • Change incentives for charities. The growth in popularity of effective giving creates an incentive for charities to align with its principles
  • Have a bigger impact. The top recommended charities on GiveWell or Giving What We Can estimate donors can save a life for as little as $3400 (by giving to the Against Malaria Foundation, for example).[11]

Example[edit]

Helping the Blind[edit]

The cost of a guide dog for the blind is $42,000.[12] As an alternative, the cost of performing surgery to correct trichiasis, the blinding stage of trachoma, often costs as little as $40 in developing countries.[13] This surgery is 80% effective. Therefore, sight can be restored to 840 people for the cost of one guide dog, and the guide dog does not restore sight.[14]

See also[edit]

Groups/blogs related to effective giving[edit]

References[edit]