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Luke Furness

Member Profile: Luke Furness

We recently spoke with Luke Furness, an Australian lawyer who started his effective giving journey after picking up a book during COVID lockdowns. He also was the previous CEO of Out for Australia, a national LGBTI+ student mentoring non-profit, and currently volunteers at his local community kitchen. 

Tell us about yourself. What keeps you busy and what makes you tick?

Day-to-day, I'm a lawyer at a major Australian law firm. I love dancing (hip hop please), bird watching, having friends round for dinner, and reading books (particularly moral philosophy).

I drifted into law on autopilot because I got the grades in school, because I was good at debating, and because it seemed prestigious and secure. It turns out I really like it (the intellectual challenge, the strategy, and working with some super smart people), but I only discovered that much later.

I've kind of always been a joiner and wanted to do "extracurriculars". I had leadership roles in quite a few university societies and so was keen to contribute in my working life too. I also kind of stumbled into Out for Australia, an Australian nonprofit, too. I found them before LGBTI inclusion initiatives had really taken off and was keen to see more of them in my own home town of Brisbane, Australia. I was attracted to the idea of supporting LGBTI students transition into the workplace because I wasn't out when I first started at my law firm. I started as the Queensland director and then got the chance to apply for the CEO position which was my first leadership position in a non-profit and something I'm really proud of.

Tell us about your effective giving journey.

It all started in COVID when it felt like the world was falling apart and I did a lot of thinking about what there was to live for. I stumbled into a bookstore on the Sunshine Coast and picked up a book on a whim - Hugh Mackay's 

. The bookshop owner said "you'll enjoy that," and I did. It was the first book that showed me that a good life is a life lived for others and I've been looking at ways to make an impact ever since. The book taught me a few things:

First, that happiness is a fleeting emotion. While happiness is a great thing, having your own, personal happiness as a life goal seems difficult and unfulfilling. Second, that living a good life must mean a life lived for others, even if you don't know them or even particularly like them. Third, that most people discover that way too late in life and spend too much time barking up a succession of wrong trees. Why not start right now?

I think I was sold by the logic of effective altruism. It seemed right that if I can give up a little to prevent a lot of suffering, then I probably should. I also thought that it was a bit of a cop out to expect the billionaires to do all the giving. There are many of us living comfortable, middle-class lives in western countries, but that have some resources to spare.

I was very apprehensive at first about donating even 1%. I remember (embarrassingly) feeling like I was a sucker for giving away "so much" to people I'd never meet when I didn't know anyone who did the same. Now, I give 10% and barely notice, which proves just how lucky I am and how I should have been doing this for years.

Why did you take the Giving What We Can pledge?

To keep myself committed. I liked the idea for a life-long commitment, particularly as I got married this year too!

What are the issues in the world that you care most deeply about?

Ending extreme poverty. It just seems such an obvious proposition that there are still people in extreme need of financial assistance to have a chance at a quality life.  There are a lot of causes that we don't know whether they help or not, but I was convinced by the research from organisations like GiveWell that there are effective ways to get the money and supplies to those that need it.

Which organisations do you give to (and why)?

Effective Altruism Australia. I just let them do the split. I figure if I agree with the logic of effective altruism, I can leave it to the experts to work out the best way to use my money.

At the start, yes. Not anymore. It actually gives me great contentment now to know that I'm giving back.

Do you have any examples of times where you decided to not spend money on something your peers would have?

I live far more modestly than I once did. I remember being in Florence when I was 19 and buying a pair of EUR 360 shoes! That's embarrassing to me now. My last pair of shoes came from K Mart.

Do you try to effect change in any other way?

I've volunteered across several LGBTI+ organisations and was the CEO of Out for Australia, a national LGBTI+ student mentoring non-profit. I also volunteer at my local community kitchen. Despite a strong belief in effective altruism's internationalism, I still find myself drawn to poverty alleviation in my own city.

What suggestions do you have for other people considering the pledge?

Just start by giving a really small amount. It could be the 1% trial pledge or even something less. Then increase it over time like I did. Once inspiration strikes, set up a recurring transfer. Once that's set up, it's "set and forget" and if you're lucky like me, you won't even notice it's gone.

Have any books or documentaries or articles or studies significantly changed the way you see giving?

Have you found anything to be helpful in talking to people about effective giving?

Just talk about what you're doing and how it gives you joy. Don't couch it as things that they should be doing. Be empathetic to responses like "I can't give that much because..." People don't like being told what to do.

Are there any other concrete ways that Giving What We Can has helped you?

I think that there is a warm glow you get from knowing that there are whole organisations out there dedicated to helping people find the answers to living a good life and giving out things, like the pledge certificate, for free. It's cause for great optimism.

For this interview with spoke with Luke Furness, an Australian lawyer who started his effective giving journey after picking up a book during COVID lockdowns. He also was a previous CEO of Out for Australia, a national LGBTI+ student mentoring non-profit and volunteers at his local community kitchen. 

Alana Horowitz Friedman

Aren’t the best charities those with the lowest overhead costs?

I used to be heavily sceptical about charitable giving. I wanted to help others, but worried that my charitable donations might be doing little more than alleviating my own guilt. After all, how could I know that my money was actually 

The pile of address labels, stickers, and greeting cards arriving in the mail from charities I didn’t even donate to certainly didn’t inspire confidence; why were charities spending precious funds on unsolicited address labels while simultaneously putting out “urgent funding appeals” left and right?

Because I wasn’t sure how to evaluate the impact of a charity’s programs, I instead would focus on a charity’s spending habits: in other words, I would use Charity Navigator or a similar website to look up the percentage of funds spent directly on the charity’s programs vs. on administrative costs/CEO pay. I told myself that the charities spending the most on their programs must be better than those spending more on overhead.

I was certainly not alone in my method for choosing charities. Many donors use this ratio (emphasised by several charity evaluation websites) to determine where to give. And it makes sense on a surface level, especially since it’s fairly common to lump charities into one general “doing good“ bucket, without stopping to consider the differences between them. If you believe all charitable programs are doing roughly equal amounts of good, then those that funnel 

 money to their “doing good” programs surely must be better than those that funnel 

Right? Wrong. While I’m still sceptical of what I’ll term “the address label brand” of charity outreach, 

I no longer believe that the ratio of a charity’s administrative costs to program costs is a good way to determine whether my donations will make a difference.

That said, before getting into the nitty-gritty, I want to be clear on one important point: shaking what is often called “the overhead myth” doesn’t mean I’ve lost the impulse to question where my donation is going. In fact, now that I know there’s more to evaluating a charity than examining its spending habits, I’ve actually become

far pickier about where I donate. As a result, I’m more confident that 

the causes and charities I choose to support

What is the overhead myth and why does it matter?

In brief, “the overhead myth” is the mistaken (but widely held) belief that charities with lower overhead costs are more effective.

It matters because most of us donate to help people, society, or the world in some way. Finding a more accurate way to determine which charities best help us achieve those goals is certainly useful.

So if you — or people you know — have been using the 

ratio as a measure of a charity’s efficacy, here are a few reasons to reconsider that approach.

Why aren’t overhead costs a good measure of a charity’s impact?

First and foremost, “overhead costs” don’t tell us anything about the 

 of a charity’s programs. To determine whether our donations will be impactful, we need to know what will happen as a result of donating, and then choose the option that helps the beneficiaries the most. While overhead costs should certainly be kept 

there are several issues with relying on the overhead ratio to determine a charity’s impact:

Overhead costs don’t consider differences in program efficacy

Not all charitable programs are equally effective. Perhaps the most obvious issue with choosing charities based on their overhead costs is that we’re neglecting to factor in 

Will MacAskill, a co-founder of Giving What We Can, offers a silly (but eye-opening) example in Chapter 7 of his book 

. He asks the reader to imagine that he has created “a charity that distributes doughnuts to hungry policy officers.” In MacAskill’s example, the majority of donor funds are spent directly on the program itself — buying and distributing doughnuts — and only 0.1 percent is spent on overhead. He then asks the reader, “Would I really have created an amazing charity? Surely…what we should ultimately care about is the 

charities have. When you give a hundred dollars to a charity…how are people’s lives improved as a result?” (MacAskill 108).

You may think that it’s fairly obvious whether or not a charity’s programs are worthwhile, and that you’d be able to tell just by reading a bit about what the charity does. After all, after hearing the description of MacAskill’s doughnut charity, you’d likely know there were better places to funnel your hard-earned resources!

But program efficacy isn’t always so simple, or intuitive. There are countless examples of 

charities that sound amazing on paper but end up doing little to improve the lives of others

. That’s why it’s important to closely 

 behind the programs a charity is running, rather than just relying on the program’s description or marketing. Stark differences in program efficacy and other factors simply aren’t captured by looking at overhead spending, and can end up making one charity 

It may not be logical to separate “overhead” from “program costs,” since this distinction isn’t clear cut

We’re used to thinking about overhead and program costs as two very distinct spending buckets. But if we really stop to examine what overhead is, this separation begins to break down. In fact, without overhead spending, there wouldn’t be any program spending at all! Why?

 Because “overhead” is merely the people, resources, and tools needed to run an organisation

. To run its programs effectively, an organisation needs to hire talented people to keep it afloat (overhead!)  and fundraise to drive money to its programs (also overhead!) If an organisation doesn’t run effectively, it won’t be able to run its programs well. So why the insistence that charities should spend as little on overhead as possible?

Part of this may have to do with a misconception that the business rule of “spending money to make money” doesn’t apply in the nonprofit sector. Dan Palotta attempted to remedy this misconception in 

, and soon after, some well-known charity evaluators apparently 

attempted to correct their embrace and promotion of the overhead myth

. However, despite some moves within these organisations to focus more on impact, it seems like this change has yet to take hold. Charity Navigator, for example, still uses percentages of program, administration, and fundraising spending as part of

 a charity’s “financial health” rating

. The organisation acknowledges that “effective charities must recruit, develop, and retain talented people,” but they also state that “Givers support charities for their programs and services, not for their ability to raise money.”

While this is certainly true, it’s kind of like saying that farmers are useful for their ability to 

. Since their ability to grow crops directly affects their ability to provide food, this statement isn’t entirely logical. Unless a charity was only fundraising to cover the cost of fundraising staff (equivalent in our metaphor to a farmer 

 with no plans for distribution), donors and charity evaluators 

 acknowledge that more money raised often means more money funnelled to a charity’s programs/services!

Contrary to popular belief, low overhead may be correlated with 

Much has been written about the dangers of charities skimping on overhead to meet donor expectations. We already touched on the well-known 

, which goes into detail about some of these dangers. Jonathan Meer, 

, writes that too much donor focus on overhead “can lead charities to underinvest in crucial operating infrastructure, especially skilled workers, thereby diminishing their ability to deliver services.” This topic is also explored in an article entitled “

,” in which the authors open with the statement: “Organisations that build robust infrastructure—which includes sturdy information technology systems, financial systems, skills training, fundraising processes, and other essential overhead—are more likely to succeed than those that do not. This is not news, and nonprofits are no exception to the rule.” In fact, it turns out some nonprofit organisations 

even engage in misleading reporting/significant underreporting of their overhead costs

, likely because of stringent (and misguided) donor expectations.

 a good measure of a charity’s efficacy?

Even if examining the ratio of overhead to program spending did

help us make informed decisions about choosing charities (and I hope you agree by now that it doesn’t), this metric does very little to narrow down our giving options. The result of so many charities striving to meet overhead expectations (whether through underspending, misleading reporting, or both) is that an overwhelming number of organisations — differing widely in their efficacy — trumpet low administrative costs. Over 250 charities are listed by the website Charity Watch as “top-rated,” a categorization that necessitates (among other criteria) spending at least 75% of their budget on programs. Thus, even if we assumed that low overhead was a good way of determining where to donate, we would 

 need a framework for deciding between all the charities meeting this criteria.

Interestingly, the website CharityWatch acknowledges this, stating on their “Top-Rated Charities” page, “Because many factors determine a worthy charity, we at CharityWatch suggest that you use the ratings on this page not as the sole determining factor in your decision, but rather as an aid.” Unfortunately, the page does not mention what these other factors might be, nor provide information about the (arguably) most important factor for determining the efficacy of a charity — 

Cost-effectiveness: everything you thought overhead was and more

If you’re still clinging tight to the idea that overhead spending must tell us 

 about the efficacy of a charity, you’re not alone. Organisations certainly shouldn’t spend 

 much keeping themselves afloat that relatively little is left for what they actually claim to be doing, because then our modest donation might not help those in need. In other words, most of us are attracted to the overhead myth because of the intuition that we should make sure our money is really supporting the cause

This intuition is absolutely correct; it’s just that examining overhead spending isn’t the way to approach it. We’ve explored how money donated to charities with low overhead costs can actually do very little to support a particular cause —  especially if the programs are ineffective —  and how charities with higher overhead costs can actually do quite a lot to support a particular cause, especially when those costs end up funnelling more funds to high-impact programs. So, rather than looking at overhead to determine where our money will go farthest, we can use a more accurate measure: 

If Charity A and Charity B are equally impactful, and Charity A spends less overall, then Charity A would be more 

. In other words, if I can have the same impact by spending less money, then my donations will go farther. Looking at how cost-effective an organisation is means comparing their 

, meaning overhead spending is usually already factored in!

Without simple evaluation measures like overhead spending, the task of charity evaluation becomes much more difficult. (Perhaps that’s why so many well-known charity evaluators choose to focus on spending habits; if they rated the 

 of a charity’s programs — a task that requires considerably more research — they likely wouldn’t be able to provide ratings for as many organisations.)

But this is an area where it doesn’t make sense to go for quantity over quality. Because there are so many people in need, it’s incredibly important that our limited resources are truly helping! So let’s make sure the metrics we are using to determine efficacy are as reliable as possible.

GiveWell, a charity evaluator that focuses on program impact, takes the 

 of identifying promising, evidence-based programs and then recommending 

, a method that yields fantastic giving opportunities. In addition to consulting organisations like GiveWell, we can also use frameworks like the one explored on our 

 page, which is briefly summarised below (and which GiveWell’s recommended charities score quite well on!) You can also find highly-impactful organisations that score well on this framework via our 

1. Does the charity do work in a high-impact cause area?

A high-impact cause is generally large in scale, tractable, and relatively neglected. In other words, it has the potential to significantly impact a large number of people (scale), offers a reasonable chance at successfully making progress (tractable), and needs funding/resources (neglected).

2. Are the charities’ programs backed by rigorous evidence?

Charities that use evidence to evaluate their programs for efficacy are more likely to truly have an impact, rather than ending up in the “looks amazing on paper but does little/potentially causes harm” category

A charity is cost-effective if its impact greatly outweighs its cost; in other words, if it achieves a lot for relatively little. Just like you wouldn’t spend $5,000 dollars on a coffee when you can get the same cup for $5.00, we want to choose charities that make the best use of our limited resources. Of course, this last metric isn’t always so simple. Many policies/programs don’t lend themselves to gold-standard impact measures like randomised control trials, and this shouldn’t necessarily be a reason to dismiss them outright! Since reality is messy and the future is not always predictable, using a 

 of tools to estimate cost-effectiveness, including concepts like 

, helps us make more informed decisions around cost-effectiveness.


So no, looking at overhead costs likely isn’t the best way for you to determine where to donate. However, there are plenty of other markers of charity excellence (like those described in the framework above) that do a better job 

 the overwhelming number of options out there, so we can be confident that we are truly helping the cause(s) we care about. Happy donating!

1. https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=35

2. https://www.charitywatch.org/top-rated-charities

Will MacAskill, a co-founder of Giving What We Can, offers a silly (but eye-opening example) in Chapter 7 of his book 


It may not be logical to separate “overhead” from “program costs,” since this distinction isn’t clear cut.



Contrary to popular belief, low overhead may be correlated with 

Does the charity do work in a high-impact cause area?

So no, looking at overhead costs likely isn’t the best way for you to determine where to donate. However, there are plenty of other markers of charity excellence (like those described in the framework above) that do a better job 

Sam Voigt

Member Story: Sam Voigt

Tell us about yourself. What keeps you busy, and what makes you tick?

I’m a 28-year-old living in Cape Town and I want to see a better world.

While I have been interested in effective altruism for a couple of years now, and got career advice from 

 last year, I'm still working out my career plans.

80,000 Hours helped me realise the breadth of the possibilities, and I spent some time examining various ideas. I am currently exploring my programming strengths — I recently got a job as a software engineer and I’d like to test my abilities in machine learning as well.

In my spare time, I enjoy playing five-a-side football and trying my best to make a decent vegan meal.

Before finding out about effective altruism, I was already aiming to donate ~10% of my income to charity. This was partly because I felt that others could use that money much more than I could, and partly inspired by my tithing mom. (Tithing is the concept of giving away a portion — often a tenth — of your income.) I’m not religious, but I liked the idea so much that I decided to keep it.

Still, I often found it difficult to stick to my giving goals, and my donations were not particularly effective. When I discovered EA, I felt like it was made for me — other people were contemplating (and answering) all the questions that I’d had for much of my life. I even felt ambitious for the first time in a long time.

I’m taking the pledge because I think it will help me to stick to my giving commitments.

I think I am very privileged and I can afford to give away a decent chunk of my income. Spending more money on myself increases my life satisfaction very marginally, but donating it makes a big difference.

I have donated to a few organisations; the exact breakdown changes based on how my views shift over time:

, which work to safeguard the future of humanity. I believe that both are capable of finding exceptionally good impact opportunities at the right moments.

, which is able to prevent an impressive amount of carbon emissions. While this organisation also falls under the banner of safeguarding the long-term future, it is also helping people today by reducing air pollution.

, which has a remarkable track record of high-impact work backed by strong evidence. It is also tax-deductible for me here in South Africa, while many other EA organisations are not.

Definitely! Especially when I have big expenses on the horizon. One of the main reasons that I am taking the GWWC pledge, rather than simply donating independently, is to hold myself accountable to my own values. It also helps to budget for the donations ahead of time and set them up as automatic payments.

The most important thing we can do with our lives is help others. We have opportunities to do so all the time — we shouldn't waste them.

I would love to find my EA career path. It is a process, and one worth doing slowly and deliberately!

Just showing excitement. Donations can often seem like a burden or a duty, but showing the joy that comes with improving the world is, at the very least, a lot more fun at a party.

Giving What We Can member Sam Voigt has donated to a few organisations; the exact breakdown changes based on how his views shift over time.

GWWC Team

A transcript for our interview with Yield & Spread's Rebecca Herbst

Financial Independence to Philanthropy: Yield & Spread's Rebecca Herbst

We interviewed Rebecca Herbst earlier in the year about financial independence, improving financial literacy and effective giving. Rebecca is an early retiree and now spends her time working on her project to improve financial literacy, Yield & Spread, where 100% of the profits go to charity via The Life You Can Save. Rebecca is also on the board of directors for EA Salt Lake City. 

Rebecca Herbst

00:00 - Introduction and how Rebecca retired early and discovered effective giving 

Blog

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Aren’t the best charities those with the lowest overhead costs?

Member Story: Sam Voigt

Financial Independence to Philanthropy: Yield & Spread's Rebecca Herbst

Member Profile: Forrest Wells

Member Profile: Meera Bradley

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