Podcast interview #2

Luke Freeman with Josh Ross: Maximising our charitable impact

25 min read
8 Sept 2021

"By not talking about giving, we reduce the amount of giving." - Luke Freeman


In this episode of the Giving What We Can podcast, the tables have been turned as our Executive Director, Luke Freeman, is interviewed by Josh Ross, the CEO and co-founder of Humanitix, a ticketing platform that is set up as a charity so it can turn its profits into good.




00:00 - Introduction

Josh Ross: Hi, I'm Joshua Ross, co-founder of Humanitix. And with me today is Luke Freeman, executive director of Giving What We Can, an organisation that helps people maximise their charitable impact. Giving What We Can Was originally founded by two Oxford philosophers, Toby Ord and Will MacAskill. And Will MacAskill, in particular, is very well known for writing a book called Doing Good Better, which is probably the thought-leading book on effective altruism in the world today. And it's a great book. If you're interested in how to use not just your money and resources but also your time and career to maximise impact for the world, it's a must read.

01:30 - Origins of an altruist

Josh Ross: I met Luke through Global Shapers, which is a group of the World Economic Forum that is designed to give a voice to young people in their 20s, adults, but who typically aren't representative in global affairs. That's how Luke and I met. And he's got a really interesting background starting, in my opinion, at school.

Luke, not to write off your first 15 years of life, but why don't you tell us a bit about how you forged your career and got off the traditional path.

Luke Freeman: Yeah. Well, it actually started even before that. I was homeschooled for the first seven years of my schooling life. And then, when I went to school, I was fortunate enough that the New South Wales Institute of Sports went by and measured everyone up and got them to jump and things like that. And I ended up being on the fast track for pretty high-level rowing. That threw a spanner in the works in trying to finish my HSC and show up to classes at 7:30 when I was travelling and rowing at a state and national level.

So, I had to figure out: "What am I trying to do?. Well, I want to get a degree. I want to go to university -- I know the benefits that it affords someone" and so, I found out that technically I could enter as a mature age student just by sitting entrance exams and doing some bridging courses. So, at the end of grade 10, over the summer, I found myself starting university at the ripe old age of 15. And to fund my way through that, I had to be independent, which meant that I was working as a freelance consultant doing web design and development. So that was an interesting path, but it meant that I also had an income fairly young and was, from quite a young age, thinking about what I would do with that income.

I remember being really shocked to realise how much I had relative to other people. Again, I was from a middle-income family in Australia, which doesn't seem like a lot. We were careful with our budget, cooked all the time at home, and didn't go on a lot of holidays other than camping. But realising that there are some people who didn't have access to basic healthcare and education and that that was just purely due to the luck of circumstances -- it drove me to do what I can to make a difference.

I did a lot of things when I was in school, like the 40-Hour Famine (I did it, and then I ended up organising it for both my school, my church) and was quite involved with campaigns like Make Poverty History. So, when I entered university and got involved with things there, I was trying to seek out "How does the world really work? How do we solve some of these problems that we're facing?". I decided before I let my expenses start to expand, as we typically do, I would try to make some form of giving commitment.

And when you decide to give away a decent portion of your income, it suddenly becomes really important where you're giving. It's not just about the giver (and the idea that you're giving away and you're trying to be selfless). It's about caring about what happens with that money: is it helping people? If I was giving money away and it was doing harm, that would be terrible. If it was doing some good, that would be okay, but I really want that sacrifice to be worthwhile.

And so, that's when I discovered the early work of Giving What We Can and a charity evaluator called GiveWell. And that led me down this path of learning a lot more about how to do the most good with our resources in general.

Josh Ross: That's awesome.

Luke Freeman: Thank you.

04:30 - Objections to charity

Josh Ross: I'd like to start with the more tricky topics. Some people, they're really anti-charity. It's kind of weird when you encounter these types of people, but I've definitely met a few. They think that sometimes it does more harm than good. Luckily, it's a minority. I mean, all the major religions encourage giving; some of them mandate it. Most people you meet understand that a child who's dying at the age of one from cholera needs a handout, not a job. I'm keen to understand: what are the main arguments you come across giving? And how do you tackle those in your role?

Luke Freeman: You get different objections from different worldviews. There are evidentiary objections, such as not thinking that particular interventions work, and some don't. Some charity doesn't work, and that's why it's important to find stuff that really does.

Sometimes it's philosophical questions. Around the progressive side of politics, it's "crowding out" what the services that government should be providing and the more conservative side of politics, it might be the view that people should be "self-sufficient" and that "charity is a handout".

So on that first [progressive] one: governments can generally do a good job of providing services when people are able to speak for themselves.

But if you're living in another country, you have very little ability to influence the flow of capital into that country. And then you've got things like animals: they have very little voice for themselves. And future generations. These groups are all going to be underrepresented by traditional democratic governments. So, it'd be very surprising if our governments were acting on behalf of these voices, which aren't going to be heard. And that's a role that charity can play. You can say, "Look, I care about these voices which aren't being heard and don't have the ability to speak for themselves. So, I want to put my money where my mouth is."

On the other [conservative] side: you've got the view that "people should be self-sufficient" and "charity is a handout".

A lot of the time some of the best charity is preventing terrible things from happening unnecessarily. So, that is things like neglected tropical diseases, intestinal worms, or malaria and things like that. These problems really prevent people to get educated, to get jobs, to show up. It's like COVID at the moment: if you're sick and dying unnecessarily or you're not able to go to work for fear of getting sick and things like that: this is just an impediment. And if you remove the impediment, people are able to help themselves a lot better. Removing impediments is one of the things that you can do with charities. You can fund programs that remove impediments. And there are lots of these things that really help people to better help themselves and help communities to better help themselves. And so, it's not "teach a man to fish". It's "stop polluting the fishing pond".

Josh Ross: That's a great way to put it. I like that.

Yeah, I've occasionally come across one that particularly sticks in my head, which is the "self-made man type of rationale".

I've got to meet a lot of wealthy people just in where I was born, in Sydney, but also in my ventures with Humanitix, raising philanthropic capital as a charity. The vast majority are incredibly generous: they recognise that they're in a position to give back and that they've made their fortune from a combination of luck, hard work and a society that's conducive to it. However, you do meet people that take the view of "My parents came here as immigrants with nothing. They worked really hard to give me the education, and I've worked really hard and created this world for myself, and I'm a self-made human being." And I've always taken that with quite a surprise because it's not hard to recognise that you don't choose your family, you don't choose that you weren't born addicted to meth or alcohol, or you don't choose your IQ, you don't choose where in the world you were born. Not to take away from anyone who's built anything of value, but there's still an immense amount of luck in it.

Is that a common thing you come across? Or is that just the most outrageous one? It's sticking in my head as something that comes up.

Luke Freeman: Yeah, look, it's something I definitely come across.

And the inverse is actually the top reported motivation for our community for the reason that they give: it's the recognition of the luck they have. Maybe they might take it as an obligation to help others, but there's also this huge opportunity when you think about that luck.

08:45 - Our opportunity to help others

Luke Freeman: We live in a really weird time in history where we have a huge population of humans that are actually really quite connected. And throughout most of human history, you may have been able to affect the lives of those in your immediate vicinity and be responsible for what's happening to the lives of those in your immediate vicinity, but we now have interconnected supply chains. We have money that is incredibly fungible. A dollar spent here could be spent there. So, if you're someone who is earning a median income in Australia or the US, you're in the top, at least 5% if not 1% of the world's richest people. And that money can go so far.

And so, just purely by being lucky, not only is there maybe some arguments of having a responsibility to share that luck, but there's also this just huge opportunity.

If you imagine you were walking home tonight and you saw someone tripped onto the road, and you were able to run in and grab them before a car ran them. You would feel just incredible that you had saved someone's life, You had this opportunity, and you acted on it.

And the inverse would be terrible. If you just walked by and you saw that happen, you would never live with yourself.

But we actually have these opportunities to be saving lives on a regular basis, and we can do that through charity. That is an incredible privilege to have that opportunity.

Josh Ross: I more recently re-read The Life You Can Save by Peter Singer. He's come out with a new edition. And it's a great book.

It talks about the morality of giving, and it draws this picture where, say that you're lucky enough to be in Australia, earning a hundred grand a year, working really hard. For you to give a grand up is probably not going to change your life in any meaningful way. You won't miss that $1,000 pre-tax, which is roughly $600 after tax. But to a farmer in Sub-Saharan Africa or India, that $1000 might double their annual income per annum. That might mean that a child gets three meals a day instead of one. And so, you're in a position where it doesn't cost you much, if anything, in your life to radically change someone else's. And that's an incredibly lucky position to be.

11:08 - Addressing moral demandingness

Josh Ross: But it's also an incredibly extreme philosophy to take because: "Where do you draw the line?". It's very extreme, that way of thinking. And so, I think, yeah, it can backfire when people hear that because they kind of shut off to it. They say, "Oh, that's, that's insane. Where do you draw the line? Why is it wrong for me to spend my money on my things?".

What are your thoughts on that?

Luke Freeman: A lot of people do buy it, that thought experiment: that we do have this huge opportunity and maybe even an obligation to help others. But "Where do you draw the line?" is the immediate question. It's pretty demanding.

And so, the answer to that is "You draw the line at an amount that is meaningful" because you really cannot do the most good if you immediately burn out because you go, "Well, I'm going to give everything and then be destitute myself and then stop immediately. I can't do that. It's just not sustainable."

It helps to try and find an amount that is sustainable and an amount that's culturally accepted.

We generally recommend 10% of income for those who have means and at least 1% for those who are kind of "on the route".

We're trying to really create a culture around setting a "giving budget" and going "This is how much I'm going to give" and then try to keep beating your personal best. See it as something you might want to increase over time, and many people do. But don't let staring in the face of a potentially slippery slope be a reason not to give. Just pick that first amount that you're going to start with. If it's 1% of your income, whatever it is, an amount that's meaningful and sustainable. It really gets you past that barrier of "Oh, where would I stop?". Well, you stop where you decide to stop but deciding to start is really part of the battle. That is a moment when a lot of people go, "Ah, I can act. I feel like I can actually have some sensible path forward because I do care about this. I do want to see the world a lot better than it is. I know I have this opportunity, and now I have a framework to work within."

13:03 - Giving effectively

Josh Ross: Yeah, awesome. To pull it back from how much we should give to, I think, what a lot of people relate to is "How do I give effectively? I have a full-time life, a full-time job, a full-time family to look after. I don't have the time, and I don't know where to start in terms of researching what is an effective charity to give to as to what might be very inefficient."

So, what's your advice for people in that space?

Luke Freeman: Yeah. So, the complicated answer is incredibly complicated. And that is basically: learn how to do charity evaluation and become a charity evaluator, and you devote your time to that. And very few of us have the time and energy to do that. So, the easy answer is that there are a number of organisations that do really good work in doing charity evaluation. They do the due diligence for you, and they do incredible work at trying to find how to get the most impact for the money that you're spending.

You might say that "What I want is years of life saved" or "What I want is years of education" or some kind of measure of impact. Then you can try and find which organisations are best able to provide that impact for the lowest cost. That way, you can really get that huge increase in your impact on the world.

As I said before, deciding how much to give, that can be a big question. And most of us could maybe at best give ten times more than we're currently giving (unless we're giving nothing: we can give infinitely more). But most of us could give easily 10 to 100 times more effectively.

There is a huge difference in charity effectiveness because it's not an efficient market. If you're going to buy a coffee and one costs $4 and another one cost $4,000, you would notice that because you will go "There's no way I'm spending that" but because we've got this disconnect between who the donor is and who the beneficiary is, there is no strong price signal of how costly certain ways of helping are compared to others. And that's why you need to have this kind of middle step of evaluation that makes a huge difference in understanding what the impact of the intervention is.

15:16 - Differences in impact

Josh Ross: That's a great point.

And, I think, tangible examples really help people understand this because when I first heard this, I was like, "Huh?".

But the idea is that if you care about a specific cause area, say it's animal welfare, and you care about saving animals from suffering, then there's a couple of different ways you can approach that. And one might be to find your local animal shelter, or another one might be to take on factory farming of chickens or farming of pigs or something where a lot of animal suffering happens (if that's your cause area. I'm not trying to tell people that eating meat is inherently wrong or anything like that). The difference between donating to your local animal shelter that takes strays, a beautiful cause doing lovely things, but it's not 50% as effective as taking on factory farms. It's a fraction. The factory farms are a hundred times more effective in terms of reducing animal suffering and saving animal lives.

And so the idea there is that different charities are not 50% more effective but might be hundreds of times more effective (whether it's stopping domestic violence or animal welfare, or environmental causes). There are these think tanks out there that exist to try and solve those problems and recommend to you, no matter what, based on your values and what you care about, what the most effective things are to fund. And often, our intuitive, emotional drive to what feels good is far from creating the most impact.

So with Giving What We Can, what I love about your site is you really guide people towards whatever they care most about and the resources they can give. They can read on how to be effective in that space. And in an afternoon, you can become a lot more knowledgeable on what you apparently care so much about.

Luke Freeman: Yeah.

Josh Ross: This was my experience. I thought, "Yeah, I really care about education." And then I dabbled on your website and I kind of realised, "Oh wow! If I really care about it, why don't I spend a Sunday afternoon reading these awesome resources that really summarise where we're up to in the world in terms of evaluating these things." It's not like months of becoming an expert.

Luke Freeman: Yeah. And the thing is, the world is complex. The world is really complicated. And there are a lot of really great ideas. And you and I have both been amongst things like startups. And most startups fail. And similarly, most ideas aren't going to succeed in the world, but with your business, if it's failing because the customers aren't buying it and you'll just stop getting money, you'll stop getting investment, you'll stop getting customers, but if you don't have that strong signal of "Is this really worthwhile?".

There's no default way that charities cease to exist. So long as they've got donors, it doesn't matter how much it's helping the beneficiaries.

17:50 - Discovering what we value

Luke Freeman: It comes back to, as you were saying before, "What is it that you value?" and that's often the first question. And sometimes, we don't even realise what it is that we value.

I have this conversation with people a lot about the environment. And I had gone through this myself where I care a lot about environmental causes, but I just would say, "Oh, I care about the environment," and I wonder, "What do I actually mean by that?". Then I realise, "Well, I care about the fact that the environment is the home for humans and animals and everything like that. And so, what I really care about is things like having good ecosystems that are supportive of life and things like that." Then I consider, "Well, what about species? Do I care about the number of species, or is extinction bad because it's the end of the line, or is it bad because it causes suffering?".

You have these really deep questions about what it is that you actually value. And once you know what that is, finding the best things for that is going to look different for different people because we have different values. But there are some "clusters" of world views. When you really get down to it, a lot of the time, that comes down to some form of consequence. And often, that is affecting the lives of some beings that are experiencing the world. And so, if it's humans alive today that you care about, well, you just get so much more bang for your buck by helping people in lower-income countries. And if you're trying to help people in your own country, often it's things that are going to be really neglected like mental health, and that's due to things like stigma or populations which don't have as much ability to speak for themselves, be it refugees or minority segments of the population.

There are these segments where you can find these incredible opportunities.

As you were saying before, if you care about animals, if you don't care just about domestic animals in your house, if you just care about animals and the experiences that animals have as well as humans, one of the biggest travesties is factory farming, in particular chickens and pigs. Pigs, in particular, you look at them, and they're so similar to humans. They're incredibly social animals. They're really smart, and they have some of the worst conditions. And it's often not actually that expensive to change. And there are paths to change. And it doesn't require everyone going vegan.

20:08 - Costs of improving animal welfare

Josh Ross: Is there any evidence out there (because I haven't read much on that topic) about if it is a massive cost burden on the farmer? Because I can appreciate their perspective, they're having to compete on an international scale, or are you saying that it's actually not that much of a cost impediment?

Luke Freeman: It's really not. And even then, it's often passed to the consumer. And, again, recognising how wealthy we are, we can often afford it.

Recently there was a win in France that would increase costs by about 1 euro cent per half dozen eggs to stop torturing male chicks. What would happen is they would wait until the chicks are old enough to be able to figure out what sex they are, and if they're male, then they would put them through a crushing machine (it's the kind of cheapest way of killing), it's pretty horrific stuff. Whereas it costs about 1 cent per half-dozen eggs to pre-screen the eggs so that they are never born so that you're just not creating a being which can have suffering, and it's about one cent per dozen. It's just a legislative change, and that came from highly effective advocacy organisations, like The Humane League, doing work in this area that just can have repeatable successes.

Josh Ross: That's such a good case study because it's not saying "don't eat eggs or chickens". So, it's not asking people to be "values conscious" on that front or for people to have different views on diet, and it's also not for forcing farmers out of business because if it's legislated, everyone has to do it. And so, it just gets borne by the consumer, and it's immaterial. That's brilliant.

Thanks for sharing that example.

21:40 - Upcoming plans for Giving What We Can

Josh Ross: So, what's next for Giving What We Can and in Australia specifically, in New Zealand where our audiences are? What are you trying to achieve right now?

Luke Freeman: So, we've got a few things coming up. One actually has Humanitix as the ticketing provider. Peter Singer, one of our founding members, has his speaking tour, which unfortunately has been pushed in Sydney due to the pandemic, but we'll find a date for that. Giving What We Can is one of the major sponsors there. We're really hoping to get a good showing of people along there and hoping that that'll be a way that people can discover the ideas of effective giving as well, and if they want to join an effective giving community, we're right here for them.

Many of our members in Australia donate via Effective Altruism Australia, which I'm on the board of. We had our biggest year ever. We moved about $4.2 million to highly effective charities, which was a promising thing to see, especially given the context of COVID in 2020 and 2021. People were really putting their hands into their pockets and being generous and wanting to help as many people as possible.

22:50 - National differences in generosity

Josh Ross: Amazing, amazing. I recently read something that surprised me. Daniel Petry, he's very well known in the technology sector in Australia. He ran Microsoft in Australia and reported directly to Bill Gates for a while, and now he is one of the most successful venture capital investors in the country and also a major philanthropist. And he did a study a while back that showed the average super-wealthy Australian gives about 4% a year of their income to philanthropy, where the average American in the same situation is giving 16%. That's a 400% higher level, which kind of saddened me because, at face value, I thought Australians are very charitable, but it turns out on the stats we're probably not. And there might be mistakes in the research, but it looked pretty good to me. Yeah, really keen to get your view on that, whether you think it's a cultural thing or a legislative thing with respect to tax. Yeah, what do you think of that?

Luke Freeman: Yeah, there are a few things in that. So, America is generally overrepresented in charitable statistics for two reasons. One, I believe, when you actually really look at the data, they do have a stronger giving culture, and they just celebrate people giving more, whereas, in Australia, it's things like "tall poppy syndrome" or a problem where we don't want to talk about the fact that we give. And therefore, people just assume that people aren't giving. And so, therefore, we do what others do, and if we see that no one else gives, we think, "Well, why should I give?". So there is a spiral effect whereby not talking about giving, we reduce the amount of giving. But in fairness, there was also some degree where in the US, the criteria of charity is a lot broader. If you're looking at what people were putting on their tax return and the "charitable sector", it includes things like many schools and hospitals and a much broader range of cause areas, including research and environmental, animal welfare---stuff like that that doesn't get the same charitable status in Australia. And there's also a lot more religious giving in the US as well. So, if you start to narrow down to look at just your similar sets of data, the gap isn't quite as big, but it is still smaller in Australia. And I think, as a country, as well off as Australia where we "talk the talk" about giving everyone a fair go... we need to do better.

Luke Freeman: I think if we put our money where our mouth is, we could really be leaders in giving as well -- as we're trying to be leaders in many things throughout the history of the nation. We were the first country in the world where women could be a member of parliament and the first country in the world where women voted. We've got some tragic things on our record as well, no doubt about that, but we were really early in a lot of things, and yet we're lagging in giving.

Unfortunately, giving is on decline in general. And I don't like to talk too much about it because that'll push people towards the norm of giving being seeing something that "other people don't do", but the fact of the matter is the more we don't talk about giving, the more we focus on our own selfish needs.

25:40 - Money and happiness

Luke Freeman: Unfortunately, we're focusing on thinking that spending money on "that next nice thing" will make us happy when all the data shows that prosocial spending has the highest return on investment once you're kind of middle income. Spending money on others, whether it'd be people around you or you're giving to charity, is the best value for your dollar if you're talking ...

Josh Ross: So, do you mean in terms of your own happiness? So, once you've got your hierarchy of needs covered, it's more fun than another five-star holiday, you're saying. If you can save three people's lives, that's going to give you more happiness instead. That's interesting, yeah.

Luke Freeman: And it's to the point where it's logarithmic. So ...

Josh Ross: How do they work that out like what's the ...Not to sound sceptical, and I hope it's true, but, yeah, how concrete is it?

Luke Freeman: One is that they do a sampling of experience, and another is self-reported. There's the spending side of the research, and then on the other side, there is the income side of the research. I'm not aware of one study which looks directly at income after charitable giving, but income has really diminishing returns on happiness.

In fact, beyond a point, people's happiness only continues to go up if they value money itself. So, if you say money is important to you and your happiness goes up with income, and it's correlated, but even then, it's correlated to fractions of a percent. And it's a logarithmic scale. So, if you're earning $100,000, you would need to earn $200,000 to get the same benefit as someone going from $10,000 to $20,000. So, you going from $100,000 to $200,000 could fund ten people going from $10,000 to $20,000 and getting the same difference in happiness. So, you can literally get ten times as much happiness in the universe if you give it to someone earning one-tenth the amount. You get a hundred times as much happiness in the universe if you give it to people earning a 100th of the amount. And that's kind of the logarithmic side. So it's just an incredible wealth that we live in.

Josh Ross: Yeah, it makes sense. If you can go from one meal to three meals with one step up in your income, that's a lot of it. That's more than a doubling of your happiness, I imagine.

Luke Freeman: Yeah. Whereas you think about the marginal kind of value that you get from things. So, if you go from having no mattress to one mattress, that's amazing. If you go from having one mattress to two, what do you do with the second mattress? You maybe get like a nicer mattress, and then eventually, you just taper off.

Josh Ross: Yeah. No, it's actually quite intuitive when you think of it like that. Once you're going from 100 million to 200 million, it's not going to make a difference to what you do tomorrow. Oh, that's amazing.

28:45 - Conclusion

Josh Ross: Well, thank you. Thanks, Luke. That's been a really interesting conversation, and I wish you the best of Giving What We Can and I hope some people listening to this are inspired to go to your site and learn a bit more about the world of giving because it's just damn interesting even if you're not going to change your own behaviour. That's totally fine. Yeah, thank you so much.

Luke Freeman: Yeah, thank you. Really appreciate you having me and love the work that Humanitix is doing as well. I really love how you're using the same lens that we have is how important leverage is. And if you can get multiple times your money and have a much bigger impact than you would otherwise, you're really onto something. And so, yeah, I really appreciate you having me on.