Read Giving What We Can, and in particular Toby Ord’s latest media feature in this article, ‘Putting Charities to the test’ by Tina Rosenberg of the New York Times. Rosenberg illustrates Toby’s convincing case for the fact that, at the festive time of year where many charities receive the majority of their donations, considering the effectiveness of your donations could be more important than any other time.

She goes on to discuss the evaluation tactics of GiveWell and Giving What We Can, before pointing out some of the challenges that face the sentiment that cost-effectiveness should be the decision-making factor when considering which charity to give to. The article concludes with a message we all want made clear that the solution to the problem of complicit charities is to be an educated donor, and demand evidence that our charities of choice are spending their donations as they should.

“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… 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… 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.

“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).
  • 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.”

Givewell “will always choose charities that work in the poorest places, as money goes further there. A tiny amount can do a lot (try getting eye surgery for $25 in the United States) and basic interventions are still desperately needed. “Nobody in the West needs a bed net,” notes Berger. “We’ve eradicated malaria. But a lot of problems we’ve solved continue to exist in other places.”

Rosenberg points out the downsides of basing our charitable decisions solely on cost-effectiveness:

“Following the numbers, however, is not always wise. The numbers measure service delivery, but charities sometimes do very useful things the numbers can’t capture. Partners in Health, for example, piloted the use of accompagnateurs in Haiti — community members hired to help people on AIDS therapy to take their medicines. That system is now being used all over the world, producing value that goes far beyond its measurable impact on the Haitian patients.”

She also brings up factors that might affect these decisions other than effectiveness:

“Even if you define effectiveness very broadly, it’s far from the only consideration in choosing a charity. “People care about what they care about,” said Katherina Rosqueta, the executive director of the Center for High-Impact Philanthropy at the University of Pennsylvania, which helps philanthropists make more effective donations. “If someone cares deeply about closing the achievement gap in the U.S., they won’t be convinced to finance health care in the third world. It would be foolish to think that the only way a donor can do good is to go to the top-ranked, most efficient nonprofits.””

The parting words put at least the above concern into perspective:

“When we do give completely altruistically, we often give nearby — to our local soup kitchens or to help the victims of disasters like Hurricane Sandy. It is normal to value what happens near us more than what happens across the world. But Ord has an interesting response: how much more value do we put on a neighbor’s life than that of someone in Kenya or India? Is it worth 10 times more? Twenty? It’s surely not worth 1,000 times more — so put your money into bed nets.

“Charities are often complicit — they will sometimes choose ineffective strategies like canned food drives because they are more attractive to donors. The solution is to be an educated donor. Charities now publish the percentage of donations they spend on fulfilling their mission. We should demand evidence that they’re spending it right.”