Rethinking Charitable Donations

For approximately $40,000, Guide Dogs of America can train and provide a seeing eye dog to the visually impaired. Upon visiting their program’s website, a large “Donate” button appears beside a picture of fluffy labrador puppies in the arms of smiling volunteers.

For $25, the Carter Center’s Trachoma Control program can cure someone in the developing world of sight-destroying trachoma [1].

Donating to charity is a universally lauded act. We view donations as altruism that betters the lives of those facing illness, poverty, lack of education, and other debilitations. If one were to fund the training of a seeing-eye dog through Guide Dogs of America, the donor would be commended for their generosity. However, as a result of this automatic commendation of benefactors, the recipients of those donations receive less scrutiny. The generous intent behind a charitable donation can block what actually happens with our money from factoring into when, where, and why we donate. As a result, we often fail to do the research that tells us the money used to train a guide eye dog could cure 1,600 people of blindness.

In deciding where to donate, the efficiency of the charities we give to needs to be one of the biggest, if not the biggest, factors in our decision. Some charities fight their cause far more effectively than others; they give you more “bang for your buck” in terms of the amount of good they do with your money, which means numerous lives can hinge upon our decisions of where to direct our altruism. Two organizations, Effective Altruism (EA) and GiveWell, have established a new science of giving and identified the world’s most effective charities in the process. These organizations allow us to quantify how much good we do when we donate to specific charities and to make more informed decisions with our money.  

EA, a movement of thought and activists dedicated to using rationality, evidence, and analysis to do the most good with our resources, has championed the concept of a quality-adjusted life-year (QALY, pronounced ‘kwalee’). QALYs measure the burden of specific diseases on individuals and exemplify EA’s scientific approach toward global problem solving. (“Burden” in this context simply refers to how bad life is with a certain disease.) The idea behind a QALY is that one can give health benefit to people in need in two ways: by extending their life and by improving the quality of their life. As Will MacAskill, the co-founder of the EA movement, writes in his book Doing Good Better, “The QALY combines these two benefits into one metric, using survey data about the trade-offs people are willing to make in order to assess how bad different sorts of illnesses or disabilities are.” For example, MacAskill notes that, on average, people with blindness rate life as 40 percent as good as life at full health. To give eyesight to people at the age of 40 who are perfectly healthy except for blindness would bring their quality of life up to 100 percent until they died. If they were going to live to the age of 80, then curing them would amount to .6 x 40 years = 24 QALYs [1].  

A wealth of data exists about the burden of different diseases, and good charities perform studies to figure out the health benefit of their programs and treatment. One can see how, in looking at QALYs, we can direct our money towards treatments and charities that will make the greatest impact.

There are certainly flaws in the QALY methodology. People may rate disease burdens differently, both in their unique experiences of the diseases and in their subjective perceptions of healthy life. Healthy individuals also estimate that the negative impact on their lives of a sickness would be more severe than those with the sickness report. However, when QALY research is used to analyze charity effectiveness, these flaws become less significant. “[P]rogrammes differ dramatically in how great an impact they have, so even a rough idea of how many people are affected, and by how much, is often enough to show that one programme has a much larger impact than another,” writes MacAskill.

The thought of quantifying human life can make one squirm. We cannot treat our all-encompassing, subjective experiences of the world as mathematical maximization problems. But with accurate data, the QALY methodology works, and we can use this cold, objective line of thinking to preserve as much as of the wonderful, subjective experience of life as we can.

One source of this data is GiveWell, a nonprofit charity evaluator influenced by EA principles. GiveWell has performed and funded thousands of hours of research on the health impacts of different aid programs. They yearly establish a list of top charities they recommend donating to, and last year, over $110 million was donated to these charities. The Boston Globe considers GiveWell the “gold standard in giving.”

GiveWell recommends charities using four criteria: cost-effectiveness, evidence, room for more funding, and transparency. Cost-effectiveness essentially analyzes the dollar amount per QALY at each charity. The evidence criterion looks at the amount of research that has been done on the program or programs implemented by a charity. GiveWell searches for charities “implementing programs that have been studied rigorously and ideally repeatedly, and whose benefits we can reasonably expect to generalize to large populations.” In its search for charities that thoroughly monitor and study their programs, and in digging through that research, GiveWell has found that charities targeting those poor by global standards rather than American standards provide better evidence in terms of quality, robustness, and generalizability and are superior in cost-effectiveness. Since the poor in the U.S. are wealthy by global standards, our money can do a lot more abroad than it can at home.

GiveWell also asserts that transparency and room for more funding are crucial to an effective charity. A scandal involving four cancer charities in 2015 demonstrates the importance of these criteria. These charities–the Cancer Fund of America, the Breast Cancer Society, the Children’s Cancer Fund of America, and the Cancer Support Services–were run by extended members of the same family and conned people out of $187 million from 2008-2012 that was used for personal luxuries. When CNN, reporting on the story in 2013, attempted to speak with the charities about their practices, all declined to comment and ordered reporters out of their buildings. Most people, before donating to those four charities, likely thought about the cause—cancer—more than the effectiveness, transparency, and room for more funding of those charities. The same goes for those who would donate to Guide Dogs of America before the Carter Center’s Trachoma control program. In thinking about donating to charities, we need to take into account GiveWell’s criteria and research, such as what will be done with our money at a charity, rather than just focus on its cause.

GiveWell recommends four charities above all else: the Against Malaria Foundation (AMF), which distributes antimalarial bed nets to communities in Africa; the Schistosomiasis Control Initiative (SCI), which works to scale up Schistosomiasis and soil-transmitted helminthiasis(STH) deworming programs in Sub-Saharan Africa; Deworm the World, which advocates for, supports, and evaluates government deworming programs in schools; and GiveDirectly, which provides direct cash transfers to extremely low income families in developing countries through phone-linked payment services.

The impacts of these charities are staggering. AMF, GiveWell’s overall top charity, is estimated to save one life per $3,500. And deworming programs, on top of preventing illness and death, keep children in school. Say one wanted to increase children’s school attendance in Kenya. One might think to provide them with more textbooks, to give out free school uniforms, or provide more merit scholarships. It turns out that simple deworming programs are over ten times as effective as any of these ideas. This conclusion could not have been reached without making a point to acquire evidence on the impact of these interventions. If anything, the idea of treating charities as a science–the idea of testing certain programs and gathering data on them to determine their effectiveness–is perhaps the most important change Effective Altruism and GiveWell have brought to the world of giving.

 

ourtesy of Julia Wise, using data from the Jamal Poverty Action Lab at MIT

Courtesy of Julia Wise, using data from the Jamal Poverty Action Lab at MIT

My goal here is not necessarily to say that we should donate using purely utilitarian principles. While Effective Altruists want to maximize the amount of good we do with our money, I am not saying that we should donate only to produce the most QALYs. Rather, I hope that we can start thinking more deeply about the charities we donate to before giving them our money. We now have the means to differentiate effective charities from ineffective ones, to know exactly what will be done with our money at some charities and to know which charities won’t tell us that information. Because there are extremely effective charities like AMF and SCI, we have the potential to make a huge impact even with small amounts of money, so if we choose to neglect those programs it should at least be the result of a well thought-out, researched decision. However, if the utilitarian philosophy behind donating to a charity like AMF does not make you squirm, or if you agree that the utilitarian action is the right action, then the charities discussed above should be the targets of any charity you perform.

Julia Wise, who has been a part of the EA movement since it began, holds such beliefs. She and her husband donate 50 percent of their income every year to charity, and for the past few years they have donated to AMF. Ms. Wise also believes that at a basic level we should be more studious in donating to charities. In a phone interview, she compared donating to charity to buying something valuable, like a phone. “If you were buying a phone, you would want to scope out what features it had an what its various costs were and what you were getting for your money,” she said. “There’s no reason we should be less careful about donating to charity. Effective Altruism gives us the tools to get the most from our money when we’re giving”.

One implication of the effective altruist principles and GiveWell criteria that have been discussed here is that we should donate to effective charities instead of causes with which we have a personal connection. This is another aspect of calculated giving that makes people uncomfortable, but Ms. Wise’s thinking about donating to whichever charity does the most good shows that such giving is not stripped of sentiment. She stated, “We need to look at why it sucks to have Parkinson’s or breast cancer or any other kind of problem that people feel a specific connection to: basically, it just sucks to be sick, and it sucks to have a loved one be sick.” Ms. Wise explained that in the United States, we are more likely to know people who survive long enough to have debilitating illnesses such as ALS, Parkinson’s, and cancer, whereas elsewhere in the world other health problems such as malaria and schistosomiasis are more common. “The key similarity,” she continued, “is not what the actual disease is but that fact that it sucks to be sick. I think the focus on that shared humanityon the fact that no one wants to see their mother get sick and that everyone wants to help in such a situationis what matters. It doesn’t actually matter what the disease is.”

We may only be college students, but we take part in many forms of philanthropy on this campus. We will soon be adults and giving individually. We can and should donate our money to those that need it most, and at a minimum, we can all develop a habit now of making informed decisions with the money we donate to charity.



Alex Buckley is a freshman from the San Francisco Bay Area. He can be reached at arbuckley@wustl.edu


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