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Giving What We Can: Maximizing the impact of donations

   /   Dec 20th, 2010Finance, International, Interviews

In the giving season, choosing where to donate can be difficult; the staggering number of important organization and causes is overwhelming, and where you put your money is as important as how much you give.  Giving What We Can keeps careful tabs on which organizations have the biggest impact. Its members try to maximize both the amount of money they give and the effect that money has in the world. Giving What We Can members pledge to give 10 percent of their income every year over the course of their lifetimes, with the hope that those funds can make a huge difference if they are put in the right hands. We spoke with Nick Beckstead of Giving What We Can about how to get the biggest bang out of your donated buck.

Dowser: Does giving money really make a difference? What if you don’t have much to give?

Beckstead: There is hard evidence that giving to certain organizations can make a massive impact, even for relatively small amounts of money. For example, Stop TB Partnership, one of our recommended charities, implements a cheap and effective treatment for tuberculosis, called DOTS. According to the Disease Control Priorities Project, it costs between $150 and $750 to save someone’s life. This estimate has been arrived at through randomized controlled trials and cost-benefit analysis. We absolutely know that this kind of intervention works.

At this price, even for those that don’t have much to give, it is possible to save a life. If they decide to give 10 percent, even those with a modest income could save hundreds of lives over their careers.

For those that have less to give, we should note that another one of our organizations, Deworm the World, can make significant impacts for even smaller sums of money. For about 50 cents, you can treat a child for parasitic worms. A teacher can administer this highly inexpensive medicine once or twice a year. A study at MIT confirmed that for about $3.50, you can get an extra year of school participation using this kind of treatment, due to days of school that would have been missed due to illness. Deworm the World provides technical assistance to governments in Kenya and India that are scaling up programs like this.

One thing that often holds people back from giving is a feeling that their dollar won’t make a difference. Does every dollar help? Or does it all depend on the charity?

This is an area where good intentions are not enough. It is absolutely critical that we fund the very best organizations. Most social programs and services don’t get carefully evaluated. And those that do get evaluated are often found not to work. According to David Anderson, assistant director at the Institute for Evidence-based Policy, about 75 percent of social programs and services that have been evaluated turn out to produce either weak or limited beneficial effects.

Among the interventions that actually work, there is still great variability in cost effectiveness. For example, the Disease Control Priorities Project studied over 100 medical interventions targeted at people in the developing world. The very best organizations proved to be more than 100 times more effective than typical ones, in terms of quality-adjusted life-years saved per $1,000.

Fortunately, we can identify some of the very best organizations out there, and we can be confident that they are using our donations on programs that work as effectively as possible. Donors can visit our website for more information about our recommended organizations.

Elaborate on the research you’ve done into which organizations are the most effective financially.
Much of our research focuses on medical and public health charities. In that case, we look at how many people a health intervention can affect for a given amount of money, and how large of an effect is provided. Following a common practice in public health, we seek to fund the interventions that provide the most quality-adjusted life-years for a fixed sum of money. Then, we find organizations that focus exclusively, or nearly exclusively, on those interventions, operate transparently and efficiently, and have room for additional funding.

What are some things that people should think about before making a donation?

People who give a significant amount of money should approach the question of where to give with the same level of care and diligence that they use to make other important financial decisions, such as what car to buy, which house to buy, or what assets to invest in. Interested donors can find some of the best organizations by visiting our website or the websites of other organizations that evaluate charity effectiveness, such as www.givewell.org.

How much say do
Giving What We Can members have in which organizations to donate to?
Our members pledge to give 10 percent to the organizations that they believe best help those suffering from poverty in the developing world. Giving What We Can does not collect any money from its members. Though we offer recommendations about where to give, it is up to our members to decide where they think their donations can do the most good.

Apart from our recommendations, we don’t really make many decisions on behalf of our members. However, we do have an online forum where our members frequently make recommendations about further research and outreach programs.

You have about 64 members now. What are your plans for expanding?

Giving What We Can is looking at starting chapters in Canberra, London, and Princeton. In our first year, we grew from 24 people to 64. We’d like to see that kind of growth next year as well.

Giving What We Can is also part of a larger movement that promotes effective giving. Organizations like GiveWell, The Life You Can Save, and Poverty Action Lab are also spreading some similar ideas how to give effectively and why it matters.

Why did you get involved?
The basic message of Giving What We Can really resonates with me: Each of us can make a massive difference in the lives of many people by directing 10 percent of our income to the most effective organizations out there. Over my lifetime, I expect to improve and save hundreds of lives through wisely-chosen donations. And I don’t really feel like I’ll be missing out on anything. People have many regrets in life, like failing to mend relationships with family and friends, or not accomplishing what they hoped. But you won’t find anyone on their deathbed that regrets giving 10 percent to help the people who needed it most.

This interview has been edited and condensed.

2 Responses

  1. Geri Stengel says:

    Raising awareness about the effectiveness of even small donations and making people think about just how much they can really give is admirable. I applaud Giving What We Can for giving guidance, encouragement, and a push to individual giving. As their site points out, we spend an atrocious amount for non-essentials that could provide what others need to live.

  2. Piadas says:

    This is something we have to learn from Americans. In Brazil, people are not aware of the importance of giving opportunities to others by donating a small portion of your assets.

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