Why should we donate to the most effective charities?
Imagine you're buying canned tomatoes. Side by side are two different brands. You inspect the labels and notice that they are virtually identical — the only real difference between them is the cost. One brand costs $2 and the other costs a whopping $20.
Which one would you buy?
I'm not a mind reader, but I'm pretty confident that you'd buy the better value brand, saving your extra $18 for later.
While that kind of price difference for the same outcome is rare in a supermarket, it’s surprisingly common in charity. Research shows that how much ‘good’ your donation can do varies hugely depending on where you give — sometimes by a factor of 10, 100, or even more.
Considering both cost and outcome is the heart of giving effectively — asking, “Where can this money do the most good?”
In this article, we cover some of the reasons why giving effectively matters.
1. We want to do good, not harm
In the year 2000, a nonprofit organisation named PlayPumps won the World Bank's Development Marketplace Award. Their signature product was a small merry-go-round designed to replace hand pumps with water pumps powered by kids having fun.
PlayPumps were praised by the likes of Bill Clinton, Jay-Z, and First Lady Laura Bush. By 2009, there were 1,800 PlayPumps installed across South Africa, Mozambique, Swaziland, and Zambia. PlayPumps raised a tonne of cash and were considered a success by the media.
There was just one problem: the pumps didn't really work. In fact, PlayPumps were doing more harm than good.
PlayPumps turned out to be a dangerous, ineffective, and expensive alternative to a traditional hand pump — inferior in almost every possible way. Kids injured themselves, vomited from the spinning, and frankly didn't want to play with them, which meant the task fell to the local women. To add insult to injury, the hand pumps were a fraction of the cost and pumped five times more water!
This cautionary tale of charity ineffectiveness highlights why assessing the effectiveness of any charitable initiative is essential, even if only to make sure that we are not causing any harm to those we intended to help.
2. We have limited resources
There are thousands of things worth fixing in the world. But our time, energy, and money are finite.
Because we have limited resources, the scale of the things we care about (the things we desire to change) will typically be much larger than the scale of what we actually can change.
It makes sense, then, to try to put those limited resources towards the places where they can have the most impact. That's how we do more to fix what needs fixing.
3. Charity effectiveness varies significantly
We saw with the PlayPumps example that some charities can do harm.
But even those that do good vary significantly in how much good they do for your dollar.
For example, around $15 could provide safe water for a year for ten children living in a place where waterborne illnesses contribute to disease and death, or it could provide 1 toy to one child during the holidays.
These huge differences in effectiveness provide us with an opportunity to do much more good with our charitable donation if — rather than simply choosing the charities we are familiar with, or the ones that are most convenient, we choose charities more strategically.
4. Charity is about helping others
Is charity more about yourself or more about helping others?
It may seem obvious, but when we look at donor behaviour, it’s really not. A lot of giving goes towards things that “feel” good to donate to, like supporting the places that helped us: our school, our church, our local museum.
Donating in this way is sort of like “paying” for the services we receive, or "giving back."
There's nothing wrong with "giving back" — on the contrary, it's admirable. But arguably, it's also not true charity.
This is because there's a difference between reciprocity (when we support something because we previously benefited from it) and altruism (when we support something because it helps others.) And when we prioritise the latter, we may make different decisions.
Imagine a burning building. Inside is a beautiful collection of books and a child. Even though the books would certainly bring joy to those who read them, most people would certainly get the child out first.
Again, this isn’t to say that we should never support institutions like universities and museums. It’s natural to care about a variety of things, and these can all be elements of living a good life.
But allocating at least some of your resources to supporting particularly effective charities —those that are helping people and animals in dire need — can help you help more, while still leaving space to pursue other values.
Because after all, charity is first and foremost not about reciprocity, but about true altruism.
5. We care about effectiveness elsewhere
Many of us will spend hours researching relatively small purchases like headphones in an attempt to get the most bang for our buck.
So why don’t we apply that same rigor to our charitable giving? After all, the stakes are incredibly high.
Around 14,000 children die every day from diseases we already know how to prevent — the same diseases that no longer kill children in wealthier countries. There are organisations delivering simple, proven solutions to stop these deaths in poorer countries. But they don’t have enough funding.
This means that every day, the number of children who die from preventable causes is equivalent to more than 20 jumbo jets full of children crashing — with no survivors.
So let's approach our donation decisions with the same (or more) rigor as we might for everyday purchases.
Because in the end, there's a strong case that they matter even more.
6. Where we spend our money shows us what we value
Let’s say someone spends $400 on a new TV instead of a new mattress. Whether they realise it or not, they’re saying: "Right now, sharper picture quality matters more to me than better sleep."
Translated to charitable giving, if we donate $400 to rescue a cat from a shelter instead of using it to transition, in expectation, 4,000+ chickens to cage-free conditions, we are showing that we value rescuing cats around 4,000 times more than reducing the suffering of chickens.
Now we make these types of value judgments all the time. But most of us don’t realise it. Effective giving brings those judgements into the open, so we can make them more consciously — and as a result, make better decisions.
Of course, the numbers are not always crystal clear, and there is room for reasonable disagreement about how to weigh different moral outcomes. But the first step in aligning our actions with our values is to make our decisions more intentionally — shining a light on our implicit judgments so we can be sure we’re happy with them.
7. Supporting effective charities creates a virtuous cycle
How we choose charities can have very long-run effects on what they are incentivised to do. Just like with other purchases, we are essentially voting with our dollars.
If we reward expensive marketing campaigns or flashy but ultimately ineffective ideas, then we'll get more of those charities, and less actual progress.
If instead, more donors select charities based on their effectiveness, then this increases demand for more effective charities and for better information and accountability about charity effectiveness
So giving effectively isn’t just about one smart donation. Or even lots of smart donations. It’s about helping shift the entire sector toward better outcomes.
You’re not just giving; you're setting an example. And that example can change what the world prioritizes.