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Is Giving to Charities a Waste of Money? Easy Steps to Effective Altruism

Is Giving to Charities a Waste of Money? Easy Steps to Effective Altruism

According to statistics, American people spend 117 billion dollars per year on fast food and Europeans spend 50 billion dollars per year on cigarettes, but 38 billion dollars per year would be enough to provide for global basic education, healthcare and sanitation. What’s more, as 800 million people worldwide suffer from hunger, the amount of food we squander every year – 2.9 trillion pounds – would be twice the amount needed to save these people from famine. If we, relatively privileged citizens of developed countries, can afford to throw away food or spend money on things that are unnecessary or even unhealthy (fast food, cigarettes) maybe it’s high time to reconsider our priorities and wonder whether we can do something for people who are less fortunate than we are. But if we decide to spend our money on charities, what initiative should we choose to support? Among the variety of different organizations, there are some that try to bring new standards to philanthropy – to make helping more effective and the benefactors more aware and emotionally involved.    


Effective Altruism

An effective altruist knows that he or she can help more by applying an objective and rational approach to his or her actions. If we want to be effective in our helping, we should consider all causes and actions first and then decide what choices would bring the most good to the world.

GiveWell, one of the organizations belonging to the EA movement, provides us with a list of top charities they recommend supporting (Against Malaria Foundation, Schistosiomasis Control Initiative, Deworm the World Initiative and GiveDirectly) along with a few standout organizations. Their selection of charities is based on four factors: evidence, cost-effectiveness, room for more funding and transparency. Similar methods are applied more or less rigorously by Giving What We Can and The Life You Can Save. This last one offers us an Impact Calculator: we enter the sum of money that we’d like to pay, choose the cause that we want to support and we get information on what can be done with our donation, for instance how many bednets can be provided to protect people from mosquitos that are potentially spreading malaria.

Of course, there are pros and cons of this effective approach to helping. For me, the most important advantages of EA are the following:

  • We know what’s happening with our donation. EA supports the charities that are effective and transparent so first we know what our money is spent on and second we know whether it’s spent according to our expectations and values.

  • We know if our donation contributes to making a real difference. EA is focused on the variety of effects and raises awareness of the whole complexity of helping – whether our actions in fact significantly improve a large number of lives and lead to drastic measurable differences or rather make no change at all. That’s why most EA supporters recommend the charities that are helping the developing and not the developed countries as poverty is more extreme there, and actions are more effective.  

  • We know that our donation serves for global help. As it promotes utilitarianism, EA positively changes our approach to morality, making us more concerned not only about people who live nearby but also about everyone regardless of the racial, cultural and ethnic differences or geographical distance.

Of course, if we don’t consider efficiency and rational consideration as the main criteria for what kind of charity we’re going to support, some of the main assets of EA may become its greatest disadvantages. For instance, if someone helps just based on emotion, he or she would prefer to donate to charities that support causes close to his or her heart regardless of their efficiency.   

Giving and lending directly

Some initiatives aren’t focused on solving particular problems (such as malaria), but their aim is to provide money for people in need by just sending it directly from donors to donees or by giving loans. The first type of organizations providing this kind of help are non-profit. An example is GiveDirectly. Through this organization, people can transfer money through mobile phones to people living in extreme poverty in Uganda and Kenya. In April 2016 in Kenya, GiveDirectly launched a new test program: providing at least 6,000 people with a universal basic income for 10 to 15 years (See more on basic income).  

Lilian and her family got support from Give Directly, img source: Give Directly on FB

The second type of direct help is provided by microfinance  - a movement to provide financial services such as credit or insurance to entrepreneurs lacking such benefits. In the case of microcredit, part of the microfinance movement, apart from independent banks providing this, there are many non-profit initiatives based on peer-to-peer lending over the Web. An example is Kiva, which works through organizations (called Field Partners) that help to find borrowers and administer loans. Via the Kiva website people lend money without interest to a particular person. Of course, we must be aware that the effects of such direct giving or lending are hard to predict as they depend not only on the donees and their resourcefulness, but also on many other social and economical circumstances that determine the success and effective spending of your money.  

Social Entrepreneurship

Social enterprises are businesses that trade for social and environmental purposes. Income is important not as an end in itself but rather as a means to further work for social and environmental improvement. TheGivingMachine is an example of a social enterprise. This business converts your every online purchase sales commissions into a donation for the institution you choose to support. You can find out more about TheGivingMachine in Richard Morris's Givenomics. Another social entrepreneur is Leon Arts, whose initiative was that for every meal you buy in a restaurant, you add 20 pence to feed children. As he states in his book Feeding People, “There are three words which come back all the time in my opinion: give, share and connect. Every time you buy something for yourself, you share something with someone who is not as fortunate as you”.

Richard Morris - founder of Givenomics

There are great ways to help people in need, ways that don’t require a huge effort from us - as it is with volunteering - but only a little time spent on choosing wisely what initiative we would like to support. If we prefer safer solutions, we may decide on some charity recommended by the EA movement organizations. If we’d like to both buy and share, there are many social enterprises that enable it. And if we’re more convinced by giving or lending money directly to others, microfinance or charities such as GiveDirectly are the best options.

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