One of my leaving gifts from Monzo was a book called Doing Good Better, written by Will Macaskill, an associate professor at Oxford. The book explores how we can have the most social impact possible with our money, time and resources. This is the essence of a relatively new movement called Effective Altruism.
Coincidentally, a number of friends recommended I look into Effective Altruism as part of my journey, so this book seemed like a great starting point. I’ve been slowly consuming it over the past few weeks and it’s really started to shape my thinking …
The core message I took from the book is how far our money can go to help other people. The average salary in the UK is around £25,000. Studies have shown that if we double our salary, our happiness increases by about 10%. Other studies have shown that if you give about £2,500 to a charity like Against Malaria Foundation, you’ll save an entire human life. Have you ever saved someone’s life before? You could for £2,500. Essentially this means our money will go at least a hundred times further by helping the poor instead of ourselves.
100x is a big multiplier! This speaks to how extreme poverty is for the billion poorest people compared to the wealth we experience in the UK. You may not feel rich, but if you’re reading this, you’re probably in the top 1% of the wealthiest people on the planet (you’d need to earn £34,000 / year to qualify). The poorest billion people earn less than £1.20 / day. That’s 15 times the population of the UK, each living on less than £700 / year.
Extreme poverty is actually more extreme than we can imagine living here in the UK. Let’s consider sweatshops. These are factories in developing countries whose employees work 16-hour days with no air conditioning and sometimes no meal or toilet breaks. Terrible conditions. But almost all workers choose to work there. Some even go to great lengths to do so, such as emigrating from another country. Why!? Because the alternatives are worse, such as back-breaking lower-paid farm labour in the sun.
Which charity should I give to?
Like me, you probably want to make a difference, but how can we best do that? Here are the four questions we should ask when giving money to charity:
1. What does the charity do?
Do you ever go into a shop, hand over some money but not know what you’re getting? Yet that’s what we do if we give to a charity without knowing what they do. Sometimes when I pay for petrol, the credit card terminal asks if I want to donate 25p to charity. It’s impossible to know what impact this will have, so why would I do this? In general, it’s really hard to understand what the bigger charities do (as they do so many things), so it is much harder to understand the impact your money would have if you gave to them.
2. How much impact do the charity’s programmes have per pound spent?
What is the measurable impact on people’s wellbeing that has resulted from the charity’s activities?
Let’s take education as an example. You might expect that buying additional textbooks would improve education. Or providing additional teachers (to reduce class sizes). But trials conducted by Michael Kremer, a professor at MIT, found very little impact. The activities that have demonstrated some positive impact on education (measured by school attendance) were cash transfers to students, merit scholarships, free uniforms and deworming programmes. But even within these impactful activities, deworming programmes proved to be about twenty times more effective per pound spent compared to the next most impactful activity (free uniforms).
3. How robust is the evidence to support this?
Is this evidenced through randomised controlled trials that have been independently verified?
If so, we can be really confident that giving money to this charity would have the stated impact. If not, we should ask what evidence exists. At the very least, do we have some data to suggest an improvement in the wellbeing of those the program is meant to help?
The author, Will, gives a stark example where this was done badly. PlayPumps was a novel concept, invented by Trevor Field in the last 90s. Their aim was to improve water pumping in developing countries. PlayPumps are roundabouts for children to play on, which pumped water as it rotated. The concept resonated with the international development community and they raised millions of dollars and installed thousands of PlayPumps. But no-one had taken the time to evaluate the practicalities and impact on the people they were supposed to help. Most roundabouts spin freely, but in order to pump water, PlayPumps needed constant force and children quickly became exhausted. This meant that the women in communities had to rotate the PlayPumps to pump water, which was a lot more work than normal hand pumps. They also cost four times as much as a hand pump.
This reminds me of one of the key mantras in Silicon Valley – focus on the user. It’s really important to continuously ask and measure what the social impact of a given initiative is on the people and communities it is supposed to be helping.
4. Does the charity need additional funds?
What would the charity use additional funding for?
For example, disaster relief is generally well-funded because of the media attention it gets and our emotional response to an emergency. Cancer treatment is also well-funded because it is close to home and affects many of us personally.
Malaria, by contrast, is poorly funded. It is really cheap to prevent and treat, which is why we don’t suffer from it in developed countries and probably why we don’t feel connected to it as an issue. Yet, a pound given to fight malaria will probably have a much bigger impact on someone’s life than a pound given to disaster relief or cancer treatment.
So, which charity should I give to!?
Give Well is a non-profit that deeply researches charities to determine the most impactful giving opportunities. They use a similar methodology as outlined above. Their website shows their top-rated charities, all their research that supports each one and offers a way to donate to them.
Having an impact beyond giving
Will also discusses similar approaches to having an impact beyond giving money. For example, your career, volunteering and choices you have as a consumer.
He shares an interesting example about Fairtrade and how the social impact of buying Fairtrade products is dubious. Here are three reasons:
- Only a very small portion of the money spent on Fairtrade ends up in the hands of the farmers who it is supposed to help.
- It is costly for a business to meet Fairtrade standards. This means that businesses in the poorest countries can’t typically afford to get certified. This is why most of the Fairtrade coffee comes from countries like Mexico and Costa Rica, which are ten times richer than the poorest countries like Ethiopia.
- Buying Fairtrade is usually more costly for the consumer. So if instead you buy non-Fairtrade products and give the difference to a high-impact charity, you’ll probably make a much bigger difference.
One positive example I’ll leave with you – did you know that you can fully offset your carbon emissions by giving about £3 / month to Cool Earth!? 🙂
Applying effective altruism to my journey …
Effective Altruism resonates with me. I like the focus on measurable social impact and the questions it asks. I’ll immerse myself a little more by reading the complementary 80,000 hours careers guide, engaging in the Effective Altruism Entrepreneurship Facebook group and hopefully attending the Effective Altruism Global conference in London in October. I may even complete the Effective Altruism Coursera course.
I don’t think it’s perfect though. It feels very individualistic, focused on what I can do to have the biggest social impact rather than on what part I can play as a wider group of people with a big mission. The approach lends itself to organisations with single programmes that tackle one specific issue, rather than organisations that take a more holistic approach to helping people. I feel it also lacks emotion. For me, making a difference to people’s lives needs to come from a heart of love – that’s the driving force behind my motivation and without love, it lacks meaning. I suspect this is true for many other people too.
But what if we can find a way to tie emotion more tightly into the Effective Altruism approach? An easy way for people to give money to the most impactful charities, but also experience the impact they are having and the lives they are changing?
I may explore creating an app that helps people give to the top-rated Give Well charities in an accessible way. Let people track the impact they have over time. Some kind of gamified giving experience.
Well, those are my thoughts so far – let’s see where this road leads …