What is the most efficient way to give to charity?
[ol]
[li]Assume good faith here: the homeless guy isn’t going to buy crack; the executive director of the Philanthropic Counsel to Make Things Nicer isn’t going to run off to Bermuda.[/li][li]“Give more” isn’t a useful answer. The point is not to maximize overall utility, but to achieve the most with each dollar.[/li][li]That said, I recognize answers don’t necessarily scale, the $5 answer might not be the same as the $20 or $1,000 answers.[/li][/ol]
I’m not looking for specific groups (or streets), though if it so happens that the head of the PCMTN is going to run off to Bermuda that’s not irrelevant.
I don’t think there are any factual answers to this one.
Moderator Action
This is going to be more of a matter of opinion than factual, so let’s move it over to IMHO.
Moving thread from General Questions to In My Humble Opinion.
If you want to maximize the utility of the money you donate, then giving it to causes in the third world is going to do more than giving it to causes here in the US. For example, giving a million dollars to Harvard University or the Metropolitan Museum of Art is worthwhile, but both groups are already wealthy. But your million dollars given to Oxfam could feed and educate many people. Here, for instance, is a list of charities suggested by a group led by Peter Singer that aim to help the world’s poorest. And here is a recent article from the New York Times on this issue.
Please remember that money is only one type of charitable donation. You need to match what you can donate(money and/or items and/or time) with what you want accomplished and on what scale. People need to fed, clothed, educated, and their rights need to be fought for all over the world. I think “Give globally, work locally” is a good rule of thumb-while deep down I know that charities like The Proven Impact Fund do good all over the world, there is something I get from working at my food pantry that I don’t get from mailing off a check(not that I don’t do both). The direct interaction with the clients as they wait for their turn to go downstairs to shop for(and sometimes with) their families is uplifting for both sides for the most part. In fact, I know of several clients that have gone on to volunteer both at my pantry and elsewhere, some of whom have done so while still homeless themselves.
Here’s a story to suggest the potential of a small donation. It’s admittedly an extraordinary story, but it’s a good one. And it’s true. A German Jewish girl was sent to Sweden to escape the Holocaust. Later, she became a school teacher. She sponsored the primary education of a boy from a Kenyan village for the sum of fifteen bucks a month. This is sort of like the child sponsorship charities today, except her money went directly to the support of one child. (And note that this was a few decades ago, so her contribution was worth a bit more than fifteen bucks today.) The woman’s name is or was Hilde Back and the boy’s name is Chris Mburu. Eventually the boy went to the University of Nairobi and then Harvard Law School. Today, he works for the United National Human Rights Commission. As I said, an extraordinary story, but it shows the potential of a small amount of money.
Your motives really do matter. Do you want to help homeless animals locally? If so, give your money to a local shelter. They are small, no overhead because they are all volunteers and the money will probably go to pay their very high vet bills.
If you want to feed local people, give that money to local food banks. They are also working because they want to make a difference, so all of your money will be spent on food.
National groups have a lot of overhead, but they can and do make a difference as well.
The blog GiveWell addresses this very question methodically. They discuss broad criteria and inspect various charities in detail. Part of their philosophy is to get the largest bang for the buck: they don’t like throwing money at broad causes. Others can do that.
The current top 3 choices are listed here. GiveDirectly directly transfers money to poor individuals in Kenya. Support for this group is guided by some empirical evidence which I have not evaluated. The Schistosomiasis Control Initiative fights parasite infections in sub-Saharan Africa. These infections damage childhood development and are shockingly inexpensive to treat. Deworm the World Initiative is another organization treating parasite infections.
GiveWell used to award a group that provided mosquito netting to fight malaria. It’s still a fine organization. But GiveWell has concluded that they’ve reached a point where they are having difficulty absorbing further resources, such that bang for each buck is diminished. I’m guessing that such activities are still way more effective than that supported by the average charitable dollar. I mention this to indicate the seriousness of GiveWell’s analysis. Here is an extended blog-post:
I’ve read about 4 paragraphs of it.
I’ve been wanting to explore GiveWell’s website in detail for several months. I believe it is worthy of study.
This. If you’re trying to decide whether to give food or an equivalent dollar figure, give the money. The food bank can pool cash donations and use it to buy food at bulk rates, meaning your dollar will buy them more cans of beans than if you (or some random homeless dude at the top of the highway exit ramp) used it to buy beans yourself at Kroger.
All organizations have overhead. Overhead is important. It costs money to turn the lights on. It costs money to hire a competent ED. It costs money to make people aware of your mission. It costs money to provide those services. Don’t use “overhead” like it’s a four-letter word. Find the organization that has a mission that you closely identify with, make sure that organization is using your donation responsibly, and make a connection with that organization*. Your dollar will be well-used - but the best way to help that organization out is to build a relationship with it, so that you can become an advocate for that cause, and ultimately multiply your donation through your network.
If you asked someone close to you that you trust, “what charities do you support?”, don’t you think you’d be more likely to lend them your support as well? Find something to be passionate about, and you’ll provide far more bang for your buck than you ever have before.
*You don’t need to become a volunteer, employee or board member or anything. But just following them on Twitter or Facebook, and paying attention to what they’re doing throughout the year can be enough in many cases.
The reason I don’t support organizations like The United Way is just that… Overhead. If you want your money to be effective, it can be frustrating to give your money to what is essentially a clearinghouse for other charities. United Way isn’t horribly bad, but it is a matter of scale. Approximately 10% of their donations go to Administrative costs. Other clearinghouse type places can be as bad as 40%. And then it’s kind of difficult to figure sometimes, because some money wasters can be classified as “programs”, and yet, they’re not benefiting anyone but ad agencies and professional fundraisers.
Pick a cause you want to support. Check Charity Navigator. Give money to organizations that do more than employ people to raise more funds, and certainly not places that do precious little more than “raise awareness” (Susan G Komen, I’m looking at you).
You should differentiate “overhead” from “administration”. Non-profits certainly do. The cost for our programs to turn the lights on is a programmatic expense. The cost for our ED to turn his lights on is an administrative cost. Both are overhead.