John Maxwell

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How can we get philanthropists to try harder to optimize the effectiveness of their giving?

You can see described in this article

an argument for "efficient" charitable giving--that is, charitable giving that attempts to optimize the effectiveness per dollar donated in terms of metrics like number of lives saved. But if you look at "largest charity" lists, you can see that much of charitable giving is directed towards organizations like the YMCA that don't directly work to save anyone's lives. I don't mean to dis the YMCA--I'm sure they're doing important and useful work, and anyone who volunteers there or donates to them is surely more virtuous than average. However, I don't quite understand why someone might give a thousand dollars to the YMCA when a thousand dollars has been shown by external observers to predictably save one West African life:

(And that's not even mentioning other charities, like, which are working to solve problems that could potentially lead to the extinction of the entire species.)

So what's going on here? How can we get philanthropists to realize that their giving is inefficient, and that they could get a better return on their dollar if they thought about it?

  • Nov 3 2011: I asked a very similar question myself. I'm looking at it from another perspective. I've got money to give, but I want to make sure that the money I give has an actual impact on the people to whom I give it. Frankly, I have a harder time tracking that the larger the charitable organization I support. I also have to weigh the value of doing something globally versus doing something locally. I can give $20 to a guy on the street in my hometown, or I can give $100 to a charity that would spend most of it on their own infrastructure and end up with $20 going to someone in Africa. Which was the better use of my money? Right now, I'm paying to put a kid through nursing school. Not through some charity, but actually writing a check to the school every semester, because I'm convinced that it's the best use for my charitable dollars. It'll change his life and the lives of his kids. But it's really, really hard to know the tradeoffs you're making when you donate.
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    Nov 3 2011: I think most phiilanthropists actually do try hard to optimize their effectiveness. They may simply have different values than many others. Many philanthropists are social darwinists or they are just there for the tax write offs or because it looks good on a CV. Take Carnegie and the Rockerfellers for example. Philanthropy is the vehicle to redeem a reputation.
    Please do not interpret this to mean that all philanthropists are jaded but it is a fact that some have very different agendas to the ones we might suppose.
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    Nov 3 2011: The linguistic derivation of philanthropist is lover of the human race. This selflessness is only one of the reasons why donors give money. A donor may identify personally with a particular cause. A corporate donor may see commercial advantage in being identified with a cause. A cynic (realist?) may consider it preferable to give £100 to a local cause run by volunteers knowing that £98 will end up providing real benefits, whereas £100 donated elsewhere might only result in £15 of real benefits once allowance is made for shrinkage due to administration and corruption.

    And perspectives vary. There may be people leading productive lives who, without access to YMCA accommodation, would have ended up on the streets, dying early from alcohol or drugs or severe weather. Some people value the rights of animals and choose to direct some or all of their giving to animal charities. Is that wrong? Others donate to support education, or the arts, or conservation of the environment, or preservation of historical artifacts. Is that a bad thing?

    Looking at the issue more broadly, if someone contributes to the strength of ther own society, isn't it likely that the strength of that society will give more people the money and leisure to donate to a weaker society?
  • Nov 3 2011: I think the "close to home" argument is a good one. People see the problem directly, and see how their donations help. We all have a connection with those around us. It's a powerful motivator.

    There is also the more esoteric argument of priorities. For me, eradicating polio may appear to be a better gift than a direct food donation. Someone else may see education, or cancer research, or clean water. They all have their place.

  • Nov 3 2011: Well I think the majority of this is that people are not donating for the same reasons as you would. They probably just think to themselves "hey I'd like to support the YMCA because I went there as a kid and it was fun", so they send them some money. Also it's closer to home so if they're going to donate somewhere they'll donate near to where they live or for some purpose that might possibly affect their life.

    We also have to ask though, is it the rational choice in the long term to save lives in a place swamped by disease, malnourishment, and so on, where that life will probably be short and unpleasant and not result in any lasting change, versus contributing to say, renewable energy research that might in several decades have long term benefits for the whole continent and provide meaningful opportunities to everyone.

    Obviously we're looking at this from the clouds, and it really is not a good position to be in to place value on this human life or that human life, but if we're trying to maximize long term benefit for the dollar it's something that should be considered.