Why we should donate more and better

In a report by Geven in Nederland (Giving in the Netherlands) it was revealed that in 2015 only 0.7% of the gross national product was donated to charities. International charities received 0.12%. These numbers used to be 1% and 0.16% respectively, in 1999. An article in the NRC ascribes the decreasing donations to a diminishing popularity of religion and an increasingly secular society.

This is a shame. We have more than enough to live a comfortable and fulfilling life. Of course some people have it better than others, but even those with an average income belong to the top 2% in the world. For example, people earning minimum wage in the Netherlands belong to the richest 7% of the world. Moreover, past a certain point, we are not getting much happier with additional wealth, if we are to take Richard Easterlin seriously. An explanation for this is that we spend more and more money on things that make us happy in the short term but we quickly adapt to the new status quo. This is known as the hedonic treadmill.

There are many people in dire need of money for their basic needs. A euro in our wallet is worth a lot less than a euro in theirs. And yet we can become acustomed to spending large sums on trivial items with such ease, competely disregarding the sheer amount of good this could do if it were spent differently.

So why is it that we donate so little to international aid? There are many arguments aiming to justify our relative lack of donations, some more plausible than others. However, I believe overall many of them are not as strong as they may first appear. While in this article it will not be possible to summarize all arguments that have been made to justify not donating, I hope the most convincing ones are there.

I argue that people with a high income and a comfortable life should donate a share of their monthly income to help solve the most urgent global problems, and we should aim for this money to be spent as effectively as possible. The argument for increased donations is embarrassingly simple; many people have urgent needs, many others have vast amounts more than they need. In this article I will particularly argue for donating to poverty alleviation efforts, although similar arguments can be made for donating to other causes that effectively help to alleviate suffering.

1. Donations create dependence whereas the market makes everyone better off.

The first argument was a very convincing one for me during my bachelor’s degree in business studies. It follows from the Invisible Hand Theory, by Adam Smith, often considered the father of modern economics. The idea is that altruism does not spur progress, whereas greed does: “It’s not from the benevolence of the butcher, the brewer or the baker that we expect our dinner, but from their regard to their own interest”. This type of thinking seems to have influenced many students of economics, some even religiously believing egoism necessarily leads to growth, and altruism only forms an obstacle. If people attain money for nothing it will lead to dependence and sloth.

There undeniably are cases where self-interestedness can lead to win-win situation. In the above mentioned example altruism plays no role in making two people better off. However, it is far from being a universal law of nature. For example, people may be stuck in a poverty trap. Being poor may be the cause of future poverty. In a situation where one cannot eat more than one meal per day, it is quite a challenge to have the energy to work, let along have money to invest. This makes it even harder to buy food or other essentials. In this case an altruistic donation may help them get out of the negative spiral.

Regarding the worry of creating dependence, there have been numerous studies (see here and here) studying the behaviour of people receiving cash transfers, or free money, if you will. These studies indicate the worries may be overblown; money is not spent on booze and cigarettes, but instead invested in education or spent on healthcare.

2. What has aid achieved, anyway?

In the book Dead Aid, Dambisa Moyo argues that 1 trillion dollars have been sent to Africa, and yet the continent is stil poor. It is important to start by noting she refers mostly to state-aid, with motives often being unclear. Indeed in many cases donations have achieved little to nothing. But let us take a step back. The amount that has been sent to Africa may seem high at first, but if you look at the amount of people that has been helped by this money, and the timespan (400 million people during 60 years) it seems a lot less; 40 dollars per person per year. Moreover, there have been successes as well. For example, aid has played a decisive role in eradicating smallpox. Even if we would only consider the effect of eradicating smallpox, we would see one life has been saved for each $40.000.

More importantly, as argued by economist and effective altruism advocate Kellie Liket, personal donations can be (and ought to be) sent to organizations that are monitored and evaluated by independent organizations to be effective. For example, GiveWell and Giving What We Can evaluate and rank charities based on their effectiveness and scale. This allows donors to get more insight in what their money is achieving, and can make a huge difference in terms of maximizing impact. One of the higher ranking charities, GiveDirectly, involves giving money directly to the poorest households.

3. It is not our fault that others are poor

Another argument that often gets repeated is that it is not our fault that others are poor. We are not responsible for the fact that others are in a difficult situation. Moreover we have not lied, stolen or cheated to attain our money.

However, in other situations where we are not to blame, we would say we ought to help. As famously argued by Peter Singer; if we see a child drown, and we could save a child with no risk to ourselves, we would do it, and it would be considered immoral not to, even if we are not responsible for the child drowning. If we would be wearing an expensive suit at the moment we walk by the drowning child, we believe we should sacrifice the suit. Why do we fail to use the same reasoning for sacrificing our income to save lives of people on another continent?

In addition, our riches are also not (entirely) caused by our own virtues, and neither are the poor (entirely) to blame for their situation. Every individual’s financial situation is caused by a complex amalgam of causal factors. Thomas Pogge claims in his book Human Rights and Global Poverty that we actually are to blame (albeit indirectly) for global poverty, due to the influence Western countries’ policies have had on the developing world. This causal chain takes many forms. For example, by trading with leaders who came to power in democratically illegitimate ways, a signal is being sent to potential coup-planners that riches await if they attain power. Another way in which we contribute to underdevelopment is through climate change. People in the western world have the highest ecological footprint, whereas developing countries are the first to suffer the consequences.

Due to the complexity of our globalised world, it is not clear to which degree we are responsible for negative outcomes in faraway lands. However, while we may not be certain about the degree of responsibility we carry, it seems to me quite implausible to assume we have no responsibility whatsoever. It is unfortunate that in cases of uncertainty it is easiest to stick with the belief most comfortable for ourselves. At times it wouldn’t hurt to examine our biases and give the worse-off the benefit of the doubt.

Donating merely attacks symptoms; we need structural change

This last argument may be the most convincing one, although still deceiving. An often heard argument against donating money is that charities can merely fight symptoms instead of attacking the root of the problem. For example, GiveDirectly gives money to the poor, but it does nothing to change the institutions or social structures that caused them to be poor in the first place.

However, it would be too hasty to conclude from this that donating is useless. At best it should convince us that we should try to contribute to solving structural problems. As mentioned earlier, poverty is caused by a myriad of factors, including corrupt political institutions. A clear solution is not easy to find. Many economists believe that democratic institutions stimulate economic growth, but changing an authoritarian government to a democracy is easier said than done, especially when this is attempted from a foreign country. It may be that institutional change is most effective if it is steered by the local population. In any case, it is important that people are actively working on such puzzles. But at the same time, the two approaches are not mutually exclusive. You may take a paracetamol after a night of drinking, and at the same time make changes in your lifestyle to not have headaches in the future. Structural change makes you feel better in the long term, but if you can feel better in the short term, this should equally be considered a plus. Similarly, we may want to think about ways in which problems can be solved systematically, while at the same time helping those people suffering from these problems today. An argument against donations would only be plausible if we can reason that donations are forming an obstacle against structural change. If there would be no effect from our donation to structural solutions, the positive effect our donation has had is still very much present. And perhaps there may even be an indirect effect on structural change. After all, a literate and healthy population may be more effective in demanding democratic institutions.

To conclude

The attentive reader may wonder; where does it end? I may be willing to forego expensive cars and clothes, but if I were to go out for a beer with a friend I would also be spending money on something trivial. And this type of reasoning could be taken far enough until I never do anything fun anymore.

The short answer to this is: this is indeed the implication. At the same time, nobody would go this far. A pragmatic consideration should take place. On the one hand we can be conscious of the underlying principle: as long as there are people who suffer, donating more to alleviate this suffering is always better. On the other hand we have to be realistic about the limits to our altruism. We happen to live in a society where it is very normal to use our money for luxuries such as expensive restaurants and faraway travels. If we were to give this up, this may have negative effects on our social life. This leads to an inescapable tension. This tension is not solved by abstaining from donating altogether. Members of the movement Effective Altruism have decided to make an oath to spend 10% of their income to effective organisations. Some donate more, others less. We may not be able to live a perfectly moral life, but if we acknowledge the underlying principles, we can make steps in the right direction.

This article was originally published in Young Critics