The real problem with charities
When you bring up the topic of charity in conversation, people almost always suggest that donating to them is a waste of money — “Don’t you know, they just spend all their money on admin!”; “None of the money goes to the people who need it!”; “Didn’t you see the news a while back, some charity CEO stole a whole heap of money!”.
Lines like these are certainly comforting if you don’t want to feel guilty for not giving to charity. After all, if your donation is just going to line some bureaucrat’s pocket, then it’d do just as much good staying in your own pocket.
But are these good excuses? Well, not really.
In one study, across a sample of 265 charities considered, the average percentage of their budget spent on administrative costs was 9.6%. Australia’s five largest charities spend between 15% and 24% on administration and fundraising. That may seem high but it means that more than 76% of your donation still gets to where it’s needed. That’s not so bad after all. And there are charities out there which exceed 90%, and some which put 100% of your donation towards their programs. So, high overheads really aren’t a good excuse not to donate to any charities. And neither are the anecdotal claims about embezzlement and fraud — according to data from the UK, charities lose less than 1.5% of funds to such crimes.
On top of that, a lot of those administrative costs can be very worthwhile — they include research and follow-up surveys done by the charity to determine whether their intervention actually works (more on this later), as well as the recruitment of talented employees who can make the charity perform a lot better. This plays out in the data — it’s been found that there’s a link between extra administrative spending and extra impact. And if spending a fraction of their budget on research or salaries allows a charity to save 10 times as many lives, it’d be a bit horrifying to find out that a charity didn’t spend that money (especially just to impress us fickle donors with its low admin costs).
So that’s not so great an excuse. But I’ve got an even better excuse for you, if you don’t want to have to give to charity. And that’s ineffectiveness.
The PlayPump was a media sensation. It was a clever idea, intended to help villages in low-income countries access clean groundwater. Resembling a playground merry-go-round, it was built for children to play on, to spin around and, at the same time, pump clean water from deep underground. In 2006, PlayPumps International received $10m in funding from the US government, and endorsements from George and Laura Bush, Jay-Z, and DJ Mark Ronson. Millions of dollars were poured into the project, but no one thought to check whether PlayPumps actually worked like they were supposed to.
It turns out that children don’t like playing on PlayPumps — the pump requires constant force to operate, so they don’t spin by themselves. Typically, the women of the village ended up pushing the merry-go-round around, and working harder than they did with the old hand-pumps. Plus, the pumps cost $14,000 each (far more than the old pumps), and weren’t maintained — a large proportion of them promptly broke down and were never repaired. So those millions of dollars failed to do much good at all. (In fact, they made a lot of people’s lives worse.)
There you go — regardless of their overhead, some charities fail to achieve much at all. They’re simply ineffective, which is a much better excuse for not giving to charity, and is arguably a much more serious problem with the charity sector.
But that excuse doesn’t really work either. If we do some research, we can find charities which are effective, and some which are spectacularly effective — according to the results of rigorous trials.
Suppose that what we care about is preventing people from dying (which seems like something worth doing), and we have $1,000 with which to do it. Well, we might spend that money on combatting HIV. One common cause of death among people with HIV in sub-Saharan Africa is Kaposi’s Sarcoma, a painful cancer. If we spent our $1,000 on treatments for Kaposi’s Sarcoma, we could save someone’s life — in fact, according to the University of Washington’s Disease Control Priorities Report, we could buy them up to eight extra weeks of life for our money. And that’s a good deal — I’d certainly pay $1,000 for two extra months of life if I had Kaposi’s Sarcoma, and it’s considered a highly cost-effective treatment in high-income countries like Australia.
But there are lots of other people dying from HIV/AIDS, and we can help them too. If we spent our $1,000 on anti-retroviral medications, we could buy them two whole extra years of healthy life — 13 times as long. Even if the charity providing the medication had to spend 5% extra on administration, there’s still 1,200% as much benefit.
We might also spend our money on condom distribution, and prevent people from getting HIV in the first place. With $1,000, we could save 10 years of life — by buying condoms for thousands of people, on average, the total benefits would add up to 10 years of healthy life. That’s now a 6,500% greater impact than we started with.
But we can do even more. If we care about saving lives in general, and not just saving lives from HIV/AIDS, then there are other opportunities. Using that $1,000 to buy bed nets for people in areas at risk of malaria would, on average, save more than 30 years of healthy life. That’s a 19,500% increase in impact — for the same donation, we could do the equivalent of saving almost 200 times as many lives (or extending someone’s life by 200 times as long) as if we’d gone with the first option of cancer treatment.
And there are charities out there doing these ridiculously high-impact activities. The Against Malaria Foundation, for instance, distributes insecticide-treated bednets for roughly $4.85 each, thereby saving hundreds of times more lives for the same donation than many other charities. And this is all backed up by in-depth research, independent evaluations and, unlike with PlayPumps, researchers going back to the areas afterwards to establish whether the bednets helped reduce mortality and by how much.
Organisations such as GiveWell.org do in-depth research into charities like the Against Malaria Foundation and allow us to find the charities that save the most lives, or which most improve people’s quality of life, for your donation. It’s not just possible to find charities that do a lot of good, it’s really easy to do so.
But maybe we want to do something other than save human lives. Research and evidence can still help us find amazing opportunities. For reducing greenhouse emissions, there’s been research into what works and what doesn’t, and it’s been found that donations to charities like Cool Earth reduce emissions for $0.38 per tonne of CO2. For improving animal welfare, research bodies such as Animal Charity Evaluators have identified charities which can save animals from lives in industrial agriculture for, on average, less than $1. And even for things as intangible as human freedom, there has been research into which organisations could potentially have the greatest impact on criminal justice reform.
So next time someone tells you, terribly pleased with themselves, that donating to charity is a waste of money, you can rest assured that they’re wrong. Perhaps donating to charity isn’t for everyone, but it doesn’t do any good to make excuses. And it certainly doesn’t do any good to pretend that there aren’t amazing opportunities out there for us all to do an enormous amount of good.
If you’re interested in how you can do an enormous amount of good, you’re not the only one. See effectivealtruism.org, or watch Dr Toby Ord’s TEDx talk (from which much of this article was adapted).
This article was originally published in Woroni.
