Holiday Giving Got You Down? Here’s the Cure.

Holiday giving makes me crazy. Like many people, I plan to donate some of my income to help people living in extreme poverty overseas. I know my dollars can make a difference. Yet, I’m skeptical of the multi-billion dollar charity industry. While I appreciate its mission, I lament its hype, lack of transparency, and emotional manipulation.

My skepticism is well founded. As a Peace Corps Volunteer in Malawi, I learned that people living on a dollar a day are good at improving their own lives, even with threadbare resources. What they lack are opportunities, as outsiders (especially large charities) often dictate to the poor, instead of listening to them. Poverty, at its core, is a deprivation (or failure) of empowerment, a condition most charities reinforce.

I’m always reminded this time of year that, for many generous Americans, poverty means something entirely different — a deprivation of resources. In Malawi, American charity is the business of delivering things (such as clothing and education) from outside organizations assumed to possess superior expertise vis-a-vis the local population. That’s why we give to outside organizations, right? They deliver value to the poor.

I wish that were true. While affluent outsiders may have good intentions (many do), commandeering the problems of others is morally and ethically suspect. As a practical matter, it is nearly impossible to prioritize local needs and design sustainable solutions from the outside. Indeed, doing so robs underserved communities of their agency. Profiting handsomely from this inequity, as many charities do, adds insult to injury.

Depressed? Don’t be. Thanks to entrepreneurs and advances in technology, your holiday giving can directly engage the poor in constructive ways. The key is targeting charities that embody the following principles.

Short on time and just want to know where to invest your charitable dollars? Skip to the bottom for recommendations.

Helping is hard. It’s actually really hard. Turns out, people living in poverty have minds of their own, which we often don’t understand, and they pursue their plans in spite of our perfectly designed and deployed programming. It’s frustrating and humbling when paternalism fails, but there is an alternative: shifting the focus from “helping” to empowering. Put poor people in charge and stand back. It works.

Get your hands dirty. I cringe every time I see a charitable organization use the terms “grassroots” or “in the field.” Let’s be clear: unless you sleep in a village on a mat, eat local food, and use local sanitation for an extended period of time, you are not “in the field.” Likewise, you are not “grassroots” by virtue of muddy miles logged on your Toyota SUV or Land Rover. Here are some quick tests: do you dream in a local language? Do you use local transportation? Do you wash your underwear in a river?

It’s about Benjamin Franklins on the ground. Major international capitols like DC crawl with consulting firms battling for lucrative government “development” contracts. Many of these non-governmental organizations (NGOs) are for-profit juggernauts or highly sophisticated nonprofits.

Whether they have good intentions is debatable; whether they are seeking cash is not. Very little of that cash (most NGOs don’t say how much) reaches the ground for direct project costs like cement and roofing sheets. Most goes to expenses associated with orchestrating projects, like salaries, vehicles and fuel. Instead of playing accounting games, good organizations report the percentage of their budget spent on direct project costs. In Kenya, GiveDirectly transfers 91% of every donated dollar to a family in need.

Data trump marketing only when data become marketing. Number crunchers are disrupting philanthropy. After years of specious and potentially illegal marketing, many charitable institutions face the daunting task of justifying their existence in the arcane realm of statistical analysis. Smart charities rigorously evaluate impact. Yet, charities worthy of your money go a step further and publicly promote their data, favorable or not, as a learning opportunity for everyone. We should reward their courage.

Appreciate the opportunity cost of every dollar. More charity is not necessarily better charity. We’ve all seen experts that don’t add value, trainings that fall flat, and luxury hotel bills that defy explanation. Those wasted dollars add up. NGOs should judge spending decisions against a simple standard: would this dollar do more good on the ground, in hands of local people? A related point: NGOs should require recipients to contribute cash to programming designed for their benefit, elevating them from beneficiaries to investors. Charity is not about giving; it’s about dignity.

So, how should you spend your charitable dollars this holiday season? I’m a fan of the effective altruism movement and, in particular, charity evaluator GiveWell, which recommends groups that are “evidence-backed, thoroughly vetted, and underfunded.” If you’re looking for a boutique organization using technology to connect donations directly to community-led projects in impoverished villages, I recommend my nonprofit, Village X. Another standout is Watsi, a crowdfunding site allowing donors to finance urgent medical care for vetted, low-income patients in developing countries.

Giving is important. It’s the right thing to do, so do it well. Happy holidays, everyone!