Key Messages
How To Make Your Charitable Donations Count: A Guide To Effective Giving
Do you want to maximize the impact of your charitable giving? If so, then Doing Good Better by William MacAskill is the book for you.
This book explains how we can send our donations in better directions, to sources that will help those who really need it most.
You’ll learn why following a few simple principles gives you the best chance of making the world a better place.
You’ll discover which mathematical law applies to charitable giving, why Fairtrade may do more harm than good, and why it’s OK for charity CEOs to earn big salaries.
With this knowledge, you can be confident that your donations will be put to the best possible use and have maximum impact.
How To Decide Where To Donate Your Money: The Science And Philosophy Behind Maximizing Charitable Impact
When you give to charity, it’s important to think carefully about where you make your donation.
You want to make sure that your donation is used in the most efficient way – so you should always choose to donate to the cause which will have the greatest impact.
One example of this principle in action can be seen in Dr.
James Orbinski’s work during the Rwandan genocide: with limited resources and countless patients needing help, he had to prioritize between them.
He developed a system of writing the number “1”, “2” or “3” on his patients’ foreheads to determine who should be treated first – meaning he could maximize his donations’ effect by focusing on those who would benefit most from his help.
Another instance where donors should focus on maximizing their impact is when choosing low-probability causes with high expected value, such as was (unfortunately) shown in 2011 at Fukushima Power Plant accident.
The planners neglected the danger entirely and failed to realize how devastating it could be if this worst-case scenario did occur – leading to 1,600 people dying as a result.
Therefore, when giving to charity or donating money to a good cause, always ensure that you are making an informed decision based on expected value calculations and prioritizing where your donation will have the greatest possible effect!
The Law Of Diminishing Returns: Donating To Neglected Causes Has A Greater Impact Than Donating To Overfunded Ones
When it comes to charitable giving, you want to make sure you’re getting the most bang for your buck.
That’s why it’s important to understand the law of diminishing returns.
This basically means that each additional amount of something makes less difference than the last one.
For instance, imagine you were homeless and had no sweaters as winter was quickly approaching.
One sweater could make a huge difference in your life—it could even save you from hypothermia!
But if you already have a couple sweaters, adding one more won’t really do a lot to improve your quality of life.
The same thing applies to charitable donations: if an organization is overfunded, adding just a little more won’t make much of a difference.
This is why it’s important not to give to causes that already receive a lot—they may already be overfunded.
It’s much better to focus your donations on neglected causes that need funds even more desperately.
Disaster relief tends to get lots of attention and donations (for every person who died in the 2011 Japan earthquake, aid organizations received $330,000!).
Poverty-related causes typically receive far fewer dollars per death (only $15k!), so this is where you should concentrate your contributions in order to have the most positive impact with what money you can give.
Assessing The Counterfactual To Make The Most Impactful Charitable Decisions
When it comes to making the biggest impact with your charitable contributions, you need to be mindful of how you can effectively make the most difference.
To do this, it’s important to assess how much of a contribution you are actually making – what would have happened if you didn’t intervene? This concept is known as “assessing the counterfactual” and it’s an important tool when evaluating your actions.
For example, imagine seeing a man choking.
There’s no one else around so you run up to save him.
After performing the Heimlich maneuver on him, he was saved but his vocal chords were permanently damaged in the process.
When assessing the counterfactual in this scenario, it’s clear that overall, your action was good since he might have died without your intervention.
But consider another scenario where there was a trained paramedic at the scene who could have saved his life without any permanent damage done – in this case, your action wasn’t so good and would not be seen as making the largest impact possible.
In order to make sure that you are making the most positive change for those in need, it’s important to assess where your unique skillset can make a difference – could someone else do better than you? If yes, then it may be worth pursuing a lucrative career to substitute direct action with large monetary contributions and “earn to give” rather than doing something that could easily be done by someone else or having little effect on those in need.
How To Have A Positive Impact On The World Through Your Career: Tips For Earning To Give And Finding The Right “Personal Fit”
If you’re trying to make a positive impact in the world with your career, it’s important to choose wisely.
Working for an NGO or simply “following your passion” may not be the best career choices – instead, think about what will give you long-term stability and financial security.
One way is by “earning to give” – choosing a specialty with a high salary that enables you to donate part of your income effectively.
This way, not only will you have financial security, but you’ll also have funds to donate philanthropically.
Additionally, when selecting a career path it’s important to opt for something with a good personal fit.
Careers motivated by passion can be difficult to break into and interests often change over time, leaving passionate pursuits stale.
Instead, aim for work that provides independence, variety and the sense of completion from having tangible results in the end.
Charity Evaluations Should Focus On Impact, Not Overhead Costs
When it comes to deciding which charity one should contribute to, it is much more important to evaluate what the charity actually does – its impact – than it is to look at how much of their donations go towards administrative costs and executive pay.
Charity Navigator, a well-known charity assessor often used by people trying to decide where to donate, ranks charities by how much of their total donations go directly to their main programs.
Nevertheless, this approach can be misleading as it ignores what a charity is ultimately doing with the money.
To illustrate this point, consider a hypothetical situation in which you’ve set up a charity that provides caviar to hungry bankers.
This may sound like an absurd example but despite its lack of usefulness, if the organization spends only 0.1 percent on overhead costs and no salary for yourself as CEO then this will result in a high ranking from organizations like Charity Navigator.
However, the real question here is not whether the money is going towards salaries or overhead expenses but rather if there are any tangible results emerging from our contribution (such as improved health outcomes).
As an example, Development Media International (DMI) dedicates 44 percent of their donations towards overhead expenses such as $1.5 million worth of media campaigns dedicated to promoting health education in certain countries – such as combatting diarrhoea which kills 760,000 children every year in the developing world through better hygiene education.
Charities like DMI show us just how vital it is that we go beyond simply considering salaries and other expenses when trying to make decisions about where we should donate – focusing instead on evaluating the impact they’re having on people’s lives.
Don’t Be Fooled: Sweatshops Are Not As Bad As We’re Led To Believe, And Buying Fairtrade May Not Make The Difference We Think It Does
When it comes to charity, our actions are often led by good intentions.
However, these well-meaning endeavours can sometimes have the opposite of the desired effect.
Take for example, Fairtrade coffee or other goods produced in sweatshops.
Although it seems like a way of ensuring that workers receive a better wage, it often has the reverse effect.
Often poorer countries cannot meet the rigorous standards for becoming a Fairtrade producer and as such reap no benefit from this additional cost passed on to consumers.
Unfortunately, those who benefit most from Fairtrade goods are usually much wealthier countries such as Costa Rica and Mexico – which typically already have access to higher wages than countries such as Ethiopia – where a living they can barely make ends meet on $600 per year.
The money added to the cost of Fairtrade items often doesn’t even reach producers themselves, as Dr Peter Griffiths – economic consultant to The World Bank found out when he estimated only one percent made it through!
So while we may think we’re helping with charitable giving and purchases of “sweatshop goods”, we’re ultimately doing more harm than good and our efforts could be better spent elsewhere.
Wrap Up
Doing Good Better by William MacAskill delivers an important message to those who wish to give back: our charitable actions, no matter how well intentioned they may be, can sometimes have negative consequences beyond what we perceive.
In order to maximize the potential impact of our donations, it is essential that we think critically and rationally about whom we donate to and how our money will be spent.
If you’re wanting to make a difference, one way is by turning giving into a habit – setting up a regular payment plan with just 10% of your income going to charities that you trust and follow up on.
Doing Good Better challenges us to not just do good things, but also do them better.
