How to donate in the most effective way

We’re at a stage where we’ve never had more information about the suffering of the human race. And when we see it, most of us feel like we want to do something about it.

But where does one start? There are so many questions to answer: What is the best way to help? Should I donate money or time? With countless charities – who should I donate to? Can I help by choosing one career over another? How do I make sure my contribution is as effective as possible?

None of these questions is easy to answer and because we’re not always clear on the best course of action, we often do nothing.

We have found some ideas and principles from a movement called effective altruism which could potentially help you to navigate the maze. It is not perfect by any means, but it has certainly helped a few of us at Naked move past apathy and into action when it comes to giving.

Who should I donate to?

When trying to find a charity to donate to, we’re often drawn to the ones that sound cool, seem innovative, attract a lot of media attention or to the ones that make us feel some sort of sympathy or empathy. The reality is that effective charitable giving isn’t just about following your heart or news headlines.

Let’s take PlayPumps International as an example: an award-winning charity that installed merry-go-rounds in southern Africa that would pump water from underground when children played on them. It sounds like a win-win situation, right? PlayPumps caught not only the media’s eye but also that of celebrities and the international community, who ended up donating millions of US dollars to the charity.

However, PlayPumps did not come close to delivering on their promise of the capabilities of their pumps. The Guardian calculated that for PlayPumps to have met their stated goals, the children of the communities would have to have played on the pumps constantly for 27 hours every day. The pumps also needed a constant push – they didn’t gain momentum once started – and so were far less fun to play on than regular merry-go-rounds. The women of the village usually ended up having to do the manual labour. There was also little to no maintenance of the PlayPumps, and what’s more, each pump cost a whopping $14,000, which was several times the cost of the standard hand pumps that pumped more water per hour.

PlayPumps International is an example of a charity that sounded like it could really make a difference with an aspirational, engaging and cool story. It gave the feeling of, “I’d really like to help make that happen.” But at the end of the day, it lacked practicality and follow-through.

How to look beyond face value and research a charity’s effectiveness

Effective altruism is about finding ways to most optimally use your time and money to help other people. The movement advocates for the use of evidence and reasoning to figure out the most effective ways to do good and make the world a better place.

The movement claims that it’s possible to be surprisingly rational in your decisions around where to donate rather than basing your decision on moral intuition and emotion. For example, let’s say a donation given to one charity saves two lives but when given to another charity 10 lives could be saved – if this could be known beforehand, it would be obvious which charity the donation should go to.

That doesn’t mean it’s an easy principle to follow: it can be a full-time job trying to quantify a specific charity’s impact – we don’t all have the time to sift through financial statements and business plans.

Luckily some organisations like Givewell can help.

Givewell is a fantastic non-profit that is dedicated “to finding outstanding giving opportunities and publishing the full details of [their] analysis to help donors decide where to give”. They do in-depth research to find out how much good a charity does (in terms of lives saved, improved, etc.).

One of their top-rated charities is the Against Malaria Foundation. This charity provides mosquito nets to people living in sub-Saharan Africa so that they are not bitten by malaria-carrying mosquitoes. Givewell estimates that when donating to this charity, it costs between R45,000 and R75,000 to save a life. This may sound like a lot, but after performing the same calculations on many of the world’s biggest charities, these numbers are some of the lowest they’ve ever come across.

Now that you know where to find charities, combine your heart and head

We often don’t know what cause should take precedence over another. Is curing disease a top priority? Maybe bringing an end to animal suffering? Maybe minimising the loss of human life (like the mosquito net example above)? Or preserving the world’s biodiversity, focusing on preventing any further animal extinctions? These are questions to which the answers differ from individual to individual.

"I believe that by combining the heart and the head – by applying data and reason to altruistic acts – we can turn our good intentions into astonishingly good outcomes," says William MacAskill, co-founder of Effective Altruism, in his book, Doing Good Better.

To help you with your decision, MacAskill suggests considering these five questions when figuring out where to donate:

1. How many people benefit, and by how much?
2. Is this the most effective thing you can do?
3. Is this area neglected?
4. What would have happened otherwise? (ie. Are you just doing what someone else was likely to do anyway?)
5. What are the chances of success, and how good would success be?

How much should I donate?

Many of us feel like if we can only donate a small amount, we might as well not donate anything. But what we don’t realise is that a small contribution can have a bigger impact than we might think – one is infinitely greater than zero.

After establishing that something is better than nothing, we’re still left with the question of ‘how much?’ There is no right or wrong answer to this question, but here are a few ideas that have worked for others:

Some people aspire to donate between 3-10% of their taxable income

The idea of donating 10% of your income has been around for thousands of years and appears in several different religious texts. This figure is also suggested through secular groupings of like-minded people like Giving What We Can, through which people pledge to donate 10% of their annual income to highly effective charities (while 10% is the suggested amount, some people donate more and some people donate less). Giving What We Can was founded by Toby Ord and Will MacAskill after Toby was inspired by the Effective Altruism movement to donate a large proportion of his income to effective charities.

Others even go as far as figuring out how much they need to live and then donating everything above that amount

People like Peter Singer started off by donating 10% of his income but as his earnings increased, so did his level of donations. Today, he and his wife give away at least 40%.

Some even steer their careers in the direction of doing good

This makes a lot of sense if you think that on average, we spend 80,000 hours of our life working. What better resource than your work life to make the world a better place? 80000hours.org has some great advice if you want to make an impact on your career.

If 10% is too much, just do what you can and start somewhere

If this information is still a little intimidating, why not just start by getting into the habit of donating a small amount. You can even create a debit order; it’s automatic and it is something you don’t have to actively do each month. Starting somewhere can even be committing to yourself that you will donate a little bit when you get your next raise.

We have barely scratched the surface, so to learn more about donating and effective altruism, check out the books, podcasts and TED Talks below.