Efficient Charity: Do Unto Others...

This was origi­nally posted as part of the effi­cient char­ity con­test back in Novem­ber. Thanks to Roko, mul­ti­fo­li­aterose, Louie, jmmcd, jsal­vatier, and oth­ers I for­get for help, cor­rec­tions, en­courage­ment, and both­er­ing me un­til I fi­nally re­mem­bered to post this here.

Imag­ine you are set­ting out on a dan­ger­ous ex­pe­di­tion through the Arc­tic on a limited bud­get. The griz­zled old prospec­tor at the gen­eral store shakes his head sadly: you can’t af­ford ev­ery­thing you need; you’ll just have to pur­chase the bare es­sen­tials and hope you get lucky. But what is es­sen­tial? Should you buy the warmest parka, if it means you can’t af­ford a sleep­ing bag? Should you bring an ex­tra week’s food, just in case, even if it means go­ing with­out a rifle? Or can you buy the rifle, leave the food, and hunt for your din­ner?

And how about the field guide to Arc­tic flow­ers? You like flow­ers, and you’d hate to feel like you’re failing to ap­pre­ci­ate the harsh yet del­i­cate en­vi­ron­ment around you. And a digi­tal cam­era, of course—if you make it back al­ive, you’ll have to put the Arc­tic ex­pe­di­tion pics up on Face­book. And a hand-crafted scarf with au­then­tic Inuit tribal pat­terns wo­ven from or­ganic fibres! Wicked!

...but of course buy­ing any of those items would be in­sane. The prob­lem is what economists call op­por­tu­nity costs: buy­ing one thing costs money that could be used to buy oth­ers. A hand-crafted de­signer scarf might have some value in the Arc­tic, but it would cost so much it would pre­vent you from buy­ing much more im­por­tant things. And when your life is on the line, things like im­press­ing your friends and buy­ing or­ganic pale in com­par­i­son. You have one goal—stay­ing al­ive—and your only prob­lem is how to dis­tribute your re­sources to keep your chances as high as pos­si­ble. Th­ese sorts of eco­nomics con­cepts are nat­u­ral enough when faced with a jour­ney through the freez­ing tun­dra.


But they are de­cid­edly not nat­u­ral when fac­ing a de­ci­sion about char­i­ta­ble giv­ing. Most donors say they want to “help peo­ple”. If that’s true, they should try to dis­tribute their re­sources to help peo­ple as much as pos­si­ble. Most peo­ple don’t. In the “Buy A Brush­stroke” cam­paign, eleven thou­sand Bri­tish donors gave a to­tal of £550,000 to keep the fa­mous paint­ing “Blue Rigi” in a UK mu­seum. If they had given that £550,000 to buy bet­ter san­i­ta­tion sys­tems in Afri­can villages in­stead, the lat­est statis­tics sug­gest it would have saved the lives of about one thou­sand two hun­dred peo­ple from dis­ease. Each in­di­vi­d­ual $50 dona­tion could have given a year of nor­mal life back to a Third Wor­lder af­flicted with a dis­abling con­di­tion like blind­ness or limb de­for­mity..

Most of those 11,000 donors gen­uinely wanted to help peo­ple by pre­serv­ing ac­cess to the origi­nal can­vas of a beau­tiful paint­ing. And most of those 11,000 donors, if you asked, would say that a thou­sand peo­ple’s lives are more im­por­tant than a beau­tiful paint­ing, origi­nal or no. But these peo­ple didn’t have the proper men­tal habits to re­al­ize that was the choice be­fore them, and so a beau­tiful paint­ing re­mains in a Bri­tish mu­seum and some­where in the Third World a thou­sand peo­ple are dead.

If you are to “love your neigh­bor as your­self”, then you should be as care­ful in max­i­miz­ing the benefit to oth­ers when donat­ing to char­ity as you would be in max­i­miz­ing the benefit to your­self when choos­ing pur­chases for a po­lar trek. And if you wouldn’t buy a pretty pic­ture to hang on your sled in prefer­ence to a parka, you should con­sider not helping save a fa­mous paint­ing in prefer­ence to helping save a thou­sand lives.

Not all char­i­ta­ble choices are as sim­ple as that one, but many char­i­ta­ble choices do have right an­swers. GiveWell.org, a site which col­lects and in­ter­prets data on the effec­tive­ness of char­i­ties, pre­dicts that an­ti­malar­ial drugs save one child from malaria per $5,000 worth of medicine, but in­sec­ti­cide-treated bed nets save one child from malaria per $500 worth of net­ting. If you want to save chil­dren, donat­ing bed nets in­stead of an­ti­malar­ial drugs is the ob­jec­tively right an­swer, the same way buy­ing a $500 TV in­stead of an iden­ti­cal TV that costs $5,000 is the right an­swer. And since sav­ing a child from di­ar­rheal dis­ease costs $5,000, donat­ing to an or­ga­ni­za­tion fight­ing malaria in­stead of an or­ga­ni­za­tion fight­ing di­ar­rhea is the right an­swer, un­less you are donat­ing based on some crite­ria other than whether you’re helping chil­dren or not.

Say all of the best Arc­tic ex­plor­ers agree that the three most im­por­tant things for sur­viv­ing in the Arc­tic are good boots, a good coat, and good food. Per­haps they have run highly un­eth­i­cal stud­ies in which they re­lease thou­sands of peo­ple into the Arc­tic with differ­ent com­bi­na­tion of gear, and con­sis­tently find that only the ones with good boots, coats, and food sur­vive. Then there is only one best an­swer to the ques­tion “What gear do I buy if I want to sur­vive”—good boots, good food, and a good coat. Your prefer­ences are ir­rele­vant; you may choose to go with al­ter­nate gear, but only if you don’t mind dy­ing.

And like­wise, there is only one best char­ity: the one that helps the most peo­ple the great­est amount per dol­lar. This is vague, and it is up to you to de­cide whether a char­ity that raises forty chil­dren’s marks by one let­ter grade for $100 helps peo­ple more or less than one that pre­vents one fatal case of tu­ber­cu­lo­sis per $100 or one that saves twenty acres of rain­for­est per $100. But you can­not ab­di­cate the de­ci­sion, or you risk end­ing up like the 11,000 peo­ple who ac­ci­den­tally de­cided that a pretty pic­ture was worth more than a thou­sand peo­ple’s lives.

De­cid­ing which char­ity is the best is hard. It may be straight­for­ward to say that one form of an­ti­malar­ial ther­apy is more effec­tive than an­other. But how do both com­pare to fi­nanc­ing med­i­cal re­search that might or might not de­velop a “magic bul­let” cure for malaria? Or fi­nanc­ing de­vel­op­ment of a new kind of su­per­com­puter that might speed up all med­i­cal re­search? There is no easy an­swer, but the ques­tion has to be asked.

What about just com­par­ing char­i­ties on over­head costs, the one easy-to-find statis­tic that’s uni­ver­sally ap­pli­ca­ble across all or­ga­ni­za­tions? This solu­tion is sim­ple, el­e­gant, and wrong. High over­head costs are only one pos­si­ble failure mode for a char­ity. Con­sider again the Arc­tic ex­plorer, try­ing to de­cide be­tween a $200 parka and a $200 digi­tal cam­era. Per­haps a parka only cost $100 to make and the man­u­fac­turer takes $100 profit, but the cam­era cost $200 to make and the man­u­fac­turer is sel­l­ing it at cost. This speaks in fa­vor of the moral qual­ities of the cam­era man­u­fac­turer, but given the choice the ex­plorer should still buy the parka. The cam­era does some­thing use­less very effi­ciently, the parka does some­thing vi­tal in­effi­ciently. A parka sold at cost would be best, but in its ab­sence the ex­plorer shouldn’t hes­i­tate to choose the the parka over the cam­era. The same ap­plies to char­ity. An an­ti­malar­ial net char­ity that saves one life per $500 with 50% over­head is bet­ter than an an­tidi­ar­rheal drug char­ity that saves one life per $5000 with 0% over­head: $10,000 donated to the high-over­head char­ity will save ten lives; $10,000 to the lower-over­head will only save two. Here the right an­swer is to donate to the an­ti­malar­ial char­ity while en­courag­ing it to find ways to lower its over­head. In any case, ex­am­in­ing the fi­nan­cial prac­tices of a char­ity is helpful but not enough to an­swer the “which is the best char­ity?” ques­tion.

Just as there is only one best char­ity, there is only one best way to donate to that char­ity. Whether you vol­un­teer ver­sus donate money ver­sus raise aware­ness is your own choice, but that choice has con­se­quences. If a high-pow­ered lawyer who makes $1,000 an hour chooses to take an hour off to help clean up lit­ter on the beach, he’s wasted the op­por­tu­nity to work over­time that day, make $1,000, donate to a char­ity that will hire a hun­dred poor peo­ple for $10/​hour to clean up lit­ter, and end up with a hun­dred times more lit­ter re­moved. If he went to the beach be­cause he wanted the sun­light and the fresh air and the warm feel­ing of per­son­ally con­tribut­ing to some­thing, that’s fine. If he ac­tu­ally wanted to help peo­ple by beau­tify­ing the beach, he’s cho­sen an ob­jec­tively wrong way to go about it. And if he wanted to help peo­ple, pe­riod, he’s cho­sen a very wrong way to go about it, since that $1,000 could save two peo­ple from malaria. Un­less the lit­ter he re­moved is re­ally worth more than two peo­ple’s lives to him, he’s erring even ac­cord­ing to his own value sys­tem.

...and the same is true if his philan­thropy leads him to work full-time at a non­profit in­stead of go­ing to law school to be­come a lawyer who makes $1,000 /​ hour in the first place. Un­less it’s one HELL of a non­profit.

The Ro­man his­to­rian Sal­lust said of Cato “He preferred to be good, rather than to seem so”. The lawyer who quits a high-pow­ered law firm to work at a non­profit or­ga­ni­za­tion cer­tainly seems like a good per­son. But if we define “good” as helping peo­ple, then the lawyer who stays at his law firm but donates the profit to char­ity is tak­ing Cato’s path of max­i­miz­ing how much good he does, rather than how good he looks.

And this di­chotomy be­tween be­ing and seem­ing good ap­plies not only to look­ing good to oth­ers, but to our­selves. When we donate to char­ity, one in­cen­tive is the warm glow of a job well done. A lawyer who spends his day pick­ing up lit­ter will feel a sense of per­sonal con­nec­tion to his sac­ri­fice and re­live the mem­ory of how nice he is ev­ery time he and his friends re­turn to that beach. A lawyer who works over­time and donates the money on­line to starv­ing or­phans in Ro­ma­nia may never get that same warm glow. But con­cern with a warm glow is, at root, con­cern about seem­ing good rather than be­ing good—albeit seem­ing good to your­self rather than to oth­ers. There’s noth­ing wrong with donat­ing to char­ity as a form of en­ter­tain­ment if it’s what you want—giv­ing money to the Art Fund may well be a quicker way to give your­self a warm feel­ing than see­ing a ro­man­tic com­edy at the cin­ema—but char­ity given by peo­ple who gen­uinely want to be good and not just to feel that way re­quires more forethought.

It is im­por­tant to be ra­tio­nal about char­ity for the same rea­son it is im­por­tant to be ra­tio­nal about Arc­tic ex­plo­ra­tion: it re­quires the same aware­ness of op­por­tu­nity costs and the same hard-headed com­mit­ment to in­ves­ti­gat­ing effi­cient use of re­sources, and it may well be a mat­ter of life and death. Con­sider go­ing to www.GiveWell.org and mak­ing use of the ex­cel­lent re­sources on effec­tive char­ity they have available.