Helping more is better than helping less, yet do we apply this logic to our charitable donations?
Friday 19th July, reading time: 10 mins
Imagine you’re buying a light bulb. Two different brands are side by side. The labels indicate that both bulbs offer the same brightness and lifespan; the only significant difference is the price. One brand is 2 euros, while the other is 20 euros.
Which would you buy?
I’m not a fortune teller, but I’m sure you would choose the more affordable brand and save the extra 18 euros for other purchases.
If the store offered a third, similar brand for 20 cents, you would probably choose that one, fill your bag, and leave with some change.
While it’s unlikely that store prices vary so much for similar items, research suggests that such surprising cost-benefit differences do exist in the realm of charitable donations. The amount of “good” your money can do varies significantly from one charity to another.
In this article, we explore ten reasons why it’s important to prioritize impact when donating to charity.
1) We want to do good, not bad
In 2000, a nonprofit organization named PlayPumps won the World Bank’s Development Marketplace Award. Its flagship product was a small merry-go-round designed to replace hand pumps with water pumps powered by children at play.
PlayPumps were praised by prominent figures such as Bill Clinton, Jay-Z, and First Lady Laura Bush. By 2009, 1,800 water pumps had been installed in South Africa, Mozambique, Swaziland, and Zambia.
PlayPumps raised a significant amount of money and were hailed as a success by the media. There was just one problem: the PlayPumps didn’t really work. In fact, they caused more harm than good.
Most merry-go-rounds build momentum and then spin freely, which is why they are fun for children. However, when used to pump water, they require constant force. Exerting such force would be exhausting for an adult, let alone a child.
PlayPumps turned out to be a dangerous, ineffective, and costly alternative to traditional hand pumps, falling short in almost every respect. They became a chore rather than a source of enjoyment for the children. The children didn’t want to play on them, and local women ended up having to push the merry-go-round themselves, which was tiring and not a task they had agreed to undertake.
This instructive tale of charitable inefficiency highlights why it’s crucial to assess the effectiveness of any charitable initiative, if only to ensure that we are not causing harm to those we intend to help.
2. We have limited resources
Each of us has only a limited amount of time, money, and energy. Even the wealthiest individuals have finite resources to allocate; we are all constrained by the number of hours in a day and the days in a human lifetime, and there are only so many things we can focus on.
Choosing to spend resources on one thing implicitly means not spending them on other things. In economics, this is known as the opportunity cost: the loss of the benefit that could have been gained by choosing the next best alternative.
Just as we can’t go back to relive our day, we can’t spend the same euro twice.
This is important because the scale of the issues we care about—the things we want to change—will typically be much larger than what we can realistically impact with our limited resources. By using our resources effectively, we can make a much greater difference in the areas that matter most to us.
3. The effectiveness of charitable organizations varies widely
While most people assume that the best charitable organizations are only slightly more effective than average, experts estimate that the top charities are often 100 times more effective.
The difference in effectiveness can be even more pronounced when comparing charities working across a wide range of causes.
These vast differences in effectiveness give us the opportunity to have a much greater impact with the money we allocate to charity if we choose organizations strategically, rather than simply opting for those that are familiar or appear the most appealing.
4. Charity is about helping others
By definition, charity is about helping others. Its ultimate goal is to alleviate suffering, enhance well-being, and improve the lives of those it serves.
However, many organizations that accept donations are more akin to commercial services than to pure charity. Instead of donating solely to help others, we might be giving to these organizations to pay for services, express our opinions, or invest in our own interests. This could include schools, hospitals, churches, or local art galleries. While it’s reasonable to support activities in which we participate and benefit, it’s important to differentiate these from altruistic charity.
Donating to a charity to help others is a moral activity where the focus is on the beneficiaries, not on the donors. A thought experiment proposed by philosopher William MacAskill illustrates this well:
“Imagine you come across a building on fire with no one around. Through the windows, you see that a family of five is trapped in one of the rooms. Next to it, a small garage belonging to an art museum is also burning. The garage has recently been cleared out, but you can see that there is still a painting worth 20,000 euros inside. You know you have time to save either the family or the painting, but it’s unlikely you can save both. What do you do?”
For MacAskill, it is clear that choosing to save the painting instead of the lives of five people would be morally reprehensible. “It is not controversial,” he writes, “to believe that someone who chooses a painting over the lives of five human beings has made a mistake in assessing what truly matters.”
Yet, MacAskill points out, anyone who donates to an organization like an art gallery instead of a life-saving organization is making the same error as someone who saves the painting rather than the family. If it is possible to choose between saving lives and funding a material or cultural asset, it is preferable to save lives.
It’s natural to care about many things. You might be concerned about your children’s education, enjoy watching musicals, and be passionate about nature walks. All of these can contribute to a fulfilling life. Having multiple goals is perfectly fine.
However, if one of your goals is to help others, you need to consider the best way to achieve it. Allocating a portion of your resources to support the most effective charitable organizations can help you maximize your impact while still allowing you to pursue other values.
5. Helping more is better than helping less
It goes without saying, but while having a positive impact is good, having an even greater impact is better. All else being equal, we should aim to save more lives rather than fewer, help people live longer rather than shorter, and make more people happier rather than less happy.
Imagine you’re a doctor with 20 sick patients in front of you and enough medication for each of them. I’m sure you would choose to save all of them rather than only a portion.
While saving one patient is commendable, saving all 20 is even better.
In his 2013 essay, philosopher Toby Ord goes beyond merely stating that it is better to have a greater positive impact than a lesser one. He argues that it is a moral imperative to maximize our positive impact. According to him, by doing so, we could “save many more lives and prevent or treat more debilitating diseases.”
6. Our decisions carry implicit moral judgments
When we decide how to spend our money, we are implicitly deciding what we value.
If we’re willing to spend 400 euros on a new television instead of using the same amount for a new mattress, we’re showing that we value the television more than the mattress.
Similarly, if we’re willing to spend 400 euros to save one cat from a shelter rather than using the same amount to free over 200 farm animals from one of the worst forms of suffering, such as battery farming, we are indicating that we place 200 times more value on rescuing the cat than on alleviating the suffering of the chickens.
If a wealthy donor could either double the income of a single average French household with around 60,000 euros or double the income of 100 households in Kenya, would you say it is morally better to choose one option over the other?
Of course, the numbers are not always crystal clear, and there may be disagreements on how to evaluate different moral outcomes. Nevertheless, it is crucial to make these decisions intentionally if we want our actions to reflect our values.
7. We care about effectiveness elsewhere
Earlier, when discussing shopping, we provided an example of how we regularly consider cost-effectiveness in our daily decisions.
Many of us even spend hours researching relatively modest purchases, like headphones, to get the best value for our money.
Spending money on a charity is similar to any other purchase in that:
Money is fungible (meaning we could spend the same funds on something entirely different).
Some donation options, like some purchase options, offer better value than others.
8. We rely on the effectiveness of others
If you pay attention while watching the news or talking with those around you, you’ll quickly notice that we constantly rely on the effectiveness of others.
If a company’s products are ineffective, we’ll choose those of its competitors. If we believe our government is not using our tax money effectively, we’ll vote against it.
Imagine your (legitimate) outrage if your government only protected 1% of its citizens from a deadly virus while it could have protected everyone simultaneously and at the same cost.
If we expect others to be effective in actions that impact us, it seems only fair that we should strive to be effective in our actions that impact others.
9. Supporting high-impact organizations creates a virtuous cycle
The way we choose charities can have long-term effects on what they are incentivized to do. Much like with other purchases, we are essentially voting with our euros.
If we reward costly marketing campaigns or flashy but ultimately ineffective ideas, we will see more charities of this type and fewer actual benefits.
Conversely, if more people donate to charities based on their effectiveness, the demand for more effective charities and better information about their effectiveness will increase. It is hoped that this cycle will lead to a greater positive impact in the world.
10. Effective giving is a matter of common sense
When we asked people who committed to giving 10% of their income to high-impact charities why they made this decision, many responded that it simply made sense to give as effectively as possible. They are not alone: studies show that a significant portion of donors view impact as one of their primary motivations for giving.
That’s great news! It means that most people do not need to be convinced of the importance of giving effectively.
So why do the data suggest that few people donate in the most effective way possible?
This could be explained by the following reasons:
The public’s understanding of effectiveness may be limited. It often focuses on avoiding perceived waste (such as administrative costs) rather than maximizing benefits for beneficiaries.
Donors often lack the information needed to make informed decisions. Only a third of them conduct research, and just 3% base their giving on relative performance. [2]
Therefore, if you value the effectiveness of charities, it is essential to research and actively seek out the most effective charities based on solid evidence.
Evaluating charities can be a challenging task. We have done the hard work for you and collated thousands of hours of research to highlight the most effective charities working on global health, animal welfare and climate change. Check out our list of high impact charities to maximise your impact.
We can also assist you in discussing the impact of your donations.
This article was inspired by the article “Why should we donate to the most effective charities?” by our partner Giving What We Can.
Jennifer Stretton
[1] Camber Collective (2015). « Money for Good 2015: Revealing the Voice of the Donor in Philanthropic Giving, » Camber Collective.
Caviola, L., S. Schubert, and J. Nemirow (2020). « The many obstacles to effective giving. » Judgment and Decision Making, 15:2, 159–172.
Cunningham, H., S. Knowles and P. Hanson (2017). « Bilateral foreign aid: how important is aid effectiveness to people for choosing countries to support? » Applied Economics Letters, 24:5, 306–310.
[2] Money for good Report p47