Immediately after a vivid disaster strikes, the donations appear. When Hurricane Mitch hit Honduras, a plane full of needed supplies couldn’t land because of the piles of clothing clogging the runway. The clothing, which included many winter coats, had arrived in a planeload of previous donations. Winter coats in Honduras!
After hearing reports in the news of the latest disaster—whether a hurricane, flood, mass murder, or earthquake—many people are eager to do something to help. Donating clothing or other goods, such as cans of food or diapers, tends to strike us as more personal than simply sending cash. We have an urge to send goods that show those who are suffering that we care about them. But humanitarian workers refer to the crush of useless, often incomprehensible contributions as “the second disaster.”1
In December 2012, after a gunman killed twenty children and six adults at the Sandy Hook Elementary School in Newtown, Connecticut, stuff started arriving almost immediately. Newtown employee Chris Kelsey estimated the number of donated teddy bears at 67,000, in addition to thousands of boxes of toys and clothing.2 “I think a lot of the stuff that came into the warehouse was more for the people that sent it than it was for the people in Newtown,” Kelsey remarked. “At least, that’s the way it felt at the end.”3 Every child in Newtown got a few teddy bears; the rest had to be sent away, along with most of the other goods sent.
This anecdotal data is consistent with the general argument that cash donations often make more sense—and are much more needed—than teddy bears or winter coats in the aftermath of a disaster. Cash is fungible; it can be spent on whatever’s needed and used to relieve suffering virtually anywhere.
But sometimes there’s even an abundance of well-meaning cash. In the six and a half years after the Sandy Hook shootings, more than $100 million flowed into the small town of 28,000 people in southern Connecticut, according to the New York Times.4 General Electric, which employed the father of the gunman, paid for a $15 million community center. But to survivors, it was an unpleasant reminder that felt like more of a wound.5 The money caused conflict in Newtown, did little to address the societal problems that contributed to the shootings, and certainly did not undo the deaths. “The town became a case study of how American material expressions of grief can become more an obstacle than an aid to recovery,” the Times story concludes.
Large nonprofit organizations often use the vividness of disasters, natural and man-made, to create the emotional tug needed to generate charitable contributions. Such pleas often work, and the donations flood in. We intuitively want to respond in a way that might offer healing, while also creating an emotional connection between us and the victims. But reacting emotionally to the most immediate disaster may not be the best way to spend our charitable dollars. Upon greater reflection, using our System 2 thinking, regardless of whether we donate a little or a great amount, we can recognize more effective ways to help others.
TOWARD MORE EFFECTIVE ALTRUISM
Let’s imagine what would happen if you sat down at the end of the year and thought hard about who should receive your charitable dollars in the coming year. (If you already do this, I applaud you.) You might start with some goals or principles that you endorse, based on your personal values. One principle might be to contribute in a way that creates the most good in the world. To do so, you decide your dollars should go to organizations that spend money efficiently and effectively. Your egalitarian instincts also motivate you to want to give your money in a manner that doesn’t discriminate against specific groups of people. You may also care about reducing animal and human suffering, consistent with the utilitarian notion of valuing the pain of all sentient beings.
The good news is that there are many organizations that share these goals. In fact, you can find them listed at https://www.give well.org/charities/top-charities. These goals lie at the core of effective altruism, a rapidly growing social movement that seeks to apply evidence and reason to determine the most effective ways to improve the world. Popular books in the effective altruism movement include Peter Singer’s The Most Good You Can Do and William MacAskill’s Doing Good Better. Effective altruism pushes us to consider all the consequences of our actions and then make our charitable contributions in the way that is expected to make the greatest positive impact on the world. The movement is rooted in utilitarianism but isn’t rigid in its attachment to any specific philosophical perspective; it’s simply rooted in the goal of making better, more effective philanthropic decisions. It would be impossible for most of us to assess whether we are effective altruists, since the answer isn’t a simple yes or no. But the world would be better off if we tried to be more effectively altruistic when making our charitable decisions.
In contrast to pure utilitarianism, which specifies what you would optimally do to make the world a better place, effective altruism instead focuses on being better. Effective altruism guides people in a utilitarian direction without expecting pure utilitarian behavior. This includes encouraging people to donate more than they do currently, to make commitments while they’re young to give away more of their income as they become wealthier, and to donate in a way that will have the greatest positive impact on the world. While Peter Singer is clearly the hero of the movement, philosophy is not at its forefront. Effective altruism conferences, which have been held regularly since 2013, attract a very young audience and serve only vegan food. The effective altruism movement is also enthusiastic about harnessing the best scientific evidence available (including the use of randomized control trials) to figure out where contributions can have the greatest impact. Controversially, effective altruists often conclude that donations create much more benefit in poor countries far from the United States and other Western nations. Their priorities also include reducing the suffering of animals in factory farms and leaving the world in good condition for future generations—who, they argue, have equal moral value to currently existing people.
Based on rigorous analyses, effective altruists assert that some charities are far more effective than others, and they seek to identify those that achieve the most good for a given amount of money. Effective altruism assesses impact based on geeky measures such as “quality-adjusted life years” (QALY) saved per dollar. So, imagine that multiple charities seek to save lives, and you want to know which saves the most lives per dollar contributed. But, of course, some people have more expected years left in their lives, and we also care about the quality of those years. Assessing the QALYs that can be saved by each charity for the same contribution is a logical way to compare their effectiveness—and that is precisely what the effective altruism world pushes us to do.
The effective altruism movement has been led by Oxford philosophers William MacAskill and Toby Ord. They were involved in the creation of the Centre for Effective Altruism at Oxford, which houses 80,000 Hours (discussed in Chapter 8), and Giving What We Can, an organization that encourages people to pledge to donate at least 10 percent of their income for the remainder of their working lives to causes consistent with the effective altruism movement. As of 2019, more than 4,265 individuals have taken the pledge, donating over $125 million. Similarly, the Founders Pledge is a nonprofit that enlists for-profit start-up founders to make a legally binding commitment to donate at least 2 percent of their personal proceeds to charity in the event that they sell their business. By August 2019, 1,205 entrepreneurs had made such a pledge and donated $365 million. Other important organizations in the effective altruism movement include GiveWell and The Life You Can Save, both of which provide scientific guidance on where our money can do the most good. For those focused on reducing animal suffering, Animal Charity Evaluators provides similar analyses.
You don’t need to adopt utilitarian philosophy to join the effective altruism movement; nor are you expected to become a perfect utilitarian, as none of us can be. You can simply focus on doing better with your donations.
Despite being a bold new movement, effective altruism remains a small part of the philanthropy world. It is dominated by very young people. Consider one of the heroes of the effective altruism movement, Ian Ross, whom Singer has described as leading “the most remarkable example of a life committed to maximizing giving.” Ross earned a Ph.D. in linguistics from the University of Pennsylvania, following undergraduate work at MIT, and currently works for Facebook’s product analytics team. Following a strategy that he describes as “earning to give,” he has committed his life to reducing extreme animal suffering. Going well beyond the basic tenets of veganism, Ross believes each of us is responsible for what we do and what we do not do, and he applies that logic to how he lives. While working for large corporations, he was a founding advisor to Hampton Creek Foods (rebranded as Just Foods), which produces plant-based egg substitutes that are already reducing the demand for eggs. In 2014, Ross donated more than 95 percent of his $400,000 income after taxes to charities. Living alone in San Francisco, he claimed to have a comfortable lifestyle within an annual budget of $9,000. By 2016, at an effective altruism conference at MIT, he said he was making a bit under $500,000 and living on $10,000, including his monthly rent of $400 per month (yes, in San Francisco!). He may be the most extreme practitioner of the “earning to give” idea discussed in Chapter 8. Sure, he gets mugged occasionally in his low-rent neighborhood, but he views this as a small price to pay on the path to living an effectively altruistic life. Ross does not view his lifestyle as a sacrifice; he believes himself to be simply a vessel for reducing as much animal suffering as possible.
I admire Ian Ross, but I don’t aspire to his lifestyle, and I question whether he is an ideal exemplar of effective altruism. Ample evidence from the goal-setting literature suggests that the most effective goals are those that are perceived as challenging, but not impossible or unreasonable. Ian Ross may view his lifestyle as quite pleasant, but others are unlikely to perceive it as possible or reasonable for themselves. Consequently, too many people may reject pure utilitarianism as a guide for their behavior, as it appears to require far too much sacrifice. As an alternative, it would be useful to convince people to broadly buy into the principles underlying utilitarianism, identify the very normal barriers to their willingness to act in a purely utilitarian manner, and then explore which of these barriers they might eliminate to be better.
A SHORTSIGHTED CRITIQUE
A number of watchdog organizations have tasked themselves with evaluating charities’ efficiency to help people maximize the impact of their donations. Charity Navigator, for example, shows particular disdain for high overhead. It aims “to advance a more efficient and responsive philanthropic marketplace in which givers and the charities they support work in tandem to overcome our nation’s and the world’s most persistent challenges.”6
Many people consider donating to charities to be a very personal task. Some critics have accused the effective altruism movement and watchdog groups like Charity Navigator of being paternalistic—of ignoring the heart and deep emotions that often surround giving while arrogantly claiming to know the “right” way to give. Not surprisingly, these organizations’ use of terms like “intelligent giving” can offend people. And, of course, many nonprofit organizations that do not perform well in the eyes of these watchdogs certainly do not appreciate their insights. Effective altruists would counter that while emotions may create the reason to give, they can limit the effectiveness of how we give.
Because effective altruists and charity watchdog groups seem to share the goal of maximizing efficiency in the realm of charitable giving, I was surprised to read an article in the 2013 Stanford Social Innovation Review in which Ken Berger, then the president of Charity Navigator, and Robert M. Penna, a consultant to the organization, viciously attacked effective altruism as “defective altruism.” Berger and Penna were offended by effective altruism’s goal of assessing what does the most good across charitable domains (for example, education versus hunger), which leads to the assumption that all suffering and pleasure can be compared and measured. Berger and Penna accuse effective altruism of being “a moralistic, hyper-rational, top-down approach to philanthropy” (not much different from criticisms I’d read of Charity Navigator). They also attacked Peter Singer’s famous query concerning whether it is better to provide one guide dog to one blind American or to cure two thousand people of blindness in a developing region, if either could be done for the same price. Singer and the effective altruism community clearly believe that the more moral choice is to prevent the two thousand cases of blindness, even if the recipients live far away from donors. By contrast, Berger and Penna believe it’s up to donors to decide which societal problems they want to help ameliorate, as long as they choose charities with low overhead. Essentially, Berger and Penna endorse metrics that encourage organizations to spend the vast proportion of their funds on directly providing services or goods, but have no problem with donors picking and choosing among causes and tribes. In accusing effective altruists of rating causes they like over causes they don’t like, Berger and Penna convey that either they don’t understand or choose to give no credence to the underlying logic of utilitarianism of maximizing the value created by one’s philanthropy.
By being the first mover on quantifying charitable organizations, Charity Navigator may have captured the imagination of those who value efficiency in efforts to make the world better. It did so, however, with an overly narrow objective. Research clearly shows that goals, such as identifying charities with low overhead, will motivate people’s behavior—in this case, their donation decisions. But it’s also true that goals that focus on one set of desired behavior lead people to ignore other desirable behaviors.7 Thus, Charity Navigator’s metrics are likely to lead philanthropists to focus on low-overhead organizations while ignoring more important information: the amount of good their charitable dollars will achieve. Ignoring this other information will keep donors from making even better decisions. By the way, few financial executives would recommend Charity Navigator’s low-overhead metric as the sole basis for evaluating business investments. Some of the most profitable corporations in the world invest a lot in R&D and in competitive salaries, and have high overhead rates as a result.
Effective altruism, Charity Navigator, and other movements and organizations that seek to guide charitable donations generally do far more good than bad. Moreover, these organizations can harvest the best of what we have learned in psychology and behavioral economics to nudge people to maximize pleasure and minimize pain. They can help us trade up by making wise trade-offs on the impact that we can have through different paths to charitable giving. But when organizations in the philanthropy community denigrate other positive movements or generous donors, they make philanthropy less attractive as a whole. In attacking the good being done by the effective altruism movement, Charity Navigator destroys value for the world. Its website still provides useful advice, but its leaders’ criticism of effective altruism is costly. They could do better.
MY VIEWS ON PHILANTHROPY
Just to be clear, I’m a fan of the efficiency and low overhead promoted by Charity Navigator, as well as effectiveness and the other goals espoused by effective altruists. Here are a few more guidelines I support when it comes to charitable giving:
EFFECTIVE CHARITIES
Different people reach very different conclusions about which charities are the most appropriate to fund with their philanthropic dollars. Based on their values (outlined earlier in the chapter), effective altruists reach some clear conclusions.8 They focus on problems that are large in scale (problems that significantly affect many people’s lives) and are solvable—that is, where contributions can make a substantial difference. Effective altruists also favor charities that have proved to be effective at saving lives and alleviating suffering (both human and animal). Effective altruists also believe they can have a greater impact on problems that have been neglected. For example, many organizations and philanthropists are paying attention to the important problem of finding a cure for cancer, while malaria is comparatively ignored. Effective altruists thus conclude that our contributions can save more lives when applied to reducing malaria rather than cancer.
In total, these values lead effective altruists to identify three categories of charities where our contributions can alleviate the greatest amount of suffering.
First, charities that focus on fighting extreme poverty in low-income countries have enormous potential to reduce suffering, and there is excellent evidence from the field of developmental economics of the effectiveness of different interventions. There are easily preventable diseases, such as malaria and parasitic worms, that kill millions of people every year. Similarly, poor nutrition in low-income countries leads to a large number of preventable maladies. All of this suffering is relatively easy to prevent. Even simply transferring money to people who are very poor is a relatively cost-effective way of helping them. The philanthropy GiveDirectly distributes money straight to those in need, with very little administrative costs in the process. They have already distributed millions of dollars to 20,000 individuals living across 197 villages. Consistent with the values of effective altruism, GiveDirectly actively studies the effectiveness of its aid; over time, this allows them to be more effective.
GiveWell—which, as I mentioned earlier, offers hard data on how to make sure our money does the most good—estimates the cost of saving an expected life for many of the charities that they view as most effective. This is the kind of comparative reasoning that pervades the effective altruism community. It leads effective altruists to focus on bed nets over antimalarial drugs, even though antimalarial drugs are more cost-effective than the efforts of virtually all other philanthropic efforts that focus on developing economies.9
Second, addressing the type of tribalism we discussed in Chapter 6, many people who identify with the effective altruism community focus on animal welfare, arguing that if we value a unit of animal suffering like we value a unit of human suffering, then we can reduce the greatest amount of suffering by focusing on animal welfare. (This is not the same as arguing that an insect is as important as a human, since humans have more capacity for pain and pleasure than an insect.) Like Givewell, Animal Charity Evaluators (https://animalcharityevaluators.org/) is an online platform that sorts out where your charitable dollars will do the most good, but with a specific focus on animal welfare. As Animal Charity Evaluators notes, billions of animals each year are kept in inhumane conditions on factory farms, and their lives end prematurely when they are slaughtered for food. Animal welfare advocates argue that much of this suffering can be eliminated by reducing demand for factory-farmed meat and by enacting legislative changes that improve the welfare of farmed animals.
At the beginning of this book, I described a lecture by Bruce Friedrich that changed my philanthropy, investments, and consumption substantially. To review, his organization, the Good Food Institute, focuses on encouraging the creation of the next generation of foods that will reduce demand for products that come from abusing and killing animals. While the Good Food Institute is a charity, it is connected to investment groups that fund meat alternatives. Beyond donating to reduce animal suffering, investing in meat alternatives and consuming the products of these efforts are additional or alternative strategies toward creating value.
A final argument for a focus on animals is that they are underserved in the philanthropic community: only 2.8 percent of philanthropic funding in the United States goes toward improving the environment and animal welfare (the other 97 percent is aimed at helping humans). And of that 2.8 percent, the majority is spent to help domesticated and wild animals, despite the greater opportunity to reduce the suffering of animals in factory farms.
Third, effective altruists care not just about current generations, but also about future generations. The number of people who will exist in the future is likely many times greater than the number of people alive today. Effective altruists believe that these people matter and that we should value their future pain and pleasure similarly to our own. Yet we often fail to think about our great-grandchildren, let alone their great-grandchildren. They are too emotionally distant from us to create an emotional tug.
What can we do to cost-effectively improve the welfare of future generations? There are many speculative answers to this question, and given the different scientific interests and expertise of members of the effective altruism movement, people reach different conclusions. But within the scientific community, most scientists would agree that an effective way to improve the welfare of future generations is to pay far more attention to the climate change crisis than we currently do. While this tends to be more a matter of political decision making than charity, there are many charities focused on slowing climate change. The website https://founderspledge.com/ offers a good starting point for thinking about how your dollars can best address climate change. Founders Pledge cites the Coalition for Rainforest Nations and Clean Air Task Force as two charities that are making headway in the fight against climate change.
MOVING BEYOND OUR BARRIERS TO WISE PHILANTHROPY
Our emotions play a critical role in motivating us to help others, as you doubtless know if you’ve ever considered donating to a heartfelt GoFundMe plea on Facebook or picking up the phone to give money after seeing photos of suffering dogs and cats in a TV ad. Even if you’re convinced by the effective altruism perspective, for the sake of social connectivity, you may be happy to fund your friend’s participation in a charity race, though it isn’t the most effective form of philanthropy. But it’s still important to be aware that our emotions can lead us to get less bang from our philanthropic bucks.
Imagine that you are trying to fundraise for two different charities. The first serves a needed population but does so very ineffectively, spending a great deal on overhead and passing on little to the intended beneficiaries. However, this charity has amazing success stories to share in its promotional materials, and its recipients are identifiable and live near likely donors. The second charity is just the opposite: it scores well in the effective altruism community, creates great value per donated dollar and is highly effective, and focuses on people across a big ocean, and its recipients are not visible to those making donations.
Now imagine that you can send an emotional message (such as a video that highlights the suffering of a specific person) or a rational message (such as data describing the magnitude of good that donated dollars can do) to potential donors on behalf of each charity. Which type of message do you send? If your goal is to raise funds for your organization, research supports focusing on the emotional message if you are the first charity. Lots of philanthropies rely on the strategy of tugging on people’s emotions to make up for a less-than-compelling value proposition. In fact, many consultants are thriving thanks to their recognition that people often make charitable decisions based on their emotions.10 They draw on the same barriers to active intelligence we explored in Chapter 2, including creating a warm glow for the donor, providing them with recognition, and creating connections between donor and recipient. In contrast, if your services are remarkably cost-effective, you’ll want people to engage their active intelligence by conveying a cognitive message as well. Basically, if you have great stories but a less compelling value proposition, you want people to act on their emotional response. But the better your value proposition, the more you also want people to be cognitively engaged.
That’s the charities’ perspective. Now let’s return you to the role of a prospective donor who wants to be as impactful as possible with your charitable dollars. You should try to engage your active intelligence by identifying organizations that have made wise trade-offs in what they seek to do with their limited funds and that are honest and transparent.
Here are some specific process recommendations. First, think through your overall goals: What do you want to achieve with your contributions? This step may sound obvious, but many smart people skip it. I’ve noted that effective altruists lean toward creating as much value as possible by being efficient and effective, and valuing the interests of all equally. But perhaps you want to make some adjustments, based on your rejection of some aspect of utilitarian logic. For example, you might not care about animal suffering as much as human suffering, or you may feel a particular obligation to a tribe to which you belong (such as your religious institution or your alma mater). The remaining utilitarian logic still holds and can be adjusted according to your specific values. I personally make philanthropic decisions with my spouse, and her preferences often depart from the charities most preferred by effective altruists (more on this in Chapter 10). But we do think about the effectiveness of the organizations we consider, have shifted toward more effective charities, and have been on a path of donating a greater percentage of our income over time.
It is also useful to see where your intuition contradicts advice from effective altruism or your own more deliberative analysis. This might mean taking a look at the organizations that have received your donations over the last year and considering why you gave the funds. In retrospect, is this where you would want your donations to go? This gives you a chance to pit your intuitive System 1 preferences against your deliberative System 2 preferences, and update what you truly believe to be a wise philanthropic strategy. After all, your emotive self could have an important message that you feel you need to hear. How should you resolve any discrepancy that emerges? Effective altruism certainly argues for preferencing cognitive over emotional analyses. Not ready to accept this? Perhaps you might benefit from a parallel analysis from one of the greatest decision scientists who ever lived, Howard Raiffa.11
According to an often-told story, Raiffa was on the faculty at Columbia when he received an offer from Harvard. So Raiffa met with his dean at Columbia, who was also his friend, and asked for input on what he should do. In an attempt at humor, the dean, borrowing from Raiffa’s writings on decision analysis, suggested that Raiffa identify the relevant criteria, weight each criterion, rate each school on each criterion, do the arithmetic, see which school had the best overall score, and go there (a great deal like how effective altruists assess charities). Raiffa purportedly responded, “No, this is a serious decision!” Raiffa, my friend and informal mentor until his passing, clarified to me many times that while he enjoyed the story, it simply isn’t true. But Raiffa also argued that when intuition and deliberation clash, it is wise to consider whether your emotions provide insights that should be part of your more deliberative decision-making process and to use that deliberation to help you see how your emotions might steer you away from your long-term goals. In terms of philanthropy, this contrast can also allow you to audit your decisions for bias that might result from valuing a warm glow, a desire to be recognized, and allegiance to your tribe. I think that this is great advice for those who aren’t ready to fully endorse the goals of effective altruism.
To achieve even greater clarity, you could try to think through what choices you would make under a so-called veil of ignorance—that is, as if you didn’t know your own tribe, wealth, or nationality.12 Doing so can help reveal how your identity might be biasing your philanthropic plan.
Finally, you can organize your donations in a manner that increases their effectiveness. Let’s look at two common ways of timing donations. First, many of us receive and consider donation requests as they appear throughout the year—in the mail, on social media, at church on Sunday, in your child’s backpack, and so on. Second, many of us sit down periodically to think through our donation patterns across many philanthropies. I admit I use both of these processes. Yet the evidence is clear and consistent: thinking through our donations across organizations—the type of joint decision-making process we explored in Chapter 2—better engages our active intelligence, prompts more rational decisions, and helps us create more value. Sequentially considering charities as they appear to us throughout the year directs our attention to the emotional tug of philanthropic appeals, whereas comparing different charities leads to logical deliberation across options. So, let’s all strive to slow down and deliberate when one-off requests show up in our inbox or mailbox, and also to sit down more regularly to consider our philanthropic goals and decisions thoughtfully.
This chapter completes our exploration of four domains (equality, waste, time, and philanthropy) where you can consider strategies for creating more value. The final two chapters will focus on developing an action plan for increasing your ability to create value by influencing the decisions of others for good.